Due Diligence for Companies Holding Abandoned Funds

Companies that hold abandoned funds are required to attempt to contact the rightful owner of the property before transferring, or escheating, the property to New York State. This process, called due diligence, is not only required by the New York State Abandoned Property Law (APL), but is good customer service. 

Requirements in addition to the mailing requirements below apply to Dividend Reinvestment Plans (DRIPs) and business entities in certain industries. See the additional notification requirements section for more information.

How to meet due diligence requirements

90 days before your final report is due

Send a notice by first class mail to every person or business with a valid address that you expect to appear on your abandoned property report.

In the notice, be sure to tell the owner that their property will be reported as abandoned property and transferred to the Office of the New York State Comptroller unless they claim it before the date you submit your report. Include that date in the notice to give the owner a deadline for contacting you.

Exemptions to this requirement
  • You don’t have a valid address for the property owner. For example, you have records showing a prior mailing was returned as undeliverable, or you only have an incomplete address on file.
  • The value of the abandoned property account is $20 or less and you plan to aggregate these properties. To aggregate, group the items into one amount for each property type.

60 days before your final report is due

If the customer doesn’t respond to the first class mailing, send them a notice by certified mail with a return receipt requested. Note that holders must send certified notices to owners of dividend reinvestment plans regardless of the property value, so the account value exemption below does not apply to accounts for those plans. See the additional notification requirements for more information.

Exemptions to this requirement
  • The first class mailing was returned as undeliverable.
  • The last known address you have for the owner is in a foreign country.
  • The value of the abandoned property account is $1,000 or less. (However, in the spirit of the law, we ask you to send a certified mailing if the value of multiple accounts for the same owner exceeds $1,000.)
  • You received a claim for the abandoned property and are in the process of reuniting the owner with their funds.
Rules about deducting mailing costs
  • First class mailing costs can’t be deducted as a service charge.
  • You may deduct the certified mailing cost from each account as a service charge. If multiple items were rolled together for a certified mailing, charge the cost only once.
  • You can’t make a bulk deduction against the final remittance.

Additional notification requirements

Dividend Reinvestment Plans: Refer to the Securities and Exchange Commission Rule Number 17Ad-17 for guidance on searching for lost security holders and sending required notifications to unresponsive owners.

Industry-specific requirements: The industries below are also required to publish notice of outstanding items. See the Handbook for more information about publication requirements and cost deductions by industry.

  • Banking
  • Utilities
  • Courts (county/city)
  • Life insurance
  • Condemnation
  • Insurance other than life

Customer contact

Customer contact during any part of the due diligence process precludes the necessity of further due diligence.

Certain types of electronic contact can be used to satisfy the written communication requirements in the APL to prevent the property from being deemed abandoned. This includes email communication from the entitled owner of the property that matches the registered email address on record with the holder or a verifiable login by the owner using a website or mobile application made available by the holder. See NYCRR Title 2 Part 125 for more details.