As improbable as it sounds, it’s possible to misplace a million bucks.
Companies, such as the 480,000 currently registered in the Virgin Islands, sometimes get dissolved and struck from the corporate registry before assets are transferred to new owners.
Individuals, too, can forget they have a remaining $2.99 balance on a $20 gift card or that an insurance company owes them a $450 refund cheque that didn’t arrive because an address was incorrectly entered.
These assets eventually become unclaimed property, and after a few years of inactivity they typically are transferred to foreign governments, a legal process known as escheatment.
It’s possible to recover the money even after it’s been escheated. But due to a lack of awareness and outdated laws, VI government agencies, companies and residents could be missing out on as much as $10 to $15 million in total, according to Darren Jack, a director of the Cayman Islands-based company AssetMine Global.
His company, which has partnered with the VI office of the firm KRyS Global to help VI residents and companies recover unclaimed property, has worked to create a large searchable database from foreign countries’ unclaimed property listings.
Unclaimed property
AssetMine has contacted nearly 10,000 people across the Caribbean believed to have unclaimed property. Another 10,000 to 20,000 will be contacted soon, Mr. Jack said.
Sometimes, property owners end up in the database because of typing mistakes or postal errors: The Cayman Islands’ postal abbreviation KY, for example, is sometimes confused with the American state of Kentucky, and letters with VI postal codes can go astray as well.
“Even though VG is not Virginia, we’re seeing stuff sent to Virginia,” he said.
If a legally specified number of years pass and a company’s attempts to locate property owners prove unsuccessful, assets can be escheated to the state but are listed on public databases.
But around the world, countries differ in how the process works and what they require to be listed, Mr. Jack said.
“Some jurisdictions are very transparent and they’ll say here’s the name of the owner, the last known address, the value, the type of asset, who was holding it, how long they held it for, the date it was escheated,” he said. “You get all kinds of information.”
Not all countries are so forthcoming.
“Other jurisdictions give you the minimum,” he said. “Name, no value and sometimes that’s it.”
AssetMine became interested in unclaimed property in this territory after it noticed that VI-registered companies are often featured in the database, Mr. Jack said.
Last year, the firm began talking to financial services practitioners about recovering property for VI companies, whose main places of business and assets are frequently found overseas, he explained.
Now the company hopes to begin reaching out to VI residents who it finds in the database.
AssetMine and KRyS can help those people reclaim their assets in exchange for a small portion of the proceeds, paid only on a successful recovery, Mr. Jack said.
The company joined forces with KRyS mostly because this type of asset recovery works best with a firm that prospective clients have heard of and can trust, he said.
Charlotte Caulfield, a director with KRyS, said that she understands why some people are sceptical to hear they have free money waiting to be claimed.
“The issue with this is it seems like those e-mails you get: ‘My father was a Nigerian prince and I have $5 million in a bank account. Can I have your bank account details?’ It just seems a bit too good to be true,” she said.
But the recovery process is common to most large economies, and millions are reclaimed each year, Mr. Jack said.
The escheatment process is currently used in the VI through the Dormant Accounts Act, 2010, a law that came into force in 2012. That law requires banks to identify accounts that have been inactive for at least seven years and turn over to government funds that aren’t reclaimed.
Financial Secretary Neil Smith said in an October interview that he believes the law has been successful to date, though government hasn’t yet received any of the dormant funds, a figure he believes could total several million dollars.
“If we get ourselves in a jam we could use them, but we’ve not done that. We try to avoid that as much as possible,” he said, adding the resource can be tapped in the future.
Several residents with inactive accounts have contacted government, which has returned their monies with interest, he added.
Mr. Smith said that he hadn’t heard of AssetMine’s plans to identify other classes of assets for escheatment. But he said he would be interested in all efforts to bring in more revenue from non-tax sources.
Other asset classes
It would take a general update of VI laws to include other classes, Mr. Jack said, but other jurisdictions have applied the principles of the Dormant Accounts Act to 60 asset types.
“Everything from insurance policies and pension funds and brokerage accounts to vendor cheques, gift cards — you name it,” he said. “In other jurisdictions, all those assets are covered by similar legislation.”
His company is working with one Caribbean jurisdiction, which he declined to name, that has identified $3 to $6 million that its government could receive by tapping the unclaimed property of companies that have been struck from its company registry.
“We would expect this to be a fairly healthy opportunity for the BVI government simply because of the large volume of companies there,” he said. “The law of big numbers would indicate that there should be a large volume of assets there, but we haven’t done research on it yet.”
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