ANNAPOLIS — It was Joyce Vann’s lucky day.
The Dundalk resident had been walking by a booth that advertised it was “giving away millions” when she thought she’d try her chances — and after her name popped up in the online database listing Marylanders’ lost or forgotten funds, she got $400 in the mail.
“I used it for necessities,” said Vann, who explained she’d been struggling financially when she received it, several years ago. “They were looking for me, and I was happy to be found.”
Vann’s story is just one of many under recently re-elected state Comptroller Peter Franchot’s increased push to “reunite” Marylanders with their lost funds, turned over to the state from forgotten financial accounts.
But while the state is “giving away millions,” it’s raking in even more — through what some see as an increasingly significant revenue source to help pay for state’s everyday bills.
About 60 percent of Maryland’s unclaimed property funds — about $90 million in fiscal year 2014 — goes straight to the state’s general fund, Capital News Service found through a Public Information Act request to the state comptroller’s office.
Marylanders are missing money from abandoned insurance funds, stocks, uncashed checks, bank accounts and more, the state says. This can happen when someone accidentally pays the same bill twice, for instance, or when companies mail refunds to old addresses after the owner moves away.
Under state law, financial institutions must turn over to the state comptroller’s office any of this money after three years of no contact with the owner and unsuccessful attempts to contact them. Though companies can be headquartered anywhere, the property holder’s last address must be in Maryland.
The state holds the money in trust, indefinitely, while searching for its owners through booths at fairs, newspaper and TV ads, video campaigns and an online, searchable database.
Since 2000, the amount of money the state has accrued from so-called “unclaimed property” has soared almost 400 percent: from about $38.4 million in fiscal year 2000 to $150.4 million in fiscal year 2014, according to numbers compiled by the Maryland comptroller’s office.
Under Franchot, who took office in 2007, the proportion of that pot the state has successfully returned to Marylanders has also jumped. Between 1999 and 2007, only about 20 to 30 percent of money remitted to the state made it back to its owners; now, about 40 percent is returned, according to the comptroller’s office.
It’s good news for both Marylanders, who get back some lost dollars, and for the state, which generally keeps whatever the original owners don’t come to collect, one unclaimed property expert said.
States generally hold no more than a fourth of the unclaimed funds to pay back potential owners coming to reclaim their money, said expert John Coalson, a partner at national law firm Alston & Bird, LLP.
Maryland retains about 40 percent to cover claims, based on calculations over 10 years of the amount of unclaimed property the state received and how much it repaid to Marylanders, state Assistant Comptroller Joseph Shapiro said.
The rest of the money is fed into a state’s general fund and used to pay the state’s bills: often for education, state employees’ salaries, transportation and more, Coalson said.
“Technically, they will repay it if owners come forward to claim it, but they rarely come forward after – and states treat it as theirs,” Coalson said.
It is becoming an increasingly important source of revenue in some states: in Delaware, it is the third-highest source of revenue in the state, Coalson said.
Since Franchot took office, the comptroller has “doubled down” on his unclaimed property efforts, said Andrew Friedson, a comptroller’s office spokesman. Revenue claims examiner Faye Johnson, who also worked under the state’s previous comptroller, said television ads and other media efforts have especially picked up.
Since 2000 and especially throughout the financial crisis and its aftermath, states across the country became increasingly aggressive in using outside companies to rake in funds, the expert Coalson said.
They love money, and it’s becoming an increasingly important revenue source for the state,” Coalson said.