E-filing portal helps state give away a treasure trove of unclaimed property

Every year, Arkansas returns millions of dollars in unclaimed property — such as bank accounts, insurance policies, paychecks, stocks or utility deposits — but until recently the process was a laborious, paper-centric practice that took up 90 percent of an auditor’s time.

An e-filing portal and identity verification service launched this year is helping Arkansas’ Auditor of State automate the authentication of applicants filing claims for the property, streamlining operations and freeing up auditors to work on other critical tasks.

The Unclaimed Property (UCP) Division within the Auditor’s Office has a staff of 10 auditors — five of whom are assigned exclusively to work on claims. Until recently auditors had to manually process paperwork for every single claim paid by the department, said Janet Harris, Arkansas’ deputy auditor. The department required claimants to submit various types of proof-of-identity documents, such as driver’s licenses, Social Security cards or, in some cases, utility bills as proof of residence.

Arkansas has collected some 300,000 individual unclaimed properties worth $31 million for fiscal year 2013. “You can imagine the intensive work required if you don’t have some sort of paperless claims process,” Harris said.

“We were consistently behind two months, sometimes three, with a small staff and operating budget that had not been increased in many years,” Harris said.

That has changed with the e-filing application developed by UCP’ s Web developer, Arkansas.gov, a subsidiary of the National Information Consortium, and verification and authentication services from LexisNexis. The online filing system, which went live March 20, has helped UCP achieve a 77 percent improvement over last year in the time it takes to pay applicants. Applicants now receive checks in seven days or fewer, as opposed to the weeks it took with the manual, paper-based process, Harris noted.  

Plus, UCP has seen a vast improvement in staff productivity. Auditors used to spend 90 percent of their time on claims, but now they can work on other areas such as delayed holders’ reports (entities holding unclaimed property) or inventory on safe deposit boxes. Plus, UCP can accomplish a life cycle of claims payment in one fiscal year instead of putting things off.

As of June, 2,414 e-filers had signed up on the system. “That’s almost 2,500 paperless claims we’ve done in a little over two months,” Harris said. The UCP had a “soft” launch of the e-filing portal back in September 2012, a few months after the initiation of the project with Arkansas.gov and LexisNexis, she noted.

Unclaimed property includes savings accounts, checking accounts, unpaid wages or commissions, stocks, dividends proceeds, refunds, money orders, paid-up life insurance policies, utility deposits and contents of safe deposit boxes. Safe deposit box contents often include jewelry, coins, baseball cards, stamps and other personal documents, according to the Auditor’s Office.

Businesses, government agencies and financial institutions are required to turn over property that they have in their inventories that would be deemed by law to be abandoned, Harris said. Depending on the type of property, unclaimed assets will have been abandoned anywhere from one to 15 years prior to being reported to the Auditor’s UCP Division. Since 1980, over $74 million in unclaimed properties have been returned to the rightful owners. But $170 million is still waiting to be claimed. Each year the UCP division publishes lists in Arkansas newspapers of all current year property waiting to be claimed in what the state has billed as the Great Arkansas Treasure Hunt.

UCP has developed a set of eligibility rules for online applicants. For instance, people claiming safe deposit boxes, which contain tangible items such as jewelry, are not eligible for e-filing, nor are heirs to property.  These types of applications require an in-person meeting with a UCP agent and, in some cases, notarized signatures. Applicants claiming property over $2,500 can enter their information online, but it has to be printed, notarized and mailed to UCP.

“As we continue to increase our comfort level with the e-filing system, we will likely choose to increase that threshold,” Harris said. “The majority of claims we pay are under $500.”

After applicants enter information electronically, it is passed through LexisNexis’ databases for the identity verification and authentication process. LexisNexis online identity verification and authentication services can filter through volumes of data and records stored in public and business databases to find identities and historical information associated with individuals, in some cases more than 30 years back.

Arkansas’ UCP is using two LexisNexis services:  Instant Verify, which lets organizations verify personal identity data and professional credentials; and Instant Authenticate, which combines analytics and authentication capabilities to do a deeper dive into an online applicant’s identity by posing a series of quiz questions that only the applicant should be able to answer. The deeper layered authentication is designed to prevent identity theft and fraud.

When a person files electronically, the UCP staff never touches the piece of paper since all the identification is being done through LexisNexis, Harris noted. After the person’s identity is verified, the claim comes back to UCP electronically for second-level approval and payment.

The intricacies behind the move to paperless claims are like “inside baseball” for the UCP staff, Harris said. However, the e-filing and identity verification gives citizens and claimants a way to interact and conduct business with the state at home on their computers in a way they have not been able to do before, Harris said. If eligible, they are not required to make copies of anything or scan drivers’ licenses or Social Security cards and send them off in a bundled package to UCP.  Plus, they are not waiting several weeks for a check or a call from a UCP agent.