Avoiding government "abandoned property" seizures
By bnitz on Jul 09, 2007
Those who live abroad should be aware of abandoned property laws in their home country. A recent article in the San Fransisco Chronicle (found by The Consumerist) explains a California law allowing the government to seize property in safe deposit boxes which haven't been checked in three years. While on a recent visit to to my homeland, I found that dividends in a long-term pension fund had been seized by the state. As with most pension funds, this one shouldn't be accessed until retirement (which if I were to rely on Social (In)Security, would probably be sometime after the year 2075.) A paperwork or database error within this mutual fund company resulted in the dividends being listed as abandoned. I was able to recover the funds, but the fact that a company specializing in long-term pension products could do this left me uneasy and gave me a new respect for grandparent's post-depression habit of hiding cash under mattresses and behind loose bricks.
A related "errorism" problem can impact homeowners whose mortgage requires their lending agency to withhold a portion of their monthly payment for property taxes. Occasionally the lending agency is bought out, becomes insolvent or has other structural problems. If your escrowed tax payment slips through the cracks of the lending agency, responsibility for paying the tax reverts to you, even if you've already paid it! Fortunately this problem is rare today but as the international housing bubble unravels and leaves some sub-prime lending agencies insolvent, lost escrow payments will become more common. In some locales, missed tax payments can cause you to lose your house or subject you to fines associated with late tax payments.
Twenty-first century consumers must look out for themselves and wage a personal war on errorism. The level of quality personal service we expected before this age of outsourcing and short-term employment is long gone. When there are no strict laws requiring the protection or accuracy of consumer data, only informed consumers can pressure companies into doing the right thing.