In May of this year, New Jersey Assemblymen, Patrick J. Diegnan, Jr., Paul D. Moriarty and Gordon Johnson, sponsored a bill to reverses certain changes to laws governing State treatment of unclaimed property after receiving pressure from businesses and consumers about the 2010 changes to the abandonment periods for State escheatment on travelers checks, money orders, and stored value cards (SVCs).
“Under New Jersey‘s system of escheat, certain types of property which have gone unused for a specific period of time are handed over to the State where the property remains available for the rightful owners to claim†says Edward Palonek, founder of foundmoney.com. Foundmoney was the first company to make unclaimed property records searchable on the Internet in 1995.
“Stored value card activity†means the purchase or issuance of the stored value card, a transaction executed by the owner that increased or decreased the value of the stored value card, or communication by the owner of the stored value card with the issuer of the stored value card concerning the value of the balance remaining on the stored value card as evidenced by a contemporaneous record prepared by or on behalf of the issuer. “Issuer†means an issuer or seller of a stored value card that is a person, retailer, merchant, vendor, provider or business association with the obligations of a holder to accept the stored value card as redeemable for, solely or a combination of, merchandise, services, or cash, and to report and deliver proceeds of the stored value card if abandoned.
The Governor of New Jersey proposed various revisions to rationalize the State‘s statutory treatment of unclaimed property, as an ancillary component to the State fiscal year 2010-2011 budget proposal.
The new Bill aggressively shortened periods of abandonment for money orders and travelers checks thereby shortening the time to report that property to the State. This Bill also authorized the State escheatment of unused stored value cards. These changes caused significant uncertainty for consumers and businesses alike.
This bill, S1962, reverses the 2010 changes as to the State‘s abandonment periods for travelers checks, money orders, and escheatment of SVCs. The short summary of the new 2012 bill is that it restores the 15 year abandonment period for travelers checks issued on or after the date of enactment. The bill restores the seven year abandonment period for money orders issued on or after the date of enactment.
Under the 2010 changes, both travelers checks and money orders were subject to a three year abandonment period. The bill provides that SVCs issued on or after the bill‘s date of enactment are no longer subject to State escheatment. The bill also grants the State Treasurer emergency regulatory authority for implementation.
“The new Bill is great news for businesses and consumer that may have forgotten about or have not had a chance to use their unclaimed travelers checks, money orders or SVC‘s, says Edward Palonek.