Ask Dr. Don By Don Taylor, Ph.D., CFA • Bankrate.com

Lost and found money

Dear Dr. Don,
A tracing company has written me about a liquid asset that they have found for me. They want one-third of its value as a fee. I have no clue what it is.

They have my previous last name, so it has to be from 18-20 years ago. How do I find out about it without paying them? I'd appreciate your suggestions before I pay this bunch anything.
Betty Jo Bounty

Dear Betty Jo,
With a little legwork, or a few clicks of your mouse, you should be able to find your missing asset on your own. Bankrate maintains a listing of the states' unclaimed property offices and Web sites. Go to the state site(s) where you lived when you used your previous name, and see what you find.

The applicable act is the Uniform Unclaimed Property Act of 1995. Section 25 of the act speaks to agreements to locate property. The intent of this section of the act is to enhance the likelihood that the owner of the abandoned property will be located by the efforts of the state and that the property will be returned to the owner without the need to pay anyone a finder's fee.

Past practice in many states was for unclaimed property locators or heir finders to use the state's lists of missing owners. These firms would contact the owners and propose to find their property for a fee before the state had an opportunity to locate the missing owners.

Some states have since enacted legislation that prohibits examination of these lists by anyone except an apparent owner or other person having a legal interest in the property, but in many states that kind of provision conflicts with public records laws.

On its Web site, the National Association of Unclaimed Property Administrators discusses the three ways that finders typically contact people requesting a fee to help you search for or collect unclaimed property. They're listed here:

1. Postcard or letter. If the finder is requesting a "flat fee" suggesting you might be entitled to unclaimed property (ex: $14.95), they generally have no idea whether you are in fact entitled to unclaimed funds. These companies are noted for collecting this fee and in return, sending you a list of unclaimed property offices throughout the nation. You might receive generic information on how to file a claim. (This information can be obtained at no charge and is listed on our Web site.)

2. You receive a letter telling you that you are entitled to a specific dollar amount and for a percentage of the funds they will help you collect it. Oftentimes, this property is still being held by the company (not yet reported to the state) or is held by a federal agency (not subject to reporting the funds to the state). You have a few options in this situation:

• Try to search for the property on your own. Go through your business transactions (securities-related property in particular) to verify that you've received recent communications from the company. Often mergers, stock splits, uncashed dividends and retirement accounts go unnoticed.
• Pay the fee and recover the funds.
• Try to negotiate the fee to something you are more comfortable with.
• Wait until the dormancy period runs out, and collect it directly from the state.

3. The finder has obtained information from state records and by law is allowed to contract with you for a fee. Oftentimes, the fee is between 10 percent and 25 percent. States are willing to assist you in the claim-filing process. You may contact the state personally and file the claim on your own behalf.

Since so much time has passed in your case, unless the asset is held by a federal agency that isn't subject to reporting the funds to the state, it's likely that you can find the asset on your own. Then, any money you choose to pay the finder for alerting you about recovering the asset is from gratitude for the heads up and not contractual.

If you can't find the asset on your own, then negotiate with the finder. State law places limitations on what they can earn, but you can always negotiate a lower rate.

Never pay a fee up front to a finder. Reputable finders always work on a percentage basis and get paid after you receive your money, not before. Make sure that the written agreement specifies that they only get paid for assets that you are able to recover. Check with the state's unclaimed property office to make sure that the finder is registered in that state.

-- Posted: Dec. 14, 2001