Think Unclaimed Property Isn’t Your Problem? Here’s Why Ignoring Compliance Could Cost You Big

Why Unclaimed Property Compliance Is the Risk You Didn’t Know You Had 

What happens to forgotten paychecks, dormant accounts, or unclaimed refunds? For several businesses, such ‘out of sight, out of mind’ assets can quickly turn into a major compliance risk. In fact, the situation is quite dire, with a recent report claiming that over $77 billion in unclaimed property in the United States, and almost 80% of organizations not being fully compliant with state laws.

So why does this matter now more than before? States are focusing their enforcement efforts, introducing new rules for everything from virtual currency to retirement accounts, and expanding the scope for audits. In 2025, many states implemented aggressive new standards for detecting and reporting on unclaimed property, while others have decreased dormancy periods and increased penalties that arise from non-compliance. Firms like Deloitte and PwC warn that these changes, in combination with heightened regulatory scrutiny, are causing unclaimed property compliance to be a major risk for finance and tax teams. 

This blog uncovers why unclaimed property compliance is more than simply a regulatory box to check – and how overlooking it can end up costing your business way more than you think. We’ll go through the latest trends, and the best practices, with insights from top accounting and advisory firms, so you can adapt and stay ahead of the competition. 

What is Unclaimed Property and Why It Applies to Your Business 

Defining Unclaimed Property 

Unclaimed property can be defined as the financial assets or tangible items that have been abandoned or forgotten by their rightful owners for a particular period, known as the ‘dormancy period’. Once this period lapses, businesses in possession of these assets are legally required to report and remit them to the appropriate state authority. 

Common Examples 

Why Does It Matter? 

Each U.S. state has its own unclaimed property laws, and the rules can change considerably between them. Collectively, the states hold more than $77 billion in unclaimed assets, and the volume increases each year. Businesses are obligated to track, report, and remit these assets – regardless of where the owner resides. 

State Laws and Escheatment 

The process of transferring unclaimed property to the state is defined as ‘escheatment’. States leverage these funds to support public programs until the rightful owner comes forward. Non-compliance can lead to audits, penalties, and reputational risk, making it vital for organizations to understand their obligations. 

Navigating the Unclaimed Property Compliance Maze: Laws, Trends & Enforcement 

A Patchwork of State Laws 

Unclaimed property compliance in the U.S. is governed by an intricate web of state-specific statutes. Each of the 55 U.S. jurisdictions – this includes all states, D.C., and territories – have their own rules for what is considered unclaimed property, dormancy periods, and reporting requirements. For instance, most states require businesses to report property after a dormancy period of 3-5 years, but some states also feature unique rules for certain asset types. 

Recent Legislative Trends 

2025 has seen a wave of legislative changes, with states updating their statutes to address new asset types and close compliance gaps. Notable trends include: 

Escalating Enforcement 

States are aggressively expanding enforcement through audits, voluntary disclosure agreements, and penalties for late or inaccurate reporting. Delaware, for instance, is still the most active state for unclaimed property audits, necessitating special verified reports and threatening audits for non-compliance. As claimed by PwC and KPMG, states are increasingly leveraging third-party auditors and whistleblower lawsuits to detect non-compliance, leading to significant financial and reputational risks for businesses. 

Why Staying Current Matters 

With less legislative changes, administrative reinterpretations, and heighted audit activity, companies need to strive to stay vigilant. Leading firms like Deloitte and EY emphasize that understanding the evolving regulatory landscape is essential for minimizing risk and ensuring compliance. 

The Real Cost of Non-Compliance: Penalties, Audits & Reputation Risks 

Financial Penalties and Interest 

Non-compliance through unclaimed property laws can cause substantial financial penalties, interest charges, and even the loss of property. States usually tend to impose fines for late or inaccurate filings, with some costs up to $100 per day, per report. However, enforcement actions have gone up by 30% in the last three years, with average audit settlements usually increasing beyond six figures for mid-sized companies. 

Reputational Damage 

Going beyond the financial impact, not complying can also affect your company’s reputation. Publicly reported enforcement actions and lawsuits can chip away trust with customers, vendors, and investors. A study by Deloitte uncovered that 62% of finance leaders claim reputational risk is a major concern when it comes to unclaimed property compliance. 

Increased Audit Risk and Business Disruption 

States are becoming increasingly aggressive when auditing companies suspected of non-compliance. These audits can be quite lengthy – with some spanning several years – and need to be supported with extensive documentation. Third-party auditors, often focusing on contingency, are incentivized to maximize findings, which can affect business operations and divert resources from core activities. 

Real-World Examples 

Why Businesses Struggle with Unclaimed Property Compliance 

1. Data Management and Recordkeeping 

Organizations often struggle to maintain accurate records of outstanding checks, dormant accounts, and similar potential unclaimed property. Inconsistent data entry, system migrations, and decentralized operations can all cause gaps or errors. It is reported that over 60% of companies claim data integrity as one of their main compliance challenges. 

2. Multi-State Reporting Complexities 

With different rules across states for dormancy periods, reporting formats, and due dates; multi-state businesses face a confusing web of compliance requirements. Missing a single deadline or misunderstanding a state specific rule can result in audits and penalties. Deloitte notes that companies operating across more than five states are twice as likely to face compliance issues compared to single-state businesses.

3. Lack of Internal Awareness or Training 

Unclaimed property compliance often falls between the cracks, with no single department taking ownership. Staff may be unaware of reporting obligations, especially as regulations evolve. Regular training and clear assignment of responsibilities are essential but frequently overlooked. 

4. Technology and Process Gaps 

Manual processes and outdated systems make it difficult to track, identify, and report unclaimed property efficiently. Automation and specialized compliance software can help, but many organizations have yet to invest in these tools. EY’s 2024 compliance outlook highlights that companies leveraging automation reduce their risk of non-compliance by up to 40%. 

5. Evolving Regulatory Environment 

Frequent changes in state laws, new asset types (like virtual currency), and shifting enforcement priorities mean that yesterday’s compliance strategy may not work today. Staying current requires ongoing monitoring and adaptation—something many organizations underestimate.