Dude! Where's my money?!?!?

[samhexum]

A chilling tale of how easy it is for banks to lose your money

By John Crudele

 

Two years ago, I wrote a column that frightened a lot of people. Now, I’m going to scare you again — this time, maybe even more.

 

That column, which appeared on Sept. 24, 2015, explained that it had become easier for states to confiscate people’s bank, money market and other financial accounts because they were “abandoned.”

 

So-called escheatment laws have been on the books forever. But states have been changing the rules so that it has become simpler for them to consider an account dormant — and then take it over.

 

It’s a great scam for states that are desperate for money.

 

I wrote that 2015 column at the urging of the Investment Company Institute, which represents mutual funds and other financial institutions. The ICI was rightly concerned because these days an account could be considered abandoned even if the owner regularly got paperwork from the financial institution.

 

In today’s world, the owner has to take an active participation in the account — deposit or withdraw money, make an inquiry, etc. — in order to avoid this fate, ICI told me.

 

“No, no, no,” a lot of readers wrote to me. That couldn’t be true. The ICI and I must be wrong.

 

Well, here’s a personal story that will convince you and probably make you run to your bank today.

 

In 1999, my mother, Margaret Crudele, did a very nice thing. She opened a bank account at Staten Island Savings Bank for each of her eight grandchildren. She deposited $1,000 in each account, and she wanted the kids to get the money after she died.

 

Not a great deal of money, but a wonderful gesture for the kids, who were in their teens at the time.

 

I don’t think I ever knew about the accounts, but my sister did. And since my mother is still going strong today at 90, there was never a reason to think about the money.

 

Staten Island Savings Bank was acquired by another bank, which then merged into still another. Santander Bank, a Spanish company, took over all of them around 2009.

 

My mother’s checking and savings accounts were automatically transferred from Staten Island Savings to each successor bank and, finally, to Santander, where she became a regular customer who visited a branch at least once a week.

 

To put it bluntly, each one of these banks knew that she isn’t dead. She walked through the bank doors every week. She still does so at Santander.

 

But somehow, the eight grandchildren’s accounts went missing. Were they stolen? Misplaced? Turned over to New York because my mother hadn’t actively managed them?

 

My mother never would have cashed them in, and there’s no record of her doing so.

 

And in what year could any of those snafus have happened? Maybe when Staten Island Savings was still in business. Or when the banks were tidying up their books during each merger.

 

It turns out that the accounts went bye-bye in 2005 — all on the same day. The kids, who didn’t have the paperwork, didn’t withdraw it.

 

And there is no record of where the money went. I only know this because Santander went the extra mile to investigate something that — it turns out — happened long before it arrived on the scene.

 

And, yes, we’ve checked New York’s abandoned property lists, and the accounts are nowhere to be found.

 

I have people still looking for the cash, and it will probably eventually be found — but surely missing the interest that would have accumulated over the years.

 

So, there you are. Don’t doubt that this can happen to you. Scared yet? Do you know where all your accounts are?

[+ BlueSky]

It's a good reminder to check abandoned property lists in states where you have lived. I recovered money--not a lot of money but still--from over 20 years ago. It was apparently a utility refund that never got to me. It can't hurt to check.

[rvwnsd]

This author is being extremely irresponsible for linking escheatment, which is a consumer protection against banks closing dormant accounts and keeping the money for themselves, to an obvious bank error. Before a bank escheats any property, whether it is money in a bank account or the contents of a safe deposit account, they notify the customer of the potential for escheatment. They also do not automatically escheat dormant accounts when the client has other, active accounts. Additionally, had the accounts been escheated New York State would have a record of that having occurred.

 

These accounts were not escheated to the state. Rather, one of the predecessor organizations lost the accounts, probably during one of the many conversions associated with the many mergers this bank apparently went through. What the author does not mention is that at some point (probably in 2005) his mother stopped receiving bank statements on these accounts. When she stopped receiving the bank statements she should have immediately notified the financial institution that eight of her accounts were missing. Nonetheless, Santander has determined that the accounts all went missing on the same day in 2005 but they don't know what happened to the money. Seems odd that he needs "people" to look for the money. If the accounts "disappeared," there is no record of his mother withdrawing the funds, and no one knows what happened to the money why isn't he making the bank give his mother the funds? And if the bank refuses to do so, why isn't he filing a Consumer Financial Protection Bureau complaint to force them to do so? This story is simply not adding up.

 

Interestingly, Googling the author's name links to a story by the Columbia Journalism Review about his faulty journalism on a different story. This guy sounds like a hack.

[gallahadesquire]

My financial advisor sold an annuity and purchased another one, mostly for the tax-free accumulations that accompanied it. I randomly went online, and found a pile of cash was missing.

 

I called him immediately.

"Oh!" he said, "You caught us with our hand in the cookie jar!"

[jawjateck]

The key to my investing success is that I manage my own affairs, keep up with all accounts regularly, and never put funds somewhere then just forget about them. I do not presume accuracy or integrity by any financial institution.

[Beancounter]

The key to my investing success is that I manage my own affairs, keep up with all accounts regularly, and never put funds somewhere then just forget about them. I do not presume accuracy or integrity by any financial institution.

+1

 

I’m the same way, jawjateck!

[Rudynate]

When I was a kid, it happened to my parents. They let a small balance lay dormant in a pass book account for a long period, don't know exactly how long. When they finally contacted the bank about it, they were informed that the account had been closed and the funds turned over to the state.

[samhexum]

Every few months I go through the missing money sites for several states, checking for myself & my friends & family. I've occasionally found $ for others, never for myself, because I'm vigilant about my own funds. The most annoying thing is when I come across funds for people & they don't bother to claim them. There was a woman in my co-op who I alerted several years ago. She never claimed the $ & she died last year. There's a childhood friend I don't speak to anymore who has 2 such accounts... I've alerted mutual friends, but he's never done anything about it. My pot dealer has three such accounts.

 

I found money for my building's former superintendent & two of his relatives. They all claimed them. He was fired before I had the chance to ask him for a proper reward. Hmmm.... what would I have asked for? This is him: