Stake your claim

Apparently, I get ripped off a lot.

I was reminded of this fact after receiving a letter in October from Pettinato & Associates, a Sacramento private-investigation firm that recovers unclaimed assets. The P&A letter claimed a credit-card company owed me more than a grand in payment overages and asked whether I would like it to collect on my behalf (for a 10 percent fee, of course).

While I liked the idea of a toothpick-chomping P.I. metaphorically taking a bat to the shins of some grafting Wall Street type, I’m not one to outsource my collection duties. On the website for the California State Controller’s Office, I learned that P&A’s claims were legit: A credit-card company did owe me a chunk of money. And so did about four other companies. In total, I was owed a little more than $1,500 by The Golden 1 Credit Union, a state health-care plan, Target National Bank and FIA Card Services, which held the largest vig.

According to the Controller’s Office, the Bank of America subsidiary that (mis)managed my Visa credit card for a number of years was hoarding $1,013.14 in overpaid credit-card bills. I have a vague suspicion there’s more money I’m leaving on the table, but will never know for sure.

Jacob Roper, a spokesman for the Controller’s Office, confirms there’s no way to determine whether companies report every inactive financial asset or customer overcharging to the state, adding, “But by reporting it, they remove their liability.”

That may prevent big-ticket fraud by credit lenders and other financial institutions, but the Interwebs are saturated with the stories of everyday folks who were hit with exorbitant fees even after they paid off their debts.

After a while, the little guy gets tired of doing battle with a faceless corporate entity with a labyrinthine automated phone tree and an endless supply of legal letterhead. That’s what happened to me, as well as thousands of life-insurance policy beneficiaries throughout the state.

In 2008, the Controller’s Office participated in a 20-state audit of national insurance-company practices and condemned what it said was an industrywide practice of cannibalizing the policies of dead people. The companies drew down the cash values of these “delinquent” policies until they were stone dry, and then canceled them without tossing a red cent to the beneficiaries. This happened even though the companies had access to what’s referred to as the “death master file” from the Social Security Office and were being contacted by the policy holders’ beneficiaries with “direct proof” of their loved ones’ passing, Roper says. In other words, these companies knew better.

This callous practice went on for decades, Roper says.

Four years after the audit, the Controller’s Office has now reached settlements with six companies—including American International Group Inc., Nationwide, MetLife and Prudential. Forethought Group Inc., which sells end-of-life policies through funeral planners, agreed last month to pay back $25 million. The office is negotiating settlements with another 20 to restore victims’ policy payouts to preliquidation levels.

But Roper admits his office only caught wind of this fraud because of the meager number of unclaimed assets the major insurance companies were reporting. There’s no telling how many companies out there are savvier about raising suspicions, Roper acknowledges. What he can say is that businesses are submitting fewer dormant assets to the state, but that has mostly to do with a change in the law in 2007.

All totaled, Californians received $516.3 million in unclaimed cash that year, the largest dollar total since at least the 1997-1998 fiscal year, which is as far back as the Controller’s Office graph goes. State residents also got back north of 39,000 shares of unclaimed securities during the 2010-2011 fiscal year.

As I can attest, the state isn’t getting to everyone with unclaimed property or money out there. (Remember: It was that P.I. firm’s letter that wised me up.) Roper calls the massive undertaking to reach every oblivious asset holder in California “a work in progress.”

Anyone can search the office’s website for property the state has received and unclaimed property it has yet to receive. Unsurprisingly, this has occasionally led to fraudulent claims, which is why the Controller’s Office is deliberate about vetting them.

All of this means I’m likely in for a slog as I try proving residence at an old address to get that chunk of change from FIA. But I’ll do it. There’s no way I’m letting those bastards steal any more of my money.