Current through Register 1531, September 27, 2024
(1)
Required Information for Reporting. All reporting of
abandoned property must be done in accordance with M.G.L. c. 200A, § 7.
Reports submitted to the Division must be in a format approved by the Treasurer
and must include the following:
(a) a
completed and notarized AP-1 Form;
(b) a statement that all due diligence
requirements of the law have been met by the holder, signed under the pains and
penalty of perjury, along with a copy of a sample due diligence
letter;
(c) an electronic copy of
the report (magnetic tape or diskette) in the file format currently approved by
the National Association of Unclaimed Property Administrators
(NAUPA);
(d) in the case of cash
property, a certified check or money order made payable to the Commonwealth of
Massachusetts or an Electronic Funds Transfer (EFT) (wiring instructions
available at the Division);
(e) in
the case of securities, a Depository Trust Company (DTC) transfer to the
Division (DTC instructions available at the Division), or, in the case of
non-DTC eligible securities, direct delivery or transmittal to the
Division;
(f) confirmation
statements must be included if mutual fund or dividend reinvest accounts are
remitted;
(2)
Negative Reports. Negative reports may be filed on the
AP-1 Form only and not electronically.
(3)
Disposition of
Property. All cash property not associated with securities shall
be deposited daily into the Massachusetts "Abandoned Property Trust Fund." All
records of cash deposits shall be entered daily into the Division's UPS System.
All securities and associated cash, such as dividends, shall be held by the
custodian(s) designated by the Division.
(4)
Required
Information.
(a) All abandoned
property holder reports submitted to the Division must include, to the extent
such information is available to the holder, the following information:
1. owner's name;
2. owner's last known address;
3. owner's Social Security or Federal tax
identification number (TIN);
4.
owner's date of birth and policy number (for life insurance
companies);
5. beneficiary's Social
Security number (for life insurance companies);
6. owner's account number (for financial
institutions);
7. check numbers,
amounts and dates (for checks and money orders);
8. maker(s) of check(s), if
available;
9. date of last activity
or contact with owner;
(b) If submitting checks with unknown owners,
holders must insert the word "unknown" in the last name field along with other
property identification information required by 960 CMR 4.03(4).
(5)
Rejection of
Abandoned Property Reports. The Assistant Treasurer reserves the
right to reject the report of any holder whose report is not received within 30
calendar days of the statutory reporting deadline, unless the holder has
received an extension for reporting pursuant to M.G.L. c. 200A, § 13B. The
Division shall notify every holder whose report is rejected by sending a
registered letter to the holder within five business days of rejection of the
report. Rejected reports shall be returned to the holder to be resubmitted in
compliance with M.G.L. c. 200A, § 7.
(6)
Penalty.
(a) In accordance with M.G.L. c. 200A, §
12(c), any holder determined to have violated the provisions of M.G.L. c. 200A,
§ 7, shall be liable to a penalty of not more than $500.00.
(b) In accordance with M.G.L. c. 200A, §
12(e), any holder determined to have failed to file an abandoned property
report within the time prescribed by M.G.L. c. 200A, § 7, including those
rejected in accordance with 960 CMR 4.03(5), shall pay the Treasurer interest
at the rate allowed by M.G.L. c. 200A, § 12(e).
(7)
Provision of Additional
Information to the Division on Abandoned Property Reports. Holders
of property with a value of less than $100.00 are strongly encouraged to submit
all information contained in 960 CMR 4.03(4), if it is readily available, so as
to strengthen the Division's efforts to reunite all rightful owners with their
abandoned property.
(8)
Reciprocity Agreements with Other States.
(a) The Division shall accept reports
containing property of non-Massachusetts residents who are owners of property
held by Massachusetts holders if the state in which the owner resides has
entered into a reciprocity agreement with the Treasurer. The Division shall
maintain an up-to-date list of all states with which it is party to a
reciprocity agreement.
(b) Holders
incorporated in Massachusetts or non-corporate holders with a principal place
of business in Massachusetts that wish to report abandoned property for
customers who live outside Massachusetts should report the property to the
respective state(s) in which those customers resided at the time their property
became reportable according to the laws of that/those state(s).
(9)
Holder Due
Diligence Requirements.
(a) In
accordance with M.G.L. c. 200A, § 7A, a due diligence notice must be sent
by first-class mail to every owner's last known address at least 60 days prior
to the filing of abandoned property reports with the Division. Nothing in 960
CMR 4.03(9) shall preclude holders from taking additional measures to contact
owners before remitting their property to the Division.
(b) Due diligence notices sent to owners of
property presumed abandoned pursuant to M.G.L. c. 200A shall include, but not
be limited to, the following information:
1. a
description of the property, including account number, policy number or other
identifying information;
2. a
statement explaining that state law requires holders of abandoned property to
report and remit such property to the Division after a designated dormancy
period (usually three years);
3.
the date the property will be remitted to the Division if there is no owner
contact.
(10)
Holder Penalty for Failure to Perform Due Diligence
Requirements. Any holder who knowingly fails to provide due
diligence notice as required by 960 CMR 4.03(9) shall be subject to a fine of
$1.00 for each owner whose property is remitted to the Division by the holder,
or $1,000.00, whichever is greater.
(11)
Activity. No
owner's property reportable pursuant to M.G.L. c. 200A, § 3 shall be
remitted to the Division if the owner maintains an active relationship with a
holder with respect to any property of the same owner. This activity shall
extend to all accounts, such as trust or investment accounts, which do not
normally require activity within the standard period of dormancy described
above. However, a "notice of inactivity" shall be sent to the owner of any
piece of property presumed abandoned by virtue of dormancy, regardless of
whether the property is subject to being remitted to the Division or whether
the owner has other active property being held by the same holder.
(12)
Reporting Procedures for
Individual Retirement Accounts (IRAs), Defined Benefit Plans, or Other Accounts
or Plans Qualified for Tax Deferral under the Income Tax Laws of the United
States. Property in an individual retirement account, defined
benefit plan, or other account or plan that is qualified for tax deferral under
the income tax laws of the United States shall be reported as abandoned
property three years after the earliest of the following dates: the date of the
distribution or attempted distribution of the property, the date of the
required distribution as stated in the plan or trust agreement governing the
plan, or the date specified in the income tax laws of the United States by
which distribution must begin in order to avoid a tax penalty.
(13)
Exemption for Reporting
Certain Credit Balances.
(a)
Pursuant to the reporting requirements detailed in M.G.L. c. 200A, §§
5 and 7, an exemption shall exist for any outstanding credit balance or
merchandise credit between vendors or commercial customers resulting from a
transaction occurring in the normal and ordinary course of business.
(b) Credit balances, as defined in
960 CMR 4.02, shall
not be considered abandoned property, in accordance with M.G.L. c. 200A, §
5. Credit balances may originate from activities such as customer overpayments
and shall include balance sheet credits, such as the payment to vendors for the
purchase of goods and services.
(c)
Nothing in 960 CMR 4.03 should be construed so as to suggest that any
commercial customer incorporated or registered to do business in Massachusetts
is exempt from abandoned property reporting obligations relative to credit
balances, as defined in
960 CMR 4.02, in
other domestic reporting jurisdictions outside of Massachusetts.
(14)
Reporting
Procedures for Certificates of Deposit.
(a) The dormancy period for any Certificate
of Deposit (CD) shall be deemed to commence upon the initial maturity date of
the certificate. Thereafter, certificates of deposit shall be presumed
abandoned in accordance with the provisions of M.G.L. c. 200A, §
3.
(b) If a Certificate of Deposit
reaches its initial maturity date and automatically "rolls over", the
Certificate becomes reportable as abandoned property three years following the
maturity date of the first "rollover", unless the owner consents to renewal at
or about the time of renewal by communicating with the person holding the
property pursuant to M.G.L. c. 200A, § 3A. An automatic "roll over" of a
Certificate of Deposit is not considered owner activity despite the fact that
an initial agreement between the holder and owner may include an automatic
"rollover" provision that requires no action by the owner.
For purposes of the application of 960 CMR 4.03(14)(b), a six
month Certificate of Deposit would be reported as abandoned property four years
from the date the account was opened, a one-year Certificate of Deposit would
be reported as abandoned property five years from the date the account was
opened, and a three-year Certificate of Deposit would be reported as abandoned
property nine years from the date the account was opened.
(c) If, at the time provided for remittance
of a dormant Certificate of Deposit in 960 CMR 4.03(14)(b), a penalty or
forfeiture in the payment of interest would result from the remittance of the
property, the time for remittance is extended until the time when no penalty or
forfeiture would result.
For purposes of the application of 960 CMR 4.03(14)(c), a
five-year Certificate of Deposit would be reported as abandoned property 15
years from the date the account was opened.
(15)
Holder Fees.
(a) In accordance with M.G.L. c. 200A, §
15C, a holder of savings/checking accounts may assess a charge or fee,
including an abandoned property processing fee, for accounts that become
inactive, provided that the charge or fee is:
1. expressed in a valid, enforceable and
written contract between the holder and the customer specifying the amount of
the charge or fee;
2. the customer
is notified prior to the imposition of the charge or fee; and
3. it is not the policy of the holder to
waive the charge or fee.
(b) Anycharge or fee shall be listed in a
holder's periodic schedule of charges and fees and shall be provided to every
customer upon the opening of his/her account.
(c) If a holder of savings/checking accounts
advises a customer of an increase in a charge or fee, or the imposition of a
new charge or fee, and the notice is included in a statement to a customer that
is returned as undeliverable, then the financial institution shall not impose
the new or higher charge or fee.
(16)
Retention of Owner
Records. Any holder who submits an abandoned property report
pursuant to M.G.L. c. 200A, § 7, and 960 CMR 4.03(1), shall maintain all
owner records and other information submitted in the report for a period of six
years following the remittance of the holder's records and information to the
Division.
