Find Your Lost Funds - Savings Bonds (Detroit Free Press)

October 6, 2011


Susan Tompor: Billions in savings bonds sit uncollected

BY SUSAN TOMPOR
DETROIT FREE PRESS PERSONAL FINANCE COLUMNIST

Who couldn't use an extra $500 or $1,000 or more?

So why is $16.2 billion just sitting there uncollected in the form of U.S. savings bonds?

Maybe an uncle or aunt bought a savings bond for you a long time ago and you never saw it. Maybe someone died.

The federal government doesn't usually send notices informing you that you did not cash a bond that stopped earning interest 20 years ago.

About 45 million U.S. savings bonds do nothing but collect dust. That's if they're shoved aside in a shoe box and haven't been thrown out.

Never think you could lose anything as valuable as a savings bond? You put everything important in a secure spot? Think again.

"In my house, that 'safe' place has changed three or four times in the last 20 years," said Daniel Pederson, who has a Web site called www.bondhelper.com and is author of the book "Savings Bonds: When to Hold, When to Fold."

Pederson, a Monroe-based expert on bonds who has held seminars that help bond owners avoid costly mistakes, says he knows he's missing a few bonds, too.

"I have two I bought for my son. I don't know where I have them right now."

I know what he means. I've been writing about savings bonds for much of my career and was shocked this summer to discover that I lost more than a dozen of them.

What's lost under your mattress?

Hunt for those savings bonds

One tough part about losing your parents is that sometimes you're forced to tie up loose ends. For many families, like mine, that means looking for lost U.S. savings bonds.

My parents, maybe like yours, bought paper savings bonds through payroll deduction and for special occasions.

During parts of the 1980s, savvy savers actually rushed to buy U.S. savings bonds -- I am not kidding -- to lock in high interest rates. My mother nudged me to buy savings bonds back then, too, when I was in my first job.

Since Mom was my go-to gal for advice, I took my checkbook to the bank and bought those bonds. I wasn't the only one.

Somewhere out there, Americans are looking at more than 665 million savings bonds valued at more than $180 billion. Most are still earning interest.

But about 45 million of those bonds worth $16.2 billion are likely missing and no longer earning any interest. They need to be cashed if they can be found.

But Daniel Pederson, a Michigan-based expert who runs www.bondhelper.com, said many people cannot find their bonds. Think of all the people who moved while in the military; switched jobs in their careers; stored stuff in someone else's attic.

Pederson said he thinks he may have lost a few bonds after he took some bonds to talks he gave to groups. After my father died several years ago, I inherited the chore of tracking Mom and Dad's savings bonds. A lifetime of accumulating bonds meant I had figure out which bonds would mature when and drive Mom to the bank to cash some bonds each year. Mom's memory was fading, but her bonds had a life of their own. Sadly, I miss our crazy little trips to the bank.

But after Mom died, we had to ask: Did we have all her bonds?

Everyone should ask that question. "The toughest part is just getting started," Pederson said.

First stop: The Treasury Department Web site: www.treasuryhunt.gov .

You enter your Social Security number and if you've got a bond in the Treasury Hunt database, you'd receive an e-mail alert.

But the e-mail does not tell how many bonds you're missing or what they're worth. You're prompted to submit contact information.

The Bureau of Public Debt said a little over 1% of the 3 million searches conducted online this year resulted in people sending back contact information. Publicity on ABC's "Good Morning America" this summer generated more searches than usual.

Michigan resident Catherine Townsend searched the Treasury Hunt after seeing a segment on TV, but she didn't find a bond for herself. She searched for her husband and found a bond he bought when he first started working at General Motors in the mid-1970s.

"He probably forgot he even had it," she said. "Anybody can go online and try to see what they have."

After filing out the proper paperwork, the couple received a little more than $100.

The key is taking the next step. "Some people don't follow up," said Lateefah Thompson, public affairs specialist for the Bureau of Public Debt. What can be confusing is that Treasury Hunt will not find every bond. You need to do more work to find really old bonds -- or some relatively newer ones.

The online system finds Series E bonds issued in 1974 and after. It only identifies bonds in that group that are not earning interest. The best way to find out about all possible lost or stolen bonds is to contact the Treasury, Thompson said, and submit Form PD F 1048, a six-page form with instructions. Of course, sometimes tearing up your house works, too. Remember those bonds Mom urged me to buy in the mid-1980s?

I thought I had them all -- they won't stop earning interest until 2015 and 2016. But somehow, my sister found a stack of my bonds in my parents' cedar chest when she looked for other paperwork.

I moved a bit in the '80s. Did I give the bonds to my parents for safekeeping?

By filing the form 1048, we discovered an unredeemed 1952 bond that we had no clue about. That bond cost $18.75 originally and is now worth $170.66. It stopped paying interest in 1992. Maybe, my parents lost that bond when they moved from my grandmother's house to their first and only home?

In all, the Treasury search found a dozen bonds that belong to my sister, other family members and me. Three unredeemed bonds bought in the 1970s stopped earning interest in 2005 and 2007. Overall, the dozen discovered bonds are worth about $10,000 before taxes. Now, we've got more paperwork. Many are still earning interest, so all would not have been found with just Treasury Hunt.

The young man at the Bureau of Public Debt who is looking at this mess called me one day and told me three times that I should not be intimidated by all the forms he would send me. He sent a very detailed letter on what to do next. I begged my husband to look at the forms -- and this guy's roadmap.

One "lost" bond in the mix is a Series I inflation-indexed savings bond I had bought my son when he was little.

My son, with an eye on high school and college, said: "Well, you better find that bond."

Contact Susan Tompor: 313-222-8876 or stompor@freepress.com

Insurance Companies Sued for Knowingly Stiffing Heirs ( from LifeHealthPro )

Prudential, MetLife Sued over Death Master File

By Arthur D. Postal

February 1, 2012

State efforts to collect on unclaimed property held by insurers has mushroomed into private action lawsuits filed in Illinois, Ohio and New York against Prudential and MetLife.

The lawsuits are coming to light against the background of a hearing Thursday on inaccuracies related to the Death Master File mainted by the Social Security Administration.

The DMF is the primary research tool being used to allege that insurers did not follow applicable state law on unclaimed property, either by not being aggressive enough in seeking to find beneficiaries of life insurance policies, or, in the alternative, turn the money over to the state.

In a suit filed in Chicago, Total Asset Recovery Services, based in Auburn Hills, Mich., alleges it discovered a "massive fraud" by Metropolitan Life Insurance and Prudential Financial.

The suit alleges that the two firms kept more than $524 million in unclaimed life insurance money that should have been turned over to Illinois.

And, a class action suit alleging securities fraud was filed in Manhattan Jan. 12 against Metlife by the City of Westland Police and Fire Retirement System, Westland, Mich.

The suit alleges MetLife made “false and misleading statements” regarding its financial statements because it took a charge in the third quarter of 2011 related to a determination that it owed money by either not paying off policies to proper beneficiaries or turned the money over to the appropriate states under escheat laws.

And, an Ohio state court based in Cleveland Tuesday dismissed a complaint against Nationwide Insurance Company in which a life insurance policyholder who is 71 years-old filed suit.

The plaintiff said he filed suit out of concern that his death is imminent and he is fearful that because Nationwide allegedly “has failed and continue to fail to make reasonable attempts to determine when the beneficiaries of a life insurance policy are entitled to death benefits.”

The plaintiffs fear … “that as their deaths are impending they fear that that their life insurance policies will not be honored.”

The suit asked that Nationwide be required to make at least annual DMF searches for insureds with more than a 70% chance of having died.

The court dismissed the suit, on the grounds that (a) plaintiffs lacked standing because their alleged injury was too speculative and (b) the duty plaintiffs sought to impose was foreclosed by the terms of their policies.

The plaintiffs have appealed to the Ohio Court of Appeals.

The Illinois case was filed almost a year ago but only unsealed earlier this month.

It is a so-called “qui tam,” or whistleblower complaint in Cook County Court.

The suit said MetLife and Prudential "filed false records omitting these unclaimed funds."

It says the insurers should be fined more than $1.5 billion under the Illinois False Claims Whistleblower Reward and Protection Act.

Tom Prescott, equity-owner and spokesperson for Total Asset Recovery Services LLC, said that with regard to the suit, the Illinois attorney-general’s office has said that it will soon submit for the court's consideration a motion to intervene and simultaneously dismiss the suit because it is negotiating a settlement with MetLife and Pru.

Prescott complained that it is likely that Illinois will settle “for pennies on the dollar.”

He said that, “We think this is incredulous and unfair to the citizens of Illinois compared with what they should receive given the companies' documented fraudulent activities in this area) after having utilized our data findings and supporting documentation to extract the relevant monetary and policy concessions.”