Nestled within a nondescript corner of the Colorado State Capitol is a small storage room, concealed behind a door reminiscent of a bank vault.
This unassuming space holds a vast collection of lost treasures owned by generations of Coloradans, including valuable items such as small gold bars worth $45,000 each, a 6.4-carat antique yellow gold diamond ring, a Lou Gehrig baseball card, and numerous gold coins.
However, much of the $2 billion in unclaimed property held by the state is not composed of these rare finds. Instead, a significant portion includes unclaimed tax refunds and abandoned bank accounts.
Established in the late 1980s as a consumer protection measure, Colorado’s Unclaimed Property Fund, often referred to as “The Great Colorado Payback,” aims to assume custody of dormant assets and return them to their rightful owners.
Yet, critics argue that the state could do more in its efforts to reconnect individuals with their lost assets.
As the fund increasingly becomes a target for cash-strapped lawmakers seeking to bolster budgets, concerns mount over the appropriateness of using these funds for ongoing state services.
One of the primary challenges faced by the Unclaimed Property Fund is convincing the public that its operations are legitimate.
Amid rising concerns about identity theft and fraud, many potential claimants find themselves hesitant to engage with the process.
Colorado Treasurer Dave Young emphasizes the importance of ensuring that rightful owners are reached.
For physical items, the state sends letters to potential owners, but these efforts yield limited responses; for every hundred letters mailed, only a handful result in claims.
“Maybe ten if we’re lucky, that will come back to try to claim it. So it’s a little bit frustrating, but it’s rewarding for those who we can get back,” explained Bianca Gardelli, the Director of the Unclaimed Property Trust Fund.
To facilitate claims, individuals can proactively search for their names in an online database managed by the Treasurer’s office.
While claims under $250 can be accessed quickly, larger claims may lead to a complicated and time-consuming process requiring various forms of verification.
“Sometimes it can be a Social Security Number or some other personal information that verifies that they are the actual owner,” said Young, acknowledging the understandable apprehension many feel about providing personal information.
In the past year, Colorado returned 86,000 claims valued at nearly $80 million, marking an increase of 12,000 claims from the previous year.
Thanks to technological advancements, Young asserts that the claims process has streamlined significantly over time, aiming to enhance outreach and improve efficiency.
However, not all claims are straightforward.
Nissa Oldefest, a 74-year-old Denver resident, spent nearly a year unsuccessfully trying to verify her claim for $800 from a joint account with her late husband.
Despite her efforts to provide extensive documentation, her claim was ultimately denied due to complications involving her estranged adult son, who is also listed on the account.
“I figured there’s nothing that I can give them that’s going to prove [my claim],” Oldefest stated.
Despite being tech-savvy, she reflected on how many others might give up under similar circumstances.
According to the Treasurer’s Office, while the average claim takes approximately 11 days to resolve, complex cases involving businesses and multiple parties may require extensive staff research, which accounts for about 5% of all claims.
As conversations around reform continue, industry advocates, including Ron Lizzi, argue that states should adopt proactive measures to return unclaimed funds, utilizing existing data about residents.
Lizzi’s perspective is that states should leverage this information to facilitate automatic returns, thereby alleviating the burdens placed on claimants.
To illustrate this, he mentions Wisconsin’s approach, where the unclaimed property fund is managed by the Department of Revenue, enabling staff to cross-reference tax data to streamline returns.
In response to the broader movement for reform, the Treasurer’s Office is exploring ways to expand their proactive claims processes.
Last year, they initiated 264,000 proactive claims and sent notifications via checks and emails, yet the ability to enhance these efforts depends significantly on the state’s budget and legislative support.
Lizzi also emphasizes the need for states to reconsider overly rigid documentation requirements that often complicate the claims process.
Recent legal actions have added another layer to the issue of unclaimed property in Colorado.
A lawsuit filed in 2022 accuses the state of insufficient notification before taking possession of properties and claims a lack of due process in declaring assets unclaimed.
The lawsuit, led by two individuals from Fremont and El Paso counties, seeks class action status for all affected parties in the state’s fund.
The state maintains that both plaintiffs could have located their property on the site’s database, even though they did not receive proactive notifications.
Additionally, another significant matter is unfolding in Ohio, where a federal lawsuit aims to block state plans to appropriate a substantial amount of unclaimed property funds for a stadium renovation project.
This could have implications for how similar funds operate across the nation, including in Colorado.
With a staggering $600 million utilized from Colorado’s unclaimed property fund over the past two decades, legislative interest in accessing these resources remains robust.
Several proposed measures sought to permit tapping into the fund for various state needs in the latest legislative session.
Democratic Rep. Junie Joseph advocated for a bill that would allow borrowing from the fund to support energy efficiency initiatives aimed at meeting decarbonization goals.
The measure ultimately failed, in part due to concerns voiced by Treasurer Young regarding the feasibility of repayment.
Young expressed skepticism about whether lawmakers would genuinely return the borrowed funds or simply utilize them as a stopgap in difficult financial times.
In contrast, a bipartisan effort succeeded in passing a proposal to borrow against the interest earned by the fund’s investments to aid safety net healthcare providers.
Democratic Sen. Kyle Mullica remarked on the necessity of making tough budgetary decisions to ensure that vital services for Coloradans continue.
Looking ahead, the Treasurer anticipates further attempts to access the fund in future sessions, highlighting the complex interplay between fiscal pressures and the obligation to return unclaimed property to its owners.
Having once been an enthusiastic supporter of funding measures while serving in the legislature, Young now prioritizes education on the inherent legal and financial risks involved with these funds as he seeks to safeguard their original intent.
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