Hello Planet Money listeners.
This is Kenny Malone.
We have a story today, one of our absolute favorite episodes that originally aired a few years back, but since then, there have been a few significant updates.
So stick around to the end of the story to hear those.
Here's the episode.
This is Planet Money from NPR.
A few months ago, So I heard about a guy who had a small fortune taken from him, Walter Schram.
We got Walter on the phone to ask him about his missing money.
And he was angry, but you should know that the angry version of Walter Schram sounds like this.
It would've been nice, but I guess that's gone.
Walter is very chill.
And, ironically, it's that trait that both brought him a small fortune and cost him it.
Here's what happened.
Walter is Italian, and in the late 90s, he had the brilliant idea to start a company selling Italian specialty products online, largely to Americans.
Like coffee machines, pasta machines, coffee.
At first, it seemed like things were going really well.
Except for that, around the same time, another online retailer launched, Amazon.
They were bigger, seemed to have endless money, they're not even worried about turning a profit at this point.
But this is not where things go south for Walter, really.
It was unfortunate, sure, but to him, the Amazon thing was just another great investment opportunity.
I said, let's set up an account with E -Trade and buy a few Amazon shares for a few thousand dollars.
So your thinking was if we can't beat them, join them.
Join them, exactly.
And of course, Walter had a characteristically chill investment strategy.
Buy this stock and just let it sit.
He made a point not to log into the E -Trade account that held his shares.
If you believe in a company, you need to buy the stock and let it sit for 20 years.
I mean, that's the philosophy of Warren Buffett.
Go out and have a walk, enjoy nature, talk to your family.
Don't worry about the stock market.
So Walter does just that.
He waits until 2015, about 20 years to finally cash in his Amazon stock.
At that point the stock he'd bought for around $6 ,000 should be worth around $100 ,000, and And so after years and years of not looking, Walter finally logs back into his eTrade account.
Do you remember what you saw when you logged in?
I saw nothing, the account was empty.
So it was a big shock.
A very Walter Shram way of saying, he was terrified.
He wanted to retire, he was counting on this money, and now it was gone.
So Walter calls up eTrade to say, where are my shares?
And eTrade tells him, yeah, you're going to need to speak to the state of Delaware.
That's where eTrade is incorporated.
Walter is like, okay.
And eTrade says, yes specifically you should ask for the Delaware Unclaimed Property Office.
Walter calls them up.
And finally they explained to me, there's a technical term that I don't remember, that My stock had been.
I think it's S -G. Yeah, something terrible word like that.
This terrible, unpronounceable word. It was the first sign that Walter had stumbled onto something huge.
An obscure government program that, depending on how you look at it, is either a brilliant way to protect you from greedy corporations or a way for state governments to literally reach into your accounts and take your money.
Hello, and welcome to Planet Money.
I'm Kenny Malone. And I'm Audrey Quinn.
Our government ends up with a stunning amount of our stuff.
Stocks, paychecks, bank accounts.
Today on the show we bring you a classic episode from 2020, one that is, in hindsight, a kind of bit of a public service.
It's about how the government gets this stuff, this unclaimed property, how you can get it back, and why Walter Schramm may never see his stock again.
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First thing I needed to ask you is how do you say, as cheat?
As sheet. Can you say it one more time?
As sheet. As sheet.
So my Twitter is don't give a sheet.
Jennifer Borden runs an cheat law practice.
As sheet by the way, E -S -C -H -E -A -T.
Are there other sheet puns?
Don't give a sheet, a sheet happens.
There's only two I can come up with off the top of my head.
If Aichit sounds archaic, that's because it goes back to feudal England.
It's essentially the act of the state taking control of property on behalf of its citizens.
The concept has been updated pretty dramatically, and is now employed in the United States.
And the way that this works now is that each state, like each actual state government, department, has an unclaimed property department.
Because we... the people...
are forgetful. Yes.
We forget about retirement accounts, insurance policies, safe deposit boxes.
When you forget about stuff like that, after a certain amount of time, the state is able to step in, take ownership of your unclaimed stuff, and hold onto it until you can come and claim it.
Think of it as like a giant state run lost and found.
And this used to be Jennifer Borden's job.
She worked at the Massachusetts Division of Unclaimed Property.
What's the weirdest thing you've ever seen as sheeted?
We did one time have a sheeted guns and blueprints to a bank.
Those are from a safety deposit box.
I wonder what they were up to.
Yeah, not positive.
Every state in the country does some version of a sheet, and the way it used to work in the past was the state would take control of your stuff, on your behalf of course.
And And then they would take out a newspaper ad saying, like, hey, Joe Smith, we have your stuff.
Come get it. This is my favorite part of this whole thing because states all over the country still keep these lists of missing stuff just now with a website, not a newspaper ad.
And this brings us to my new favorite party trick, which I'm going to do right now with Kenny.
Yes, Audrey has made me to promise not to do this until we're recording.
We are now recording.
So, okay, what do I do here?
What state have you probably spent the most time in in recent years?
In recent years, the most time in Florida.
By far. Okay, so I want you to look up lost money, Florida.
All right, here's Florida's a sheeting site, I guess.
It has a better name than I would have thought.
Florida treasure hunt .gov.
Okay. Type your name into the little search box.
Okay. there's there is a Kenneth D Malone that is my old address like a pretty old address though all right property type vendor checks reported by national public radio any you you have a you have a missing paycheck from NPR yeah this is great I'm I'm a 100 percent taking a vacation if this is enough money Uh -oh, it's $40, which is fine, which is fine.
But yes, I happen to know, Audrey, that you did this and had much better luck than I did.
I found $800. Yes, $800 is good.
The point is that you listening at home, you should look yourself up.
You may have left behind a paycheck, utility credits, a bank account you thought you closed.
Your state has stepped in and is holding that money for you.
And you can see the argument for why this is a good thing the state does on your behalf, like, you know, companies don't necessarily have the most incentive to get that money back to you.
Like, I love NPR, but you've heard our fun drives.
I don't know how hard NPR was gonna try to get that check back into my hand.
And so what happened in that case, instead, is that NPR is required to tell the state of Florida, can he never cashed his check, and then Florida says, great, cut that check to us.
We're gonna hold on to the money for him, and now he can file a claim for it.
Some version of this happens in every state for all kinds of companies.
At the end of the year, companies have to report seemingly abandoned money to the state.
The state takes control, boom, the money goes to the financial, lost and found.
For years, this was a big part of Jennifer Borden's job.
She was working for the Massachusetts government trying to connect people with their abandoned stuff.
And she loved that.
but the more time she spent thinking about as she has like a system, the more she started to notice problems. Well the interesting thing about unclaimed property is the states are able to use that, those, the cash or the assets until such time as the owner comes forward. So it's almost like the state has a little loan they can give themselves of other people's money.
And it is a lot of money.
States are taking in about $8 billion a year of unclaimed property, and about two -thirds of that money stays unclaimed, so in most states it just gets folded into the state's budget.
Unclaimed property is the fifth largest source of revenue for California.
It's the third largest source of revenue for Delaware.
Unclaimed property all across the country helps fund public programs which might seem like a good thing.
But it can create some perverse incentives.
Do we do a good job getting money back to people or do we just let it sit here and we don't have to raise taxes?
Yeah, it just seems like a conflict of interest. Cynically, yes, because if you do your job well, you don't have any money left. If you don't do your job well, the penalty is that you have more money to keep in the state coffers.
Now, Jennifer is careful to say the people at unclaimed property offices want to get unclaimed property back to the rightful owners.
It is the best part of the job, she says.
But maybe there is a systemic problem.
Like this Isheet system is supposed to stop companies from turning your forgetfulness into their profit.
It's possible states are now just doing a version of that same thing.
The amount of unclaimed money states take in every year is going up, and states have gotten a lot more aggressive in how they take the money in the first place.
The more Jennifer considered all of this, the more she thought, maybe my Isheet talents would be better spent elsewhere.
She still thinks that Isheet is, on the whole, a great system, but she now helps people and businesses protect their money from Isheet.
Is there like a playbook for states to bring in more unclaimed money?
Sure, so there are a couple of things that cause additional revenue to come in, excuse me, additional unclaimed property to come into a state, which could turn into additional revenue.
Jennifer says states are getting looser with their standards about what qualifies as abandoned property.
For example, it used to be that an account was deemed abandoned only after a piece of mail was sent to the account holder, then got returned by the post office.
The person couldn't be reached.
But now, in a lot of states, property gets labeled abandoned just because a person didn't check into their account or access the account within a certain length of time.
Which, I don't know, feels like a sneakier kind of standard. Also, in a lot of states, the length of time before your account is deemed inactive has been shrinking.
States are stepping in more quickly to helpfully take a hold of your money.
And all of this brings us back to Walter Schramm, the very chill, but actually quite mad, investor who bought a bunch of Amazon stock back in the 90s.
I think it's a mistake to check the stock market.
You know, it makes you nervous.
You don't sleep well.
Walter's very patient investment philosophy, buy stock, then check back in 20 years.
he thought he was being a smart investor, the state of Delaware thought he'd forgotten about his stock.
They issued it back in 2008.
They hadn't told him.
So great. Problem solved!
The state of Delaware was holding on to Walter's Amazon stock.
No! That is not what happened.
See, one of the problems with a sheet is that it's not always clear how it would work with different kinds of things people forgot about.
So for like a check or a bank account that someone forgot, that's pretty straightforward. The state can assume control over that money.
It was just sitting there.
Now it can sit in the state's account.
But with abandoned stocks or bonds, the state takes control of your investment and it doesn't want to become your portfolio manager, so it cashes out your investments, just holds on to that money for you.
So obviously the state cashing out your stocks could work in your favor if the government cashes you out right before your stock takes a dive, or it could totally screw you, which is what happened to Walter.
Delaware sold his Amazon shares in 2008, which was before Amazon had become Amazon.
Walter got the Delaware Unclaimed Property Office on the phone and they invited him to file a claim for the 2008 value of his stock.
So they are offering me today to give me $8 ,000 for a stock that is worth way over $100K.
$8 ,000 for stock that was worth $100 ,000.
It's actually now worth even more than that.
Walter hasn't checked the Amazon stock price in a while and it's too depressing.
after the break we call the state of Delaware and asked does Walter really need to take this a sheet it's bad you wrote it Audrey it's not a coincidence that Walter's stock was taken by Delaware that is where two -thirds of all Fortune 500 companies are incorporated and that's a lot of potentially lost accounts to keep track of.
We talked to the person who's in charge of that.
I'm Brenda Mayrack.
I am the Delaware status -cheater and director of the Office of Unclaimed Property.
After talking to Walter and our a sheet lawyer Jennifer, there were two main things we wanted to ask Brenda about.
The first was about this idea that unclaimed property has become a huge source of revenue for states.
For the last few years, Delaware's general fund has gotten a lot of money from Ishit, around $550 million a year.
Does your office feel any pressure to make sure that money keeps coming in?
It is a fairly stable revenue source from year to year, and it has been.
I wouldn't say we feel pressure, we really just want to make sure that the process is there.
I guess what I'm getting at here is that at a certain point it kind of just seems like the state is grabbing somebody's money.
Some people may be critical of that system, but the alternatives are that the bank or the company keeps the money.
Brenda says fundamentally, this is a way to look out for consumers, to safely take forgotten money out of companies hands and keep it in a place where people can get their money back easily.
I recommend to everyone that they should search at least once a year.
I typically suggest that people search either on their birthday or when they file their income taxes or maybe at the first of the year.
Again, if you take nothing else from this episode, it is that you should go and make sure you've not left abandoned money somewhere that is now in a state coffer.
I am forty dollars of living proof that you should do that.
And, in that regard, it is a good system.
I never would have found that money, it probably never would have found me.
On the other hand, a sheet clearly has some flaws.
We've learned some disconcerting things about this from Walter Schram's Amazon case.
Delaware has made some changes that theoretically would have helped someone like Walter.
The state actually does now require a letter to go out to a person before their property gets a sheeted But the state still deems a bank account abandoned after five years and investments abandoned after just three years Why the three years or why five years?
It just it seems pretty arbitrary.
It needs to be short enough so that companies aren't actually losing track of people and and then basically taking a windfall of that property or benefiting from that property over time.
So, it's trying to strike a balance.
Can I tell you specifically the story that I'm working on?
Okay. So for this piece, I talk to this guy...
We figured that Brenda wouldn't be able to talk about individual cases, but gave it a shot anyway.
Audrey told her about Walter and his Amazon bet.
It just doesn't quite make sense to me of why not checking your stock for a few years can carry such a heavy penalty.
I really can't respond to that.
There is no penalty.
The company has complied with the law.
The state complies with its laws.
If a person isn't exercising ownership over their account, they may have passed away, then what happens?
That's why states have unclean property laws.
As for Walter here's where his case stands.
Walter initially looked for an attorney to help him get the current value of his Amazon stock from Delaware more than $100 ,000.
A ton of money but apparently not enough for a lawyer to take the case on, Walter says.
I talked to the lawyer for two French investors who lost 13 million dollars from S sheet.
For cases like that, lawyers are interested.
For Walters, they are not.
So for now, Walter is stuck with the original deal from Delaware.
The state offered to pay him back the value of his stock from when they cashed it out in 2008, which is about $8 ,000.
I didn't cash that check.
I wrote them that I don't accept their offer.
I am sure the Amazon is growing, their stock will be 20, 30 times the value of today in 20 years.
So, it's going to be a multi -million dollar package and I'm sure then I'll find a lawyer who is willing to represent my children because it's worth his while.
So you're just going to wait until it's worth even more?
Yeah, sure. Sure, I'm gonna wait until this is worth two, three, four, five million dollars.
So that's the plan.
The hope is that at that point, it'll be worth it for a lawyer to take on the SRAM descendants' case and they'll get Delaware to settle, which does happen sometimes.
In the meantime, Walter has found a different investing approach. He's bought into Google and Facebook through a firm based in Europe, where they do not as sheet accounts.
Okay, so it has been about five years now since this episode originally ran, and there is a fair amount of news to share.
So let us begin with Walter Schramm, who did, in fact, find a lawyer and is now the lead plaintiff in a class action lawsuit, essentially against Delaware's Unclaimed Property Office.
Yes, that suit alleges that people like Walter were not given appropriate notice before their property or their stock in his case were seized and then liquidated.
Now that case is still ongoing, and since we first talked to Walter, the price of his now -long -ago liquidated Amazon stock has more than doubled.
And our final update, and I just want you to picture like a rainstorm of cash coming down for this one.
Since our episode originally ran Planet Money listeners like you have found over 38 ,000 dollars in unclaimed property at their various states and that is just those of you who got in touch to tell us about it.
So listen, if you go to your state's unclaimed property website and you find Lost Money, please do tell us about it.
We have a spreadsheet.
We You can email us, we are, planetmoney at npr .org, you can also tag us and show the world that you found money on all the social medias, that is, generally, at Planet Money.
And I mean, you know, listen, if you suddenly find yourself with some unexpected cash and a lot of gratitude for your favorite economics show, well, I will remind you that the best way to support our journalism at Planet Money is to become a regular NPR Plus supporter.
You can do that by going to plus .npr .org.
This is a way to help us stay independent and a way for you to get sponsor -free versions of our episodes.
And, right now, we've got a special series from the Planet Money archives that include a behind -the -scenes look at the time Planet Money bought a toxic asset that we named TOXI.
Lots of incredible details about how that project came together.
That is for our Planet Money Plus subscribers, and thank you so much, if you are already one of them.
Today's episode was produced originally by Alexey Horowitz -Gazi with editing from Nick Fountain.
The update today was produced by James Snead.
Our executive producer is Alex Goldmark.
Special thanks to David Knott, Ethan Miller, Randy Hoz, Wilson Barmer, Cindy Misley, and Bill Palmer.
I'm Adri Gwynn. I'm Kenny Malone.
This is NPR. Thanks for listening.
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