Nov/Dec 2009

State News: August 2009

 

 

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States Sell Forgotten Loot on eBay

By Mikel Chavers, CSG Associate Editor

 

Bidders on some fancy whale’s teeth in an eBay auction could be adding cash to Rhode Island’s state budget. That’s because this December, the state is auctioning off its unclaimed property—stuff left for years in forgotten and abandoned bank safety deposit boxes—on eBay.
Rhode Island—along with states including Texas, who pioneered the approach, and Wisconsin—is using the Internet auction giant as a platform to get the highest bidder for forgotten treasures the state takes on when people just plain forget about them.
The scrimshaw pieces, or decorative antiques made from whale’s teeth, are just some of the more interesting unclaimed property items up for bid in Rhode Island in an eBay auction that started Monday and ends Jan. 11. In fact, the three pieces of scrimshaw have an estimated value of $4,000, according to David Salvatore, business services and unclaimed property manager for the state.
There are also some rare coins, some fine jewelry and an 18-karat gold Tiffany chalice valued at an estimated $12,000, Salvatore said.
The state will add new items almost every day for the next three weeks, Salvatore said. The auction will have more than 100 listings with a total estimated value of more than $50,000.
“We’re leveraging the new technology,” Salvatore said. “We think it’s first a quicker way to generate those revenues.”
So if no one claims the property, Rhode Island keeps the cash.
But every state has different laws governing what to do with unclaimed property. States have auctioned items that are left in bank safety deposit boxes for years—but not until they have been left for many years by the actual owners or heirs.
In Rhode Island, when the banks turn the lost or forgotten loot over to the state, the state holds the unclaimed property for a three-year period. That’s by state law. The state works to reunite the stuff with lost owners and advertises the property in the local newspaper, The Providence Journal, and lists the unclaimed property owners online.
But, if no one comes forward the state sells the property at auction. Now in a handful of states, it’s sold on eBay.
“Now, anyone in the world can bid for these items on eBay, which dramatically elevates the visibility of the state’s unclaimed property, while also increasing the amount of bids and monetary level of bidding,” Rhode Island Treasurer Frank T. Caprio said in a press release announcing the eBay auction. “That’s important because money raised from the online auction goes back into the state’s coffers.”
Rhode Island’s December auction currently has 10 active listings which together have nearly $1,800 in bidding so far. But hurry, the scrimshaw auction ends at 9 p.m. Eastern time Monday.
According to Salvatore, revenue generated from the eBay auctions benefits the state’s general fund. The general fund takes 25 percent of the unclaimed property account, he said. But that’s not to say the rightful owners won’t ever get what’s theirs back. If the property owner or heir comes forward, they’ll be paid the value of the property if it’s already been auctioned.
“We’ve paid claims dating back to the 1960s,” Salvatore said. “If they don’t ever come forward, it is generated revenue for the state.”
 Wisconsin has been auctioning off unclaimed property on eBay for two years; Texas piloted the idea in 1999. Wisconsin started holding the eBay auctions once a quarter but is now hosting them every month. The state’s December eBay unclaimed property auction garnered $6,740 for the 22 listings in the auction.
But the state doesn’t get that money, according to Ron Giordan, spokesman for the state treasurer’s office.
“That money will be dispersed into the Unclaimed Property Account under each person’s name whose property was sold,” Giordan said. “If they or their heirs ever claim the property, they will get the value of that property based on what it sold for at the auction.”
For example, one of the lots was 14k gold rings—four of the rings were gold, three others were not. Someone purchased the lot on eBay for $260. That’s just about where the appraiser totaled the lot, Giordan said.
“That money will be held for the rightful owners to claim ... held indefinitely,” he said. “The state can’t use it to fix its budget problems.”
But every state handles the money differently. "Many states do use some of the revenue for the general fund but yes, all states but a couple keep the account open until the rightful owner is found. And in those states a claim can be made for 10 to 20 years," said David Milby with the National Association of Unclaimed Property Administrators.
In Wisconsin, the state can cash in on the interest from the money being held, Giordan said. And when there’s millions in the unclaimed property account, that’s a lot of interest. Those interest earnings in Wisconsin benefit the state’s public school libraries, for example.
“EBay is the best way to get fair market value for these items,” Giordan said.
To find out more about unclaimed property in the states, visit the National Association of Unclaimed Property Administrators, an affiliate of The Council of State Governments. 

 

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