I found my cousin nearly $30,000 in ‘lost’ money. Then I discovered who was holding it
A few months ago, I was poking around Colorado’s unclaimed property database when I spotted a familiar name: my cousin Jonathan.
The listing was maddeningly vague. It showed his name, an old address and one slippery little phrase: "over $250."
That could mean $251. It could mean $2,500.
Or, as it turned out, it could mean nearly $30,000.
I sent the listing to Jonathan and forgot about it. Weeks later, he called me stunned but happy. The money was real. It was a forgotten tax refund that had been sitting in state custody for years.
His first question was the obvious one: How could I not have known about this?
The answer should make every American angry.
Because the system is not really built to make this money easy to find or easy to get back.
That one phone call sent me down a rabbit hole. I started digging through state records, audits, government databases and public documents. What I found was not some cute local-news story about forgotten cash.
It was what amounts to a national scandal hiding in plain sight.
CONDUENT DATA BREACH HITS MILLIONS ACROSS MULTIPLE STATES
Across America, state governments are sitting on more than $100 billion in unclaimed money. That includes forgotten bank accounts, old paychecks, uncashed tax refunds, insurance payouts, unused gift cards, abandoned securities, utility deposits and money owed to dead relatives whose heirs never knew it existed.
New York alone is holding more than $20 billion. California has about $15 billion. Texas is sitting on about $10 billion.
This is not government money. It is your money. My cousin’s money. Your parents’ money. Your dead grandmother’s money. Your old employer’s money. Your forgotten tax refund.
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The government calls it "unclaimed property."
I call it what it is: a tax on forgetfulness.
And states love it.
Officially, these programs exist to protect consumers. The idea sounds reasonable enough. If a bank, insurance company or corporation owes you money and cannot find you, the money eventually goes to the state, which is supposed to safeguard it until you claim it.
That is the theory.
The reality is much uglier.
Once the money lands in state custody, it becomes a quiet source of cash flow. States use it to plug budget holes, fund programs and make their books look better. They get to hold private money, earn interest on it in many cases, and spend large portions of it while waiting for people to come forward.
But most people never come forward because they have no idea the money exists.
That is the trick.
This is one of the sneakiest ways governments make ends meet. No tax increase. No angry voters. No ugly campaign ad. No bill in the mail.
Just take custody of money people lost track of, make the search process confusing, make the claim process annoying and count on millions of people never showing up.
In Delaware, unclaimed property has become one of the state’s largest revenue sources. In Virginia, lost money helps fund teacher pensions, literacy programs and police. Connecticut uses it to help finance public election campaigns. Ohio officials have even looked at using unclaimed property money to help pay for a domed stadium for the Cleveland Browns.
Think about that.
Money that belongs to ordinary people can end up helping politicians, pension funds, police budgets and football stadium dreams, all while the rightful owners are left in the dark.
If a private bank did this, regulators would be kicking down the door.
When states do it, they call it public finance.
And the games start before you even file a claim.
Many states refuse to show the exact amount of money owed. Instead, they use vague labels like "over $250." That was the label on my cousin’s claim. It made a nearly $30,000 tax refund look like a minor errand.
That is not a small detail. It changes behavior.
If you think a claim might be worth $12, you may ignore it. If you know it is worth $12,000, you will move heaven and earth to get it.
States know this.
Some states go even further. New Jersey does not publicly list claims below $100, even though those small claims add up to hundreds of millions of dollars. Michigan has kept claims under $50 out of public view. In North Dakota, a state audit found that searches for claims worth $10,000 or more could return "no results found," even though such claims existed.
Let that sink in.
You could search for your money, be told there are "no results," and still have thousands of dollars sitting in government custody.
Then there is the paperwork.
Even after people find their money, getting it back can be a bureaucratic obstacle course. Some claims require notarized forms, mailed documents, death certificates, probate records, old IDs, proof of address and layers of paperwork that feel designed to make people give up.
Yes, states need to prevent fraud. Nobody wants scammers draining legitimate claims.
But there is a difference between protecting people and exhausting them.
Every extra form, every vague database entry, every missing dollar amount, every mailed document, every notarization requirement increases the chance that someone walks away.
And when they walk away, the state keeps the money longer.
That is the incentive problem at the heart of the whole system.
The harder the money is to claim, the longer it stays with the government. The longer it stays with the government, the more useful it becomes. The more useful it becomes, the less eager politicians are to fix the system.
This is why the happy TV segments like ABC’s "Show Me The Money" bother me.
You have seen them. An anchor announces that a viewer has found $500. A state treasurer, or one of his minions, beams for the camera. Everyone celebrates the government for giving someone their money back.
But that is like praising a man who borrowed $100, returned $3, and asked for a medal.
New York brags that it returns millions of dollars a day. What it mentions less often is that it still holds more than $20 billion. Nationally, states return only a small fraction of what they hold each year, while the total pile keeps growing.
That is not success. That is failure with good public relations.
And it gets worse.
Some states keep the interest earned on your money. California, for example, charges companies steep penalties if they fail to turn over unclaimed money on time, but pays rightful owners no interest when the state holds their money for years.
So, the state can punish companies for being late, hold your money, earn from it and then give you back only the original amount.
Nice work if you can get it.
This is not some theoretical consumer issue. It hits people who can least afford it.
People who move often. Retirees. Families handling estates. Workers who changed jobs. People who lost a parent. People who had medical bills, old insurance policies, forgotten refunds or closed bank accounts.
The average claim is often meaningful. Some claims are small, but others are enormous. In 2022, Illinois agreed to pay $11 million to the heirs of a Chicago man named Joseph Stancak, who died without a will.
The lesson is obvious: the money is real.
My cousin’s nearly $30,000 was real.
But the system depends on people assuming it is not worth checking.
That is why reform is finally getting attention. Massachusetts Democrat Sen. Elizabeth Warren has demanded answers from state treasurers. Members of Congress have introduced reform legislation. Hearings may be coming.
Good.
But the fix does not require a moonshot. It requires basic honesty.
States should publish exact dollar amounts. They should list every claim, even small ones. They should stop hiding behind vague ranges. They should use tax records and other government databases to automatically match people with their money. They should make claims simple and digital. They should pay interest when they earn interest. And they should measure success by how much money they return, not how much they hoard.
Most importantly, states should stop pretending this is free money.
It is not.
A forgotten tax refund is not a budget tool. A widow’s insurance payout is not a slush fund. A dead man’s bank account is not stadium financing. A worker’s old paycheck is not government revenue.
It is private property.
My cousin was lucky. I happened to search. I happened to recognize his name. He happened to follow through. A vague "over $250" listing turned into nearly $30,000.
But luck should not be the system.
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The government says it is holding this money for us.
Fine.
Then give it back.
Because unclaimed does not mean unwanted. And forgotten does not mean forfeited.
