How to Avoid Unclaimed Refund Scams

The Scale of the Problem

Unclaimed refund scams have exploded in recent years as public awareness of unclaimed property has grown. The Better Business Bureau reports that consumers lost over $50 million to unclaimed money scams in 2023 alone. These scams are particularly cruel because they target people who are legitimately trying to recover money that belongs to them.

Scammers have several advantages that make these frauds effective:

• Unclaimed property databases are public, giving scammers access to real information about your potential funds
• The legitimate process can be complex, making fraudulent "help" seem valuable
• People are naturally excited about finding unclaimed money, making them more susceptible to quick decisions
• The amounts involved can be substantial, making upfront fees seem reasonable by comparison

Common Scam Tactics

The "Asset Recovery" Company Scam

This is the most common and sophisticated unclaimed refund scam. Here's how it typically works:

The Fake Government Agency Scam

Scammers may impersonate government officials to add credibility to their fraud:

• Claiming to be from the "U.S. Treasury Unclaimed Money Division" (which doesn't exist)
• Using official-sounding language and fake badge numbers
• Creating fake websites that mimic government sites
• Demanding immediate payment of "processing fees" or "taxes" before releasing funds
• Threatening legal action if you don't comply quickly

The Advance Fee Scam

This classic fraud has been adapted for unclaimed money:

• Contact claiming you have a large unclaimed inheritance or settlement
• Request for upfront fees to "process" the claim
• Promises of huge payouts (often $100,000+)
• Use of official-looking but fake documents
• Requests for banking information to "deposit" the funds

The Identity Theft Angle

Some scammers use unclaimed property searches as a way to harvest personal information:

• Fake search websites that collect your personal information
• Requests for Social Security numbers, bank account information, or passwords
• Phishing emails that appear to be from legitimate unclaimed property offices
• Fake claim forms that collect sensitive personal data

How to Protect Yourself

Verify, Don't Trust

If someone contacts you about unclaimed money:

1. Never provide personal information over the phone or in response to unsolicited contact
2. Independently verify any claims by searching official government databases yourself
3. Check the company's credentials with state licensing boards and the Better Business Bureau
4. Research the company online - look for complaints and reviews
5. Ask for detailed information in writing before considering any services

Use Only Official Sources

Stick to these legitimate, free sources for searching and claiming unclaimed money:

Government Sources:

• State unclaimed property websites: Usually found at [state]treasurer.gov or similar
• IRS.gov: For federal tax refunds
• PBGC.gov: For pension benefits
• FTC.gov: For class action settlement information

Verification Tips:

• Look for .gov web addresses
• Verify SSL certificates (https:// and lock icon)
• Cross-reference information across multiple official sources
• Contact agencies directly using phone numbers from their official websites

Recognize Legitimate vs. Fraudulent Requests

What to Do If You're Contacted

Step 1: Don't Panic or Get Excited

Take time to think clearly. Legitimate unclaimed money doesn't have urgent deadlines (except for specific types like tax refunds). If someone is pressuring you to act immediately, it's likely a scam.

Step 2: Gather Information

If someone contacts you about unclaimed money, ask for:

• The exact name and source of the unclaimed property
• The specific amount (be wary if they're vague about this)
• The holder of the funds (bank, insurance company, government agency)
• Their company's full legal name and address
• Their licensing information (if required in your state)

Step 3: Verify Independently

Before responding to any contact about unclaimed money:

1. Search official state databases yourself using the information provided
2. Contact the alleged holder of the funds directly
3. Research the company contacting you
4. Check with state regulatory agencies about the company's legitimacy

Step 4: Claim It Yourself

If you verify that unclaimed money exists in your name, claim it yourself through official channels. You don't need to pay anyone to do this for you.

Legitimate Heir Search Services

While most unclaimed property scams should be avoided, there are some legitimate heir search services (also called heir hunters or forensic genealogists). These professionals typically:

• Contact potential heirs of deceased persons about unclaimed estates
• Charge reasonable percentages (typically 10-20% of recovered funds)
• Work on a contingency basis (no upfront fees)
• Provide detailed documentation about the estate and their research
• Are licensed and bonded in states that require it
• Allow you time to consider their offer and get independent advice

Red Flags Checklist

Be extremely cautious if you encounter any of these warning signs:

What to Do If You've Been Scammed

If you believe you've fallen victim to an unclaimed refund scam:

Immediate Steps:

1. Stop all communication with the suspected scammers
2. Document everything: Save emails, letters, contracts, and records of payments
3. Contact your bank if you provided financial information or made payments
4. Monitor your credit reports for signs of identity theft
5. Change passwords if you provided any online credentials

Report the Scam:

• Federal Trade Commission: ReportFraud.ftc.gov
• Internet Crime Complaint Center: IC3.gov
• Your state's Attorney General office
• Local police department
• Better Business Bureau: BBB.org

Try to Recover Your Money:

• Contact your credit card company or bank about fraudulent charges
• File a complaint with your state's consumer protection agency
• Consider consulting with an attorney if large amounts are involved

Best Practices for Safe Searching

Create a Systematic Search Plan

Instead of relying on others to find your unclaimed money, create your own annual search routine:

1. January: Search all state databases where you've lived
2. April: Check IRS records during tax season
3. July: Review employer and pension databases
4. October: Search for insurance and investment-related funds

Keep Good Records

• Maintain a list of all addresses where you've lived
• Keep records of former employers and their contact information
• Save documentation of financial accounts, insurance policies, and investments
• Document your searches and any claims you file

Stay Informed

• Subscribe to alerts from your state's unclaimed property office
• Follow FTC and other consumer protection agencies for scam alerts
• Keep up with changes in unclaimed property laws and procedures

The Bottom Line

The best protection against unclaimed refund scams is knowledge and proactive searching. By understanding how scams work and using only official sources, you can safely find and claim any money that's rightfully yours without falling victim to fraud.

Remember these key principles:

• You never need to pay upfront fees to search for or claim your own unclaimed money
• Legitimate sources don't contact you first - you find and claim the money yourself
• Most unclaimed property has no urgent deadline - don't let anyone pressure you to act immediately
• When in doubt, verify independently using official government sources

Your unclaimed money will wait for you - there's no need to rush or pay someone else to claim what's already yours. Take your time, do your research, and always use official channels.