Comptroller to ‘Slow Roll’ Returning Lost Money to New Yorkers

A number of states already proactively send out payments in much larger amounts than New York currently does. New York Focus contacted eight of them. The seven states that responded all said that fraud has not been a major problem.

Ron Lizzi, an unofficial watchdog on unclaimed funds whose advocacy has resulted in several states speeding up returns, told New York Focus that the “best way to prevent fraud is to automatically return money when possible.”

New York currently allows anyone to see online who’s owed unclaimed funds, which stem from sources like inactive bank accounts, uncashed checks, and security deposits. That system can invite fraud, said Lizzi, who argued that if the state knows the identity of a property’s owner, “automatically sending the money to that owner immediately makes fraud impossible.”

DiNapoli’s office disagreed that the current system invites fraud. The comptroller’s office is “careful to confirm rightful ownership to ensure that the money goes to the legitimate owner,” a DiNapoli spokesperson said.

To access unclaimed funds, New Yorkers generally need to fill out an online form with DiNapoli’s office. But many don’t know they’re owed money in the first place. A new state law, which DiNapoli championed, allows him to send out checks without individuals needing to apply. In a 2025 test run, DiNapoli’s office is only automatically sending out checks to people who have recently lost money, and only in amounts up to $250. It’s unclear if he will increase the threshold past $250 next year, or automatically send checks to older accounts that comprise the vast majority of the $20 billion.

“We’ve had a good rate of appropriate recovery of these funds,” DiNapoli told the Capitol Pressroom.

But the amount of money New York owes has nearly tripled since he took office in 2007. Last fiscal year, his office returned 2.6 percent of outstanding funds — significantly less than states that make heavier use of automatic returns.

States that automatically send out large checks told New York Focus that they haven’t seen significant fraud.

Illinois’s program “has not experienced significant fraud,” North Carolina has found that “fraud associated with these higher-dollar payments has not been an issue,” and West Virginia is aware of “no instances of fraud,” spokespeople at each state treasurer’s office said. All three states proactively send checks up to $5,000.

Connecticut and Rhode Island, which sends checks up to $2,500, said they weren’t aware of any incidents of fraud, either.

Louisiana has “not identified any problems,” according to a spokesperson for the treasurer’s office. As of 2018, Louisiana sent out checks up to $1,500; the office does not publicly discuss its current threshold amount, the spokesperson said.

The only state that described issues with automatic returns was Utah, which paused its program not because of fraud but because of returned mail.

“Many checks were returned as undeliverable or caused confusion among recipients who didn’t expect them, significantly increasing call volume and straining available resources,” explained Brittany Griffin, policy and communications deputy at the Utah State Treasurer’s office. The office is now working on legislation that would give it access to email addresses on tax returns, enabling faster and more reliable outreach and, down the line, potential electronic payments.

Five of those seven states either allow their tax departments to share physical addresses from tax returns with the state treasurer for purposes of returning money, or allow the tax regulator to confirm address data shared by the treasurer.

It’s not currently legal in New York for DiNapoli’s office to obtain such data from the Department of Taxation and Finance, making it harder for DiNapoli to verify addresses.

Asked whether DiNapoli’s office would support legislation allowing such access, a spokesperson said it was having “conversations about” and is interested in “any efforts or legislation that would help us return money to its rightful owners.”

Although other states told New York Focus that higher check thresholds had not led to significant fraud, DiNapoli’s office cautioned against comparing them with New York, citing its size.

“We processed nearly 700,000 claims, about 2,000 a day in the last state fiscal [year], and we’re returning an average of $2 million a day,” said DiNapoli spokesperson Matt Sweeney. “We deal with a very high volume. Some states have significantly smaller programs, so the consequences of error are proportionately smaller.”