Every year, millions of dollars in unclaimed checks go unreconciled, including payroll, vendor payments, dividends, and refunds. For financial institutions and corporations, these uncashed payments represent more than administrative oversight. They can quickly become a significant compliance risk if not managed within state escheatment timelines.
What Are Unclaimed Checks?
An unclaimed check (or uncashed check) is a payment that has been issued but not deposited or cashed by the recipient within a specific period of time. After this dormancy period expires, typically one to three years depending on the state, the funds are considered abandoned and must be reported and remitted to the state as unclaimed property.
Common examples include:
- Payroll checks not cashed by former employees
- Vendor or supplier payments never deposited
- Refund or rebate checks mailed but unclaimed
- Dividend or interest checks returned as undeliverable
Why Unclaimed Checks Create Compliance Risk
Uncashed checks may seem minor, but collectively they can pose serious compliance challenges. Each state enforces its own unclaimed property laws that dictate:
- How long a check can remain outstanding before it is considered unclaimed
- The type and timing of due diligence letters required
- When and how funds must be reported and remitted
Failing to follow these requirements can result in penalties, interest charges, and audit exposure, especially for organizations that issue large volumes of payments.
The Complexity of Managing Dormant Payments
Because dormancy periods and reporting deadlines differ across states (see our guide for a full breakdown of state laws), organizations operating in multiple jurisdictions often find it challenging to stay fully accurate and compliant. For example, a payroll check in Texas may become reportable after one year, while the same check in California could have a different dormancy rule entirely.
Tracking these differences manually is time-consuming and prone to error. Many institutions rely on outdated spreadsheets or siloed accounting systems that make it difficult to identify and reconcile outstanding payments on time.
Automating Compliance with Eisen
Eisen simplifies unclaimed property management by helping organizations:
- Identify uncashed checks and flag those approaching dormancy
- Automate due diligence outreach with compliant templates and timelines
- Generate state-specific reports in NAUPA format
- Maintain comprehensive audit trails to demonstrate compliance
With Eisen, teams gain visibility and control across all payment types, reducing risk, streamlining workflows, and ensuring compliance with confidence.
Why It’s About More Than Compliance
Every unclaimed check represents a person or business that has not received what they are owed. Taking a proactive, automated approach not only satisfies regulatory requirements but also protects relationships and strengthens trust in your organization’s integrity.
When compliance is handled seamlessly, you can focus on what matters most: delivering real impact for your customers and stakeholders.
The Bottom Line
Managing unclaimed checks effectively is both a regulatory necessity and an opportunity to reinforce reliability and care. With Eisen’s automated escheatment solutions, you can stay compliant, minimize risk, and ensure that every dollar finds its rightful place.
Learn more about how Eisen helps organizations manage unclaimed checks with confidence by exploring our escheatment services.
