SAN DIEGO -- The holidays are here and many of us are cleaning out our closets, drawers and junk spaces to make room for the new items that may be entering our lives, gifts from our loved ones. It’s a chore for most, but for some it can lead to a pleasant surprise.

Two years ago, San Diego resident George was cleaning out an old desk drawer when he came across a check.

“ I found a cashier’s check for over $32,000 made out to me as the balance of a Discover Financial Services CD account, dated Sept. 15, 1995.”

According to George, he was very busy as a consultant at that time and had made many deposits to a number of banks and accounts. He tells our ITeam that it is possible that he just forgot to cash it.

George went straight to his local bank. But they wouldn't cash the check. Because of the 10-year-old issue date, they wanted to verify its validity with the bank that issued it. That bank is Greenwood Trust Company out of Delaware.

George was told by Greenwood that the funds for his Discover Financial Services CD account were sent to California’s Unclaimed Property Division. He checked with the California Controller, but there was no record of any funds under his name. George then asked Discover Financial Services to find out what happened to his money. They searched their records. On June 22, 2006 they sent him this response:

“...cashier checks that are not negotiated escheat to the applicable state and are not retained on our books. We have found no record to indicate that the proceeds of the check at issue were escheated; therefore, we can only conclude that the check was reissued to you. Had you contacted us earlier, we would have been able to reproduce a copy of the reissued check. However, because the original check was dated September 15, 1995, it is likely that the loss was immediately reported (especially considering the size of the check) and a replacement check issued as the date on the check is 1995, over ten years ago. As previously explained to you, any records related to this Account would not be retained for ten years and therefore are no longer retrievable…… At this time we consider this matter to be closed.”

That same day, George contacted the ITeam.

“I need some help in getting answers to questions that might indicate there is potential for fraud, and I might not be the only customer involved. I physically have what appears to be a valid check by any measure of standards. I feel the burden of proof regarding its invalidity is up to Discover Financial Services.”

We contacted the state of Delaware Office of the State Banking Commissioner. They regulate Greenwood Trust. Banking Commissioner, Robert Glen advised us to have George file a complaint with his office. George did so on April 4, 2007.

In June 2007, the ITeam contacted the Commissioner’s Office to make sure George's case was moving forward. We were told that the case was on the right track. Ms. Carole Hoffecker of the Compliance Staff told us they would be asking Greenwood Trust/ Discover Financial Services, “Where’s the money?” According to Ms. Hoffecker, the money had to be accounted for.

By Oct. 25, 2007 there was still no response from the banking commissioner regarding George's case. It had been almost 7 months. We sent the commissioner an email pointing this out. Two days later, on Oct. 29, 2007, George finally got his response. Compliance Administrator Carol Kirby wrote:

“Please be advised that our office has concluded its investigation into your complaint against Greenwood Trust Company/ Discover Financial Services...

While I am certainly sympathetic to your situation I can assure you that Discover has expended enormous resources in an effort to research and resolve this matter. The bank is in full compliance with both State and Federal laws with regard to their handling of your matter. I believe the bank’s letter covers the issue in this matter thoroughly so I see no need to restate them here.”

We asked Glen to respond to this case. He stated in a voicemail to our office that he is not at liberty to share the details of the case with us. Funny thing is, no one from his office shared the details of the case with George either.

We emailed the Delaware state banking commissioner’s compliance staff on Nov. 7th , asking them to please cite the specific laws – state and federal - that allow Discover Financial Services to consider this matter closed and George's check unable to be cashed. We have not received a response to this request even though their Web site boasts, “Members of the compliance staff are well versed in state banking laws and state and federal banking regulations.”

We put in one last call to Glen on Nov. 27, 2007. He has not responded to our call.

So where does this leave George?

Charles L. Williams is the president of Fidelity Equity Alliance out of Houston, Texas. He is also an expert witness in litigation on banking and related matters throughout the United States. He’s worked in banking for 23 years, 10 of those as a bank president. We asked him for his advice.

“This is a dispute between the account holder and the bank and really the only way to resolve it is through the court system.”

Williams says the problem here is the amount of time that has passed.

Regulations regarding record retention requirements among financial institutions vary by state. We found that the state of Delaware gives the State Banking Commissioner the authority to set these regulations. They require Delaware financial institutions to maintain escheat records for only one year. Certified checks, activity register, money orders, official checks are kept for six years and closed account reports for one year.

We checked California’s record retention regulations. Alana Golden, public information officer for the Department of Financial Institutions, says there are none.

Our expert, Charles L. Williams, said he’s seen George's situation happen to others. In the 80s, a Mexican National purchased two $100,000 CDs from Bank One in Houston. More than 10 years later he returned to claim his money. According to Williams, the bank told him he was out of luck due to the fact that they no longer had any record of the account. The bank customer got a lawyer and ultimately settled with the bank, out of court.

Williams said that, generally, cases of this nature are settled and never make it to trial. But the road to a settlement can be a very expensive one and in this case, the amount involved may not cover the cost of the fight.

What Can You Do?

Cash your checks immediately. The California Department of Financial Institutions says checks usually expire between 180-240 days from the issue date. But if you forget to claim your money, you may be able to find it with the State Controller's Office. The Controller's Spokesman, Garin Casaleggio, says financial institutions must report your unclaimed property to the state if they have had no contact with you after a period of three years.

And locating your unclaimed money got easier this year. New legislation requires, and makes it possible, for the California Controller to attempt to notify unclaimed property owners of $50 or more of their property prior to the state even receiving it. They’ll tell owners who has their money and when it will be sent to the state. About 800,000 unclaimed property owners are reported to the state each year. There are 8.7 million property owners whose properties have been escheated in the past.

The California Controller’s office is not giving up on George. They are taking another look at their records as well as contacting the state of Delaware in an effort to find George's money. We’ll let you know what happens.