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Home » Investing » Tools » What You Should Do If You Lose Stock Certificates

What You Should Do If You Lose Stock Certificates

Updated: January 5, 2022 By Robert Farrington

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When I was little, I used to love looking at paper stock certificates — I thought that they were so pretty. As I got older, I liked to look at paper stock certificates because I really was looking at money! However, now, I find dealing with paper stock certificates to be a hassle. In fact, most investors agree, and many companies do not even offer paper stock certificates to their shareholders anymore. The reason? They are costly to produce and track.

And that's important — because what happens if you lose your stock certificates? I recently encountered this scenario and it was a bit scary. It was like losing a $20,000 check — something that you just don't want to do. Luckily, we found the missing stock certificates in my dad's safe deposit box, but not before I started looking into the process of what would happen if I lost my stock certificates.

If you ever find yourself in this situation, here's what you need to know (and do). Before we get started, the first thing you should know is that you shouldn't panic. Even if you don't have the physical shares, you still own the stock. In fact, if you don't plan on selling (ever), you will still receive your dividend payments and other notices like nothing is wrong. The only trouble arises if you ever do want to sell your shares — you need to sign over the stock certificates, just like you would endorse a check.

Table of Contents
Contact the Issuing Company
Contact the Transfer Agency
Prevention Tips to Expedite Replacement and Avoid This in the Future

Contact the Issuing Company

The first thing that you need to do is contact the company that issued the shares. You should contact the company's investor relations department, and ask which transfer agent they use to handle their stock certificates.

A transfer agent is a company that essentially is the record keeper of shareholders for the company. The transfer agent will know how many shares you have, the stock certificate numbers, and have all your contact information. Once you have the information for the transfer agent, it's time to contact them.

Contact the Transfer Agency

When you contact the transfer agency and report your share certificates missing, you'll have to go through several steps to get the shares replaced. When you first notify the transfer agent, the agency will place a "stop transfer" on the missing certificates to prevent others from cashing them. Think of this like a stop payment on a check. The transfer agency will then notify the Securities and Exchange Commission about the missing stock certificates as well.

In order for the transfer agency to process your stop transfer, you'll need to do the following:

  1. Provide an affidavit: You'll need to describe the lost certificates and the circumstances surrounding the loss. It could be as simple as I moved and lost the certificates, or it could be the result of theft or fraud. Make sure that you're as detailed as possible.
  2. Purchase an indemnity bond: You'll have to purchase an indemnity bond to protect the company and transfer agency in case the stock certificates are redeemed at a later date. Every transfer agency charges a different rate, but my transfer agent charged 3% of the value of the stock certificates, and I've read that the rates can range from 1%–5%.
  3. Pay a fee to reissue the certificates: Whenever you issue paper stock certificates, you'll pay a fee. My transfer agent charges $50 to issue the shares, but every transfer agent and brokerage is different. I've seen rates up to $500 to issue stock certificates.

Once you've provided the information and it's been verified, you'll have new shares issued to you.

Prevention Tips to Expedite Replacement and Avoid This in the Future

If you find yourself in this situation, that's rough. But there are ways to expedite replacement and also avoid this in the future.

One of the first things that you can do is make photocopies of any share certificates you own (front and back), and put the copies in a known location. You should always store your share certificates in a safe place, like a safe deposit box, but keep the photocopies in your office file cabinet. Then, if you lose your shares, you can reference the photocopies to get the process started. It's quicker if you provide the missing share certificate numbers, versus having the transfer company research the loss.

To avoid this in the future, just don't hold paper stock certificates! If you use an online broker, all of your shares are electronically held for you. If you currently hold paper stock certificates, you can simply go to the broker of your choice and deposit your paper shares into your account. Then, all of your shares will be held electronically and you don't have to worry about losing your stock certificates.

Don't know where to start? Check out our list of great online stock brokers: Best Online Stock Brokers

What are your thoughts about owning paper stock certificates? Have you ever lost them?

Editor's Note: Want to dive deeper into investing? Here are some articles The College Investor likes to promote:

  • Understanding the Mega Backdoor Roth IRA
  • The Ultimate Guide on When to Make Traditional IRA vs. Roth IRA Contributions
Robert Farrington
Robert Farrington

Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.

He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.

He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.

What You Should Do If You Lose Stock Certificates
Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.
Comment Policy: We invite readers to respond with questions or comments. Comments may be held for moderation and are subject to approval. Comments are solely the opinions of their authors'. The responses in the comments below are not provided or commissioned by any advertiser. Responses have not been reviewed, approved or otherwise endorsed by any company. It is not anyone's responsibility to ensure all posts and/or questions are answered.
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