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How Safe is Your Safe Deposit Box?

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How Safe is Your Safe Deposit Box?

A safe deposit box gets its name for a reason --- it’s supposed to protect your valuables. Well, don’t think it’s failproof. Just read the headlines to know what can happen.

A recent CBS report is just the latest to spotlight the mistakes banks can make with safe deposit boxes. According to CBS, three Bank of America customers said they were “blindsided” when the bank recently drilled and emptied their safe deposit boxes without their permission or required notice. This was not a harmless mistake. The customers said the bank lost or damaged tens of thousands of dollars of property that went missing from the boxes. To make matters worse, the customers said the bank drilled the boxed due to missing account information that the customers said the bank already had.

One of the customer’s nightmare doesn’t end there. According to the CBS story, one couple said that after drilling the box, the bank shipped their nearly $100,000 worth of jewelry and irreplaceable possessions to a holding center on the east coast. When they got they valuables back, they arrived in a UPS box. The bank’s rental agreement says it may ship safe deposit box contents uninsured. When the couple opened the box, they said they were horrified to discover that bank employees had removed their delicate jewelry from the individual protective boxes and silk bags, and thrown all the jewelry together. How’s that for customer service.

Such tales give cause for concern for sure. So, what are the rules? Turn to the Office of the Comptroller of the Currency for information. According to the OCC’s website, typically, banks use control systems to ensure that only authorized persons have access to safe deposit boxes. Banks want the safe deposit box renter to have access to and the ability to remove items from the box. The agency says that a bank may defend itself against a claim of unauthorized access or missing items by showing that its controls were followed.

while your bank account may be covered by the FDIC, safe deposit boxes are not

The two main controls are dual control and authorized signature. What is dual control? It means two people—usually a bank employee and the renter—are required to open the box. This should work as a safety net, as no one person can ever open the box and remove the contents. When the safe deposit account is opened, all those who are authorized to access the box sign the signature card. After that, the bank can only let those signers access the box. From then on, the bank records the signature of any individual allowed to enter the box. The OCC recommends dual control which may be required by law, whenever a safe deposit box is opened without the renter’s permission such as a court order, rental delinquency on the box, branch closure or a search warrant, for example. Generally, the rule, according to the OCC, when a safe deposit box is opened by force, at least two people must be present to inventory the box’s contents. The bank will keep the contents in the vault.

There’s more than the bank to worry about. “In addition to theft from bank break-ins, flood and fire put vital documents and valuables stored in ‘safe’ deposit boxes at risk, as well,” says Chris Wong, CEO of LifeSite, which helps families organize and access important information electronically in its secure digital safe deposit box, LifeSite Vault.

Know too, that while your bank account may be covered by the FDIC, safe deposit boxes are not insured by the FDIC, says Wong.

Speak up. You can file a complaint about your safe deposit box on the OCC’s website. Be aware, however, that safe deposit box complaints are a low priority for the agency.

Comments
gbtexas
gbtexas   |     |   Comment #1
Very much like the adage "Be careful who you trust" very clearly applies to organizations, and in this case banks. Not all banks are beyond reproach. We have all seen press about misdeeds of certain banks. The bank, it seems, that I've seen more of in this instance over the last several years is none other than Bank of America. I once had several accounts with them. I closed all of them many years ago. One reason was my growing concern about them, starting with the poor judgment of one of their previous CEOs. And now this startling revelation. Trust Bank of America? No longer. Not one centimeter's worth. So, be care what you trust.
hank
hank   |     |   Comment #2
Don't forget about all the phony accounts that Wells Fargo opened for its customers. And no one has gone to jail for that.
xxx
xxx   |     |   Comment #14
Apparently, identity theft is only illegal if another person does it. But wait, aren't corporations people now? Actually, it looks like they've got more rights that a human. Immunity from prosecution being one of them. Now we can add a sham legal system to our sham democracy.
jennifer
jennifer   |     |   Comment #3
I would never put my jewelry in a safe deposit box.
Sunil
Sunil   |     |   Comment #45
A safer option is to buy a large heavy safe demo Costco for about $ 1,000 & 'store' it in your basement. Anybody have a better solution, please post. I had a large BAC safe for several years and operated it one day to see a yellow sticky note "for drilling". The payment was automatically being charged yearly $ 225.
The staff had no explanation on why the disaster was in process.
Bozo
Bozo   |     |   Comment #4
Urban myth. My Mom had a safety deposit box with Bank of America in Leawood (KS) for years. No problems. My wife and I had a safety deposit box with World Savings in Lafayette (CA) for years, no problem. I would suspect folks are more likely to have their valuables burned in a house fire than lost from a safety deposit box.

I always joked with the branch manager in Leawood that the safety deposit boxes were so far below ground that they would obviously survive a nuclear attack. Whether the customers would survive, that was less clear.
Ann
Ann   |     |   Comment #6
I agree it's less risky overall than leaving the contents at home, but what happened to these unlucky people isn't a myth...
Martin
Martin   |     |   Comment #9
The LLoyds of London would not touch deposit boxes for insurance, that tells you how safe they are. You have been lucky so far, but do not ignore the fact that your valuables may disappear one day without warning.
DOA
DOA   |     |   Comment #32
About all I would be comfortable with Bank Of America holding for me would be my Monopoly money.
Dave
Dave   |     |   Comment #5
As the time-old adage goes. who will watch the watchman?
Bogie
Bogie   |     |   Comment #46
The same could apply to any scenario in life such as financial institutions, lawyers, doctors, guardians, etc., etc.

Then there is such a thing as paranoia.
Att
Att   |     |   Comment #7
With most financial documents like bonds and stocks now recorded electronically less need for a safety deposit box. Even paper savings bonds can be transferred and stored electronically and available via Treasury Direct. Non negotiable papers can be stored at home in a fire resistant box. Guess the boxes would be for physical assets such as metals or jewelry. The bank gave me a safety deposit box for free a while ago. Then they ended that and started charging a lot more for the box. I no longer have one. Storing valuables in a bank vault with alarms and requiring 2 keys to open is safer than being stored at home like Bozo infers. A lot more thefts out of homes than safety deposit boxes inside bank valuts.
dgdevil
dgdevil   |     |   Comment #13
"Fire resistant" and "theft-resistant" boxes for the home are rarely adequate. You really need to do your homework on such a purchase, and then again on the installation.
Bozo
Bozo   |     |   Comment #18
Att: even in this age of electronic gizmos, transferring stocks may require paper certificates. I recently went to transfer certain stocks in the family trust, and was required to surrender the paper certificates. Thankfully, my Mom placed these certificates in her safety-deposit box, so I didn't have to go through the complexity of ordering replacements.

While it gets complicated, most stock accounts will show the balance of "certificated shares". It is those certificated shares you might need to find in some safety-deposit box, or else order replacements (at a fee).
Att
Att   |     |   Comment #21
In my case I have no paper certificates or bonds. They are all in my brokerage account and can be traded easily.. I did have paper certificares from my employer stock years ago which I converted to electronic format so I wouldn't have to store paper or them getting lost or stolen. I'm so glad that I no longer have to worry about storing paper savings bonds that are now part of my Treasury direct account. My 84 year old mother also has all her stock in a brokerage account. No paper certificates to worry about. Also, I find it more than adequate to have my papers in a fire resistant box. To each their own.
Att
Att   |     |   Comment #22
Also, my mother has a trust and all the stocks electronically registered. No paper documents. As I stated originally most stocks and bonds are recorded electronically and I used the word "most". In your rate case you have stock certificates. You may want to look into converting those securities into a non paper format. Again, whatever floats your boat.
Ann
Ann   |     |   Comment #25
I don't think very many people still have paper stock certificates, though there's still a lot of unredeemed paper savings bonds out there. Fees for transactions involving paper stock certificates are typically an order of magnitude higher than electronic trades, as I recall.
Interested
Interested   |     |   Comment #8
A related concern: access to a box in the event of the death of a co-owner. Depending on state law the surviving co-owner may not have unfettered access to the box until the deceased co-owners estate has been inventoried in the course of probate
Bogey
Bogey   |     |   Comment #11
So what's the concern. Just another safeguard for the deceased co-owner's valuables from being stolen. That's a plus.

If the surviving co-owner is concerned about having access to his own valuables while waiting for the deceased's to be inventoried, rent your own safe deposit box.
Martin
Martin   |     |   Comment #10
Law enforcements, criminal investigators, IRS and many others can open a deposit box with a simple warrant (no court order needed) and you would find out about it after the box was raided.
That should be enough to open your eyes on how safe the deposit boxes are.
Bogey
Bogey   |     |   Comment #12
And how often does that scenario occur compared to a fire or theft in homes?
Anonymous
Anonymous   |     |   Comment #15
A governmental agency like the police or the IRS must seek a court order to open a safe deposit box -- cause must be shown and the order must be specific. That is why we have courts and judges. A warrant, such as a search warrant or an arrest warrant, is one type of court order. The only instance that I know of when a court order is not needed to open a safe deposit box is for probate purposes in certain states.
Martin
Martin   |     |   Comment #16
A search warrant is issued by a judge not a court, please comment on the facts only.
Anonymous
Anonymous   |     |   Comment #20
I’m an attorney and when someone states that the Fourth Amendment doesn’t apply (or apply fully) to safe deposit boxes then I guess I feel the need to speak up. You state that there is something called a “simple warrant” where no court order is needed – there is no such concept as that in the law. Then you say that a search warrant is issued by a judge not a court – I don’t see the distinction. A judge is a person who presides over a court. A court order (of which a search warrant is one type) is an official proclamation of the court issued by a judge. Perhaps you are suggesting that there is a difference because search warrants are typically issued by a judge outside of open court. That is not the case – the same requirements must be shown (probable cause that a crime was committed and that items connected to the crime are likely to be found at that place) and the same constitutional protections apply whether a judge issues a search warrant in open court, in his chambers or anywhere else.
Martin
Martin   |     |   Comment #23
#20, It shows how little effort you have made to get to the bottom of the safe deposit boxes's past and present rules.
The following is a small insert to rebuff your 4th amendment protection:

".................DHS writes to Banks:May inspect safe deposit boxes & seize contents w/ no warrants
U.S DEPARTMENT OF HOMELAND SECURITY HAS TOLD BANKS - IN WRITING - IT MAY INSPECT SAFE DEPOSIT BOXES WITHOUT WARRANT AND SIEZE ANY GOLD, SILVER, GUNS OR OTHER VALUABLES IT FINDS INSIDE THOSE BOXES!

According to in-house memos now circulating, the DHS has issued orders to banks across America which announce to them that "under the Patriot Act" the DHS has the absolute right to seize, without any warrant whatsoever, any and all customer bank accounts, to make "periodic and unannounced" visits to any bank to open and inspect the contents of "selected safe deposit boxes."

Further, the DHS "shall, at the discretion of the agent supervising the search, remove, photograph or seize as evidence" any of the following items "bar gold, gold coins, firearms of any kind unless manufactured prior to 1878, documents such as passports or foreign bank account records, pornography or any material that, in the opinion of the agent, shall be deemed of to be of a contraband nature."

DHS memos also state that banks are informed that any bank employee, on any level, that releases "improper" "classified DHS Security information" to any member of the public, to include the customers whose boxes have been clandestinely opened and inspected and "any other party, to include members of the media" and further "that the posting of any such information on the internet will be grounds for the immediate termination of the said employee or employees and their prosecution under the Patriot Act." Safety deposit box holders and depositors are not given advanced notice when failed banks shut their doors.

If people have their emergency money in a safe deposit box or an account in a bank that closes, they will not be allowed into the bank to get it out. They can knock on the door and beg to get in but the sheriff’s department or whoever is handling the closure will simply say “no” because they are just following orders. ....................."

You can find the above directly from DHS or in short version here:
https://gold-forum.kitco.com/showthread.php?75513-DHS-writes-to-Banks-May-inspect-safe-deposit-boxes-amp-seize-contents-w-no-warrants
111
111   |     |   Comment #17
Good article - both interesting and useful. It cannot be reported too many times, that a bank's FDIC insurance does not extend to the physical contents of a safe deposit box held at that same bank.
Bozo
Bozo   |     |   Comment #19
To: Poster "111"

Would not other insurance apply? Fidelity bonds generally cover employee malfeasance. I must say, I would lose more sleep over something not in a safety-deposit box than something within it. With the prevalence of security cams, and double-key entry (always a factor with safety-deposit boxes), worrying about safety-deposit boxes seems a stretch.
Martin
Martin   |     |   Comment #24
#19, Banned: Chase Bank Says You Can No Longer Store Cash or Precious Metals In Your Safe Deposit Box, April 22nd, 2015, also please see the above comment by #23.
Ann
Ann   |     |   Comment #26
The particular article Martin mentions appears on a few survivalist-type websites that most wouldn't view as reliable sources, but I found mainstream corroboration here.
Also of interest to this discussion, it mentions a company which specializes in safe deposit box insurance: https://safedepositboxinsurance.com/

http://www.times-standard.com/article/NJ/20161102/LOCAL1/161109963
How safe is your safe deposit box? Answer these questions
By H. Dennis Beaver
Posted: 11/02/16

...
Chicago-based CPA/Attorney Jerry Pluard hears these questions often. As President and Co-Founder of Safe Deposit Box Insurance Coverage, LLC (SDBIC) — the only company specializing in insuring contents of a safe deposit box — he has seen his share of unhappy faces of folks who have a safe deposit box, when he tells them:

“Contents of the box are not insured by the bank, credit union or FDIC in the event of theft, flood, fire, earthquake, or any other catastrophe under the terms of the box rental agreement. This no-liability policy is clearly stated in the rental agreement, yet many people do not take the time to read their contracts,” he points out.

“The FDIC insures customer deposits up to $250,000, but does not cover cash or any other valuables in a safe deposit box. Unless you purchase a separate rider requiring an appraisal and proof of ownership, Homeowners Insurance will offer some limited coverage — usually up to $1,000 — and typically will not insure cash or precious metals. Flood is generally excluded from coverage.”

In April, 2015 Chase bank informed customers they were “Not to store money, coin or currency unless it is of a collectible nature.” Suzanne Alexander, Chase spokesperson, stated, “We made the change because it is safer and more convenient to keep your money in a bank account, as it can accessed 24 hours a day at an ATM and is insured by the FDIC.”

We would just love to see how Chase plans on enforcing this prohibition unless their staff has X-ray vision.

Most lawyers advise keeping some cash in a safe deposit box for emergency purposes—or perhaps unused foreign currency from a trip. Pluard agrees, pointing out, “There is no federal or state law prohibiting cash in a safe deposit box. The bank’s rental agreement may frown on it, but they do not know what you are keeping in there.”
...
Bozo
Bozo   |     |   Comment #30
Ann, the prohibition on keeping cash in a safety deposit box (if it exists) is totally unenforceable. Having deposited (and withdrawn) items from a safety-deposit box over the years, the bank officer keeps a discrete distance from you when you open the box. You could have a basket full of Benjamins (i.e., $100 dollar bills) , plop them in the box (assuming it was big enough), and the bank officer would have no idea if you were depositing Benjamins or stock certificates.
Ann
Ann   |     |   Comment #35
I agree, as does the article I found. :-)
nash
nash   |     |   Comment #27
A few years ago, Bank of America gave my safe deposit box to another customer in their computer records. I had not visited the box for about 2 years. When I went to access my box, they were unable to locate it in their system and told me that I did not have a box. I still had both sets of keys to the box. After a couple of visits and persistence, they were able to locate the paperwork for the box and admitted to their error after providing them with an inventory of what was in the box and presenting both sets of keys. Fortunately, nothing had been touched and my valuables were all accounted for. Now I try to go visit at least every year if not more frequently.
Bogey
Bogey   |     |   Comment #28
Appears it was a mix up in record keeping alone, rather than a transfer of physical ownership of the actual safe deposit box. Particularly if the keys in your possession still worked.

You should always keep a copy of the paperwork (agreement) in your possession. Would have helped to remedy the situation much quicker. How often do you pay the rent for your safe deposit box? Any bank I have ever rented a safe deposit box from always billed me annually.
hank
hank   |     |   Comment #29
I didn't think about that at the time so I don't have the renta paperwork. The bank told me they gave me 2 sets of keys when I opened it but I don't know what happened to the other set.
Bogey
Bogey   |     |   Comment #31
2 sets of keys? We were always given 2 keys.
Bozo
Bozo   |     |   Comment #33
Yup, two keys is standard. Before she died, my Mom kept one, and gave the other to me. I was also on the signature card for access to the box.
Martin
Martin   |     |   Comment #34
Bozo, Yeah right, the keys will save you from the DHS and the patriot act, the Government owns everything you put in that box, it is called loot box by the FEDs and they assume only the criminals stash cash, diamonds, stock certificates and passports to flee the country in a moment notice.
You would have a difficult problem explaining to a judge the "LOOT" is yours if DHS ever empties your box.
Bozo
Bozo   |     |   Comment #37
Martin, I seriously doubt DHS has an interest in safety-deposit boxes owned by little old ladies in Leawood, Kansas, who happen to give that extra key to a son.

As for the phrase "loot box", that's a first for me. Perhaps I live in a parallel universe, but I've never seen (or heard of) DHS agents swarming a bank to break into safety-deposit boxes without cause. Last I checked, a warrant was required, issued by a Judge, on probable cause.
Martin
Martin   |     |   Comment #38
Bozo, few examples:
http://articles.chicagotribune.com/1985-03-04/news/8501120674_1_safe-deposit-vault-federal-bank

http://www.appraisers.org/all-about-appraisers-and-appraisals/consumer-library/article/2013/06/10/how-safe-is-your-safe-deposit-box-
http://www.internationalman.com/articles/the-end-of-the-safe-deposit-box-for-wealth-storage

http://www.historylink.org/File/8110

I have a d-base of over 400 such cases where the deposit boxes have be raided. Now, when you add the DHS legal rights to open any such box and confiscate anything they want without warrant, I can assume the criminals will pretend to be DHS agents and robe anything in those boxes.
The deposit boxes are on the Bank's private property and you already agreed not to hold them accountable for theft or loss and your only safety feature is a prayer that you deposit box will somehow be spared from perils.
pops17
pops17   |     |   Comment #39
Your comment would make sense if there ever was an incident where criminals successfully impersonated federal law enforcement agents and raided boxes. It has never happened,my friend.
Bozo
Bozo   |     |   Comment #40
Martin, you seem to be caught up in alt-right conspiracy theories. Banks are not part of a "deep state" conspiracy. Banks are just, well, banks. Safety-deposit boxes are, well, just safety deposit boxes. If you want to go off in the woods and build a log cabin, and bury your valuables under a tree, by all means, do so. Just remember to create a map for your heirs.
Bogey
Bogey   |     |   Comment #41
And lock the map up in a band safety deposit box.
Bogey
Bogey   |     |   Comment #42
Meant to print bank, not band safety deposit box. (no way to edit a post)
pops17
pops17   |     |   Comment #36
Have secured valuables for many years in safe deposit boxes with no problems. The BOA story, while unfortunate for those affected, has no relevance to the great majority of people with boxes. Just recently the main branch of my local Capital One bank closed down. Letters were sent to all box holders informing them of coming closure and the date by which all boxes had to be emptied. The letter stated if not emptied all contents would be catalogued and shipped off, as in the BOA story, to a repository site. Most boxes were cleared out within 2 weeks of the notice.
Kevin
Kevin   |     |   Comment #43
My wife's safe deposit box was drilled out and sent away WITHOUT a notice and because of a past due rental fee. The bank is JP Morgan chase. She needed her passport from the box for traveling but can not get the contents back for 2 weeks. She is at that branch daily. No notice, verbal or in writing. I wonder if this is legal let alone ethical.
Nothing
Nothing   |     |   Comment #44
Talk to ethics officer and your attorney