I'm Rick Kahler, thanks for joining me.
Well over the years I've routinely
recommended that people use a safe deposit box
at a bank to store valuable papers and small assets.
Valuable papers would include documents like
wills, trust documents, ethical wills, and especially
unrecorded deeds, not recommended.
A valuable asset would include diamonds,
gemstones, jewelry, gold bullion, small collectibles
like rare coin, stamps, and trading cards.
The physical protection of a bank vault
plus a system of access that requires
two keys, kept by the customer and one by the bank,
would seem to provide a great deal of security.
Yet several recent news articles suggest
safe deposit boxes may not be as safe as they seem.
An article in The New York Times reported 44 robberies,
in the last five years, related to safe deposit boxes.
And even worse were numerous bank errors
in which boxes were moved, misplaced, drilled open, or
closed by mistake.
A large Maryland bank closed several branches and lost
hundreds of safe-deposit boxes.
One customer lost around a half million
dollars worth of gold and gems.
Now here's the shocking part in each
case banks have vigorously fought any requirement
to make their customers whole.
You might be even more shocked to learn that there is
no provision of federal banking laws that
regulate safe deposit boxes.
Nor do banks insure the belongings of customers
who trustingly store their most precious valuables in
safe deposit boxes.
The risks here fall on the renter.
It's similar to buyer beware.
Wells Fargo safe-deposit box contract
caps their liability at $500.
Citigroup limits it to 500 times the box's annual rent.
JPMorgan Chase has a $25,000 ceiling
on its liability. I've had some personal experience with
this. Decades ago I placed some rare coins in a
safe deposit box with the local bank.
A few years ago I went to retrieve my
valuables only to find the bank had drilled the box open
and sent the contents to the state
as abandoned property. I learned that when I
relocated my office, the change of address
notification failed to carry through to the annual
billing notice for the safe deposit box fee.
So after three years of non-payment the bank chose to
go through the effort of drilling open the box
and shipping the contents to the state treasurer's office.
I think it would have been simpler to spend a few
minutes looking up my information and
contacting me. I really only moved a mile.
Eventually a long story I was able to
retrieve the contents of my box, so I was lucky
but one guy wasn't. An international expert in
rare watches stored 92 watches plus rare coins worth
millions of dollars in a safe deposit box
at a Wells Fargo Bank branch.
Wells Fargo had evicted another customer
for non-payment but unfortunately they
drilled open the wrong safe-deposit box.
The customer found when he went in to
check his box that his safe-deposit box was empty.
Wells Fargo executives could only find
85 of his 92 watches. So the customer
sued. Wells Fargo admitted in court that its employees
had mistakenly drilled into and terminated the box.
The uncovered items which included the
gold and watches estimated to be a million dollars
that he didn't get back. A million dollars.
After years of litigation and appeals Wells Fargo has
offered no restitution at all.
Wow! If the safe deposit box really isn't safe, and
obviously it isn't, what can you do?
Well, here's a couple suggestions. First,
consider investing in a high-quality home safe
for small valuables and important documents.
At least you're not going to drill your own box open
and send the contents into the ethersphere.
Next, scan all your important documents and save
the copies in a secure online vault.
Many financial planners provide such online backup
storage and I'm sure there's a lot of places
you can find that will give you this protection.
If you do use a safe deposit box,
choose one at the bank you use regularly
and, what I fail to do, open it at least once a year.
No matter where you keep your valuables,
insure them adequately and your standard
homeowners coverage is probably not going to cover
these valuables. They're going to need to be scheduled.
And finally, share the passwords and access codes
with another trusted person so
my final suggestion would be to ask
before you store anything with a bank,
understand the contracts, understand what their liability
is. Have a discussion and read about their policies
before you trust any of your valuables to a bank.
Don't learn the hard way like others have.
Thanks for joining me.