Sat Aug 18, 2012, 01:56 PM
ms.smiler (426 posts)
Is Your “Safe” Deposit Box REALLY Safe?
If you or someone you know has valuables in a safe deposit box at a bank, please do yourself a great favor. Please ask the bank manager if the bank is responsible for the “personal property” in your safe deposit box. After the bank manager says “no” to you, please consider how you would possibly prove in court what personal property was once present in your safe deposit box.
You may have the false belief that your personal property is secure in a safe deposit box. Neither the bank nor the FDIC insures person property held in deposit boxes, nor does your renter or homeowners insurance provide coverage.
Whatever may be stored in your deposit box is under the control of many of the same banking institutions that crashed our economy. And if any of that property disappeared for whatever reason, there is little hope of recovery.
There are legitimate reasons why a bank may drill and open deposit boxes. The rental fees may not have been paid or perhaps the box had been inactive, meaning unopened for a period of time.
In the world of honest and trusting people like us, we might expect banks to make good faith efforts to contact us via mail and phone to inform us about whatever problem may supposedly exist with our deposit boxes.
Unfortunately for us, there are incompetent, negligent, incautious, even dishonest people in our banking industry. Personal property is removed from deposit boxes on a daily basis for a variety of reasons.
Just as homeowners who were dutifully making their mortgage payments are surprised to learn that their property was foreclosed, there are deposit box renters surprised to discover that either their box is empty or that their box was drilled and the contents removed.
Just as banks claim that a mortgage payment wasn’t made, they sometimes claim a box rental payment wasn’t made. Just as banks “lose” valuable Promissory Notes, they sometimes “lose” deposit box account information.
Banks may open deposit boxes because of no activity or because of frequent activity which the bank may view as suspicious.
Regardless of the legitimacy of the reason, deposit boxes are opened and the banks declare the contents “Abandoned Property.” They temporarily store the property calculating fees associated with the actions taken by the bank. The fees are expected to be paid either by the deposit box customer or by reimbursement from the sale or auction of the property to which the bank is entitled to recover.
Here is an example of a recent bank auction:
Unclaimed Tiffany and Cartier Jewelry To Be Auctioned At Safety Deposit Box Sale
From the article:
Doyle’s press release reads that the safety deposit box objects are being sold “by Order of Bank of America”.
There are 3 primary threats to personal property in deposit boxes:
1. Bank employee – the individual opening the vault and assisting the customer, may pretend to lock the inner box but actually leave it unlocked before locking the exterior door. They may also palm and switch the customer’s keys.
2. Security & Maintenance Contractors – these employees may temporarily disable security systems to enable them access to boxes.
3. Banks – through negligence or intentional action, determines a reason to drill and open deposit boxes and may or may not inform the customer about the action.
Who can routinely access your deposit box?
1. The bank
2. The Federal government - IRS, Homeland Security via Search Warrant
3. The state government
4. Parties with a court order
If such theft hasn’t happened to you or someone you know, you might be inclined to believe that such incidents are rare. All it takes though is for your bank to determine a reason and they can lawfully drill or electronically open your deposit box without your knowledge, presence or consent.
Once a bank has declared deposit box contents “Abandoned Property” and after they’ve sold or auctioned property to be reimbursed for various “fees” the balance of the property is turned over to states.
Let’s take a look at what is acquired by our states. This “Abandoned Property” falls under the designation of “Unclaimed Property” by our states. Some states are quite responsible with the property and do their best to find the rightful owners. Those departments are actually holding millions even billions in property and they are usually understaffed. So only a few people may be working to match vast amounts of property with the owners of that property. Other states have actually sold/auctioned billions of dollars of property and used the money to help balance their budgets.
Common Forms of Unclaimed Property
Funds from checking or savings accounts
Unredeemed Money Orders or Gift Certificates
Insurance Payments or Refunds
Life Insurance Policies
Certificates of Deposit
Utility Security Deposits
Mineral Royalty Payments
Contents of Safe Deposit Boxes
1 in 10 people have Unclaimed Property.
Less than 25% of Unclaimed Property is ever returned to the owner.
Given that 1 in 10 people have Unclaimed Property I ran a few searches.
I quickly found 4 people on one side of my family and 3 people on the other side that have Unclaimed Property. From the descriptions, they most likely forgot a utility deposit or made overpayments on accounts.
What about the property removed from deposit boxes? Our states actually don’t have a means to determine what is discovered in opened deposit boxes. They rely on documentation submitted to them by our banks. Here is a form where banks attest to what they supposedly discovered in opened deposit boxes.
In addition to an inventory there is a place for a signature from a bank official and for a Notary and I couldn’t help but be reminded of the millions of robo-signed documents in our land records.
Americans store billions of dollars of gold, silver, bonds, stocks, jewelry, cash, firearms, collectibles, etc. in their deposit boxes.
Do you suppose that after banks have auctioned property from those boxes they declared “Abandoned” to recover various “fees,” most of the balance of the property is turned over to the states by the banks?
Or do you suppose only a small percentage of the “Abandoned Property” is turned over to the states by the banks?
Did you know that some banks will offer you a free deposit box if you maintain a certain level of funds in a banking account?
Presently our state treasurers are holding 32.8 billion in Unclaimed Property only a percentage of which is the contents of deposit boxes.
Billions of dollars of “Unclaimed Property” is auctioned by our states.
Remember, when you view or attend these auctions, you are only assuming that all or nearly all property is genuinely abandoned.
Here’s an older informative & unsettling report from California:
All 50 states pay contractors to seize accounts for them.
California sold 5.1 billion in property prior to 2008.
Unclaimed Property is the third largest source of revenue for the state of Delaware.
All it takes is some small “glitch” at the bank and your precious heirlooms, your important documents, your silver coins, your saved cash for a down deposit on a house, your valuable collectibles, can all vanish from your deposit box.
If you were paying very close attention to the words and phrases I used in this OP, you noticed that I started out using the phrase “safe deposit box” which I purposely and quickly dropped in favor of the phrase “deposit box.” As a business person I recognize the word “safe” as a marketing concept.
Americans have gathered their most precious and valuable items and conveniently deposited them within easy reach of financially stressed states and banksters.
I recognize the effectiveness of this marketing concept and I’m amazed at the power of a single word.
5 replies, 884 views
Is Your “Safe” Deposit Box REALLY Safe? (Original post)
|Major Nikon||Aug 2012||#3|
Response to ms.smiler (Original post)
Sat Aug 18, 2012, 10:02 PM
ms.smiler (426 posts)
1. Long range planners are on a collision course with Escheatment laws.
Many people set up a variety of accounts with long range plans in mind such as saving for a home, college and retirement. I see a problem in that while people are making long range plans, states across the country are changing their Escheatment laws and shortening the period of time that low activity assets become “Unclaimed Property.”
In California, that time period used to be 16 years, now it’s 3. In my state of Pennsylvania the dormant period used to be 7 years, now it’s 5.
All our states pay contractors commissions to locate supposedly “Abandoned Property.” Some states even use third party auditors to audit a variety of businesses seeking low activity accounts subject to Escheatment laws. Some states spend notable monies in order to locate Escheatable assets. I see a problem in that by comparison some states spend extremely little in their efforts to reunite the owners with their assets.
If hard to find individuals such as Brad Pitt, Mayor Antonio Villaraigosa, Sir Michael Caine & Kate Winslett have Unclaimed Property, how likely is it that my state could find me?
Response to ms.smiler (Original post)
Sat Aug 18, 2012, 11:56 PM
FarCenter (13,555 posts)
4. A hollow tree is much preferred
The Charter Oak was an unusually large white oak tree growing, from around the 12th or 13th century until it fell during a storm in 1856, on what the English colonists named Wyllys Hyll, in Hartford, Connecticut, USA. According to tradition, Connecticut's Royal Charter of 1662 was hidden within the hollow of the tree to thwart its confiscation by the English governor-general. The oak became a symbol of American independence and is commemorated on the Connecticut State Quarter.
Response to ms.smiler (Original post)
Sun Aug 19, 2012, 04:17 PM
ms.smiler (426 posts)
5. Not only do the Escheat periods vary from state to state but they can vary within a state regarding
the type of supposedly “Abandoned Property.”
A person, who even knows the dormancy period in their state, can’t assume that ALL their property is safe from Escheatment during that time period. As an example, a bank account even an online account designated to a minor may sit peacefully growing due to interest for 5 years while stocks in a brokerage account may become escheatable in only 3 years time.
Regardless of the dormancy time period in your state, about half of all U.S. publically traded companies are incorporated in the state of Delaware and stocks in those companies are subject to Delaware’s Escheatment laws. Buy and hold investors may elect to simply set their account to automatically reinvest the dividends. In only 3 short years, those stocks can easily fall subject to Escheatment by the state of Delaware.
Now I think I understand how Unclaimed Property is the third largest source of revenue for Delaware.
Some states have done more than simply shorten the dormancy or inactivity period.
It used to be that by law, a notice was required to be sent by mail to the last known address of a person with presumed Abandoned Property. Now about 1/3 of our states use inactivity alone as the trigger for Escheatment so millions of Americans can’t even expect a letter in the mail notifying them of account inactivity and the looming forfeiture of their property.
I can’t help but think there should be uniformity of these laws across our 50 states. That of course would be in the best interest of citizens.
In researching this though, I can’t help but conclude that some states, rather than increasing taxes, have intentionally used their Escheatment laws to increase their revenue streams. In my state and in others, interest and penalties may be imposed on the holders of Abandoned Property while the property owner is not entitled to any interest. And of course some states auction the property they have collected and the money goes into their General funds.
Considering the financial windfall for those states, I don’t see where they would mind very much, the fee generating instances where banks contrive reasons to open deposit boxes.