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A safe deposit box in a bank would seem to be the safest place in the world to store your valuables.
But as a New Jersey man recently discovered, not only are safe deposit boxes not safe; there are no laws or regulations in place to compensate customers if their stored property is missing or destroyed.
Philip Poniz was a collector of valuable rare watches and stored his cache, valued at more than $10 million, in a safe deposit box inside his local Wells Fargo bank. One day he opened the box and saw, to his horror, that it was empty.
Supposedly, the bank had mistakenly removed Poniz’ box thinking it was the property of another customer who had not kept up on payments. After drilling the box open, the bank had shipped its contents to a storage facility. After Poniz discovered his empty box, the bank returned a few items, but the vast majority had disappeared — and no one seems to know who is responsible or where the watches might have gone.
If that wasn’t jarring enough, Poniz then learned more bad news: The bank would not compensate him for his loss.
While people like Poniz believe they are protected, banks have no such obligation to provide it. Bank contracts with safe-deposit-box customers typically contain disclaimers that they have no liability in the event of losses. And the Federal Deposit Insurance Corp. insures only bank deposits — not the contents of safe deposit boxes.
Jerry Pluard, president of Safe Deposit Box Insurance, told the New York Times that more than 30,000 boxes are damaged each year and that oftentimes he tells people, “If the banks do something inappropriate, it’s very hard for customers to get any sort of relief.”
Nevertheless, it would seem that safe deposit boxes should be safe. They are stored within bank vaults with thick walls. They require two keys to be opened — one belonging to the customer and one to the bank.
But mistakes can happen. In 2017, three Bank of America customers in San Francisco found their deposit boxes empty when the bank drilled them open because account information — Social Security numbers, birth dates, etc. — was supposedly missing. The customers, who lost tens of thousands of dollars’ worth of property, say the bank had the information all along and should have at least notified them about the supposed absence. The property, which the bank had shipped to a holding center, was subsequently returned — but much of it was either missing or damaged.
Another risk, often unanticipated, is one provided by Mother Nature. While bank vaults are designed to withstand fires and floods, they do have their limits. Liability waivers that customers sign also include acts of God and other catastrophes. Hurricanes Katrina flooded some 8,000 safe deposit boxes in 2005, for instance, and the 9/11 terrorist attack resulted in significant losses in World Trade Center bank vaults — including an estimated 40,000 negatives owned by Pres. John F. Kennedy’s personal photographer, Jacques Lowe.
While these risks are real, experts say that safe deposit boxes are nevertheless safer than home safes. They are probably best suited for important documents and small heirlooms and valuables — but not cash. And because neither banks nor the FDIC insure the contents, customers should be sure to get insurance on their own.
But carrying homeowner’s insurance on millions of dollars’ worth of property can be expensive — which is why Mr. Poniz put his items in a safe deposit box in the first place. Meanwhile, he is trying his best to achieve recovery via the courts. He has sued Wells Fargo and has spent tens of thousands thus far in legal fees.
So if you’re thinking of keeping Aunt Tilly’s precious family heirlooms safe storing it in a safe deposit box, be advised. Be aware that if they disappear, you might be out of luck. Be aware that there’s probably no such thing as a totally safe deposit box.