|
E-mail Newsletter
We publish a monthly RM007
e-mail newsletter that covers new services and products, RM book reviews, upcoming workshops, security updates
and other learning opportunities... Sign
up today.
RISK MANAGEMENT PRESENTATIONS
Annual Meetings
Chapter Meetings
Credit Union Staff Training
Workshops & Seminars
Consulting Services
RM007 CATALOG
On-line
Store
Manuals
RM LEARNING CENTER
Faculty
Curriculum
Discussion Board
RM TOOLBOX
On-line Consultation
Seminar Tri-folds
Self-assessments
Professional Associations
Trade Associations
Security Companies
Research Links
Credit Union History &
Traditions
ABOUT RICH WOLDT
Profile
Press Packet
|
 |
Safe Deposit Boxes' Contents Remain Buried by Attack
Recovery, liability issues are a concern
October 7, 2001
by Henry Gilgoff
A LETTER FROM a major financial institution to some of its customers offered a glimpse into one of the little-noted
matters of personal finance to flow from the nation's worst terrorist attack.
The Sept. 19 letter from J.P. Morgan Chase dealt with safe deposit boxes.
The letter started with recognition of the loss of life and a nation's grief. "We have all been touched in
some way by the overwhelming tragedy at the World Trade Center," the letter signed by a Chase vice president
began. "Our initial thoughts are with the victims, families and loved ones."
Having said what I, too, would say, the letter then dealt with the need to work "through all the issues."
One such issue in Chase's case was the realization that many of the customers who had a safe deposit box at what
had been its branch at Five World Trade Center may be concerned.
The building was partially destroyed after the Sept. 11 attacks on the Twin Towers, and the people in the branch,
located on the ground and plaza levels, were safely evacuated, according to Chase spokeswoman Kristen Batteria.
For security reasons, she declined to disclose the location of the vault that includes the safe deposit boxes or
tell the number of boxes at that branch.
That Chase branch was not the only bank affected. A FleetBoston Financial's branch in Chinatown, south of Canal
Street, was closed temporarily, with about 5,000 safe deposit boxes. After that shutdown, Fleet opened the branch,
initially on Sept. 17 just to give customers access to their safe deposit boxes, according to Jeff Barkern, an
executive vice president in charge of branches in the metropolitan area.
Chase's letter reported that "due to the magnitude of the cleanup effort, and until the area is secured, it
may be a period of time before we can investigate."
By keeping affected customers informed "so they don't feel they're being ignored," Chase has been acting
prudently, said David McGuinn, owner and founder of Houston-based Safe Deposit Specialists, which offers training
and consulting to such customers as state banking trade groups.
McGuinn said that the terrorist assaults do not diminish the relative safety offered by safe deposit boxes, but
the disaster is not the first time attention suddenly has turned to those receptacles for valuables and documents.
Chase's Web site lists items "that can be protected in a Chase safe deposit box." They include jewelry,
rare coins and stamps, insurance policies, property deeds and marriage licenses.
In the past, it could have been a flood or a theft that raised America's consciousness about safe deposit boxes
and the limits of a bank's liability. "Banks are not liable unless they're proven to be negligent," said
Bethany Blankley, spokeswoman for the state Banking Department. "Obviously, banks in this case [of terrorism]
would be unlikely to be found to be negligent."
In a Chase "lease of safe deposit box agreement," given to me by one of its customers, a liability clause
specifies that the bank does not have liability for loss or damage caused by fire, water, robbery or burglary or
"other mishap" as long as it has taken "reasonable" security measures.
McGuinn, the consultant, said some consumers nationally still have managed to win court victories against banks,
but they seem very much the exception. He cited the case of a Missouri couple, Geoffrey and Valerie Seitz, who
rented a safe deposit box from LeMay Bank & Trust in St. Louis, now Midwest Bank Centre, for contents that
included a violin that an expert dated back to the 18th century.
In 1998, the State Supreme Court of Missouri affirmed a lower court's award of $315,000, which was paid by the
bank's insurer. By a court summary of the facts, the bank had relocated its records, movable furniture and even
a large mural from the ground floor but repeatedly told Geoffrey Seitz the vault was secure and "everything
was safe." The instrument was destroyed in 1993 when water seeped into the couple's safe deposit box during
a flood, according to the court.
Bernard A. Reinert, a lawyer for the bank, called the decision very unusual and "pathetic." One dispute
was the legal standard to be used in assessing the bank's actions. Geoffrey Seitz said the bank had advance warning
of the flood. "They were just negligent," he said, adding this footnote: The award was even more with
interest but the couple wound up with only about $15,000 after settling a related suit by the instrument's previous
owner, with taxes and legal expenses considered.
In New York, state law requires that banks and safe deposit companies give notice that safe deposit box contents
"may not be fully protected against loss under the insurance coverage maintained by the bank or safe deposit
company." The notice advises consumers to keep a complete list and description of all property stored in the
box. It also says that consumers may wish to secure their own insurance.
Chase spokeswoman Batteria said, "It is common industry practice that customers maintain their own insurance
for the contents of safe deposit boxes since their contents are private, and it is impossible for the bank to verify
contents."
Whether a standard homeowner's or renter's policy provides coverage for the contents of a safe deposit box and
how much that coverage may be are questions that can be raised with an insurance company or agent.
The answers apparently vary, based on myriad factors.
Richard Fatzynytz, regional catastrophe coordinator for the State Farm group, said explosion and fire are among
perils covered by the group's homeowner or renter policies. Flooding caused simply by a torrential downpour with
water entering a home through the ground rather than through an opening caused by wind damage, would not be covered,
he said.
The maximum of any possible payment may depend on such factors as the overall coverage and whether a customer simply
has a basic policy or a rider or separate "personal articles policy," the latter two at added cost.
Hopefully, the customers who had safe deposit boxes at that Chase branch will be reunited with their records and
valuables. "To the best of our knowledge from law enforcement," said Chase spokeswoman Batteria, "the
outer vault appears to be intact, but it is inaccessible to us at this time. Once we are permitted to access the
site, our top priority will be recovering our customers' safe deposit boxes."
Copyright (c) 2002, Newsday, Inc.
--------------------
This article originally appeared at:
http://www.newsday.com/business/printedition/ny-bzyour072401709oct07.story
Visit Newsday
online |
| |
BACK
|
|
|
|
