Isn't this just covered by ordinary tort law? There is a duty of care, there is a lapse of said duty. The issue seems to be that people are putting valuable items into it and then signing a contract that says that the limit of liability is limited to much less than the value. If that isn't negotiable with the bank then the bank is just not willing to accept the risk. Then either you can find an insurer who is willing to accept the risk or you can find a different bank who is willing to accept the risk or you can build a safe yourself since all the risk is on you anyways.
There doesn't need to be special laws for everything.
In the case of banks I think they have proven conclusively that they do need laws for everything and extensive oversight to ensure they are complying with those laws. They are always looking for loopholes and just the right wording to put their interests in front of yours. At least in the US, maybe banks are better behaved in the rest of the world. In the US we have three federal agencies and countless state agencies all dedicated to keeping the banks in line and they all stay busy.
As the article says, banks are trying to get out of this business. They are probably just there to avoid angering customers who already have one, and to appeal to the nostalgic sense of a bank being a physical thing.
Not sure what regulation will really accomplish other than giving them an excuse to exit the business faster.
If we are to add a law here, I think it may make sense to require contracts to be easy to understand and as short as is reasonable. I think it's pretty reasonable for someone to skim over fine print especially for something that seems obvious.
Something like a safe deposit box should be a single page document with something like this:
- cost is $X/month and prices are revaluated every Y months and can increase by a maximum of $Z/month
- may access the box X times/month without any additional fees
- bank's liability is max $X or Y months of rent, whichever is higher/lower
- if rent is not paid, X happens, and after Y months of non-payment, Z happens
- policy/fee for lost keys
I haven't actually opened one, but I wouldn't be surprised if the contract was 10 pages long and the maximum liability was somewhere in the middle in fairly small print.
I think all contracts should be written like this. If any clause of the legal code contradicts the summary for layman, then the summary for layman should take precedence during its interpretation in the court.
This practice is not unusual. Books often start with a preface or foreword. Very dense technical or research papers start with an abstract and introduction. But for some reason contracts do not follow this practice.
How would that help with this - "Banks typically argue — and courts have in many cases agreed — that customers are bound by the bank’s most-current terms, even if they leased their box years or even decades earlier."
We could also take the mortgage approach, where the actual contract is in fact very long, but there is a required simple-to-understand cover sheet that summarizes all the pertinent details in a clear way.
Interesting clause. There’s no insurance and no guarantee of protection against anything. One wonders what stops them from keeping your stuff in a basket next to the mints.
I would say the law that's needed is advertising-based. There's a huge disconnect between what "safety deposit box" means to people and what those actually, legally, are in 2019 according to the fine print. That's the main issue.
Imagine if it were legal for companies to pass something off as a "bank account" when they weren't actually a bank. And it explains it all in the fine print, but as we all know nobody reads the fine print, especially when the offered product is so seemingly familiar. We'd have fly-by-night operations losing people's money left and right, and then legally washing their hands of it.
Attorney here! (Not legal advice -- consult a licensed attorney in your jurisdiction).
In order to prevail in a negligence case, you have to establish duty of care in your complaint. You can't simply declare it exists and expect a court to accept it without question.
That said, I generally agree with the rest of your comment. You can always tell how much entities are really looking out for your interest by reading their limitations-of-liability clauses. Wise consumers should purchase insurance to cover the gap.
OK, but even if there was no limit in damages, what did you have in there? How do you go about proving it when it's only you putting and taking things out of there.
The same way you do with house contents for an insurance policy? Photos and other documentation are useful.And no insurance policy is going to be unlimited. Specific very high value items will be enumerated.
This is one of the other jobs of a notary: not vouching for identity, but rather signing off on a document stating that a collection of associated objects are what is described in the document.
Such a document has the same sort of purpose as a certificate of authenticity you'd get from an appraiser; but you use a notary in cases where the thing doesn't need authentication to be valuable, instead being a liquid asset with a clear market value. The notary doesn't write down such a value, or even know it; they just sign off on a description of the item, knowing that the value can later be readily determined from the description by any interested party.
Of course, to make this work, you need the notary to sign off on the contents of the collection right before you secure the collection into storage. Otherwise, you could just make arbitrary alterations to the contents yourself. For this reason—and because notaries don't usually like getting dragged all around town to vouch for things—usually a bank will retain the services of notary of their own, and offer it to safe-deposit-box users as an option. If a notary is used to vouch for the contents on first deposit, then a notary must be used on all further deposits/withdrawals to "retain the chain of custody." This turns the safe deposit box into a managed safe-deposit service.
I don't know of any US bank that uses a notary in quite this way. It's not a notarial act under the model notary act.
A notary can acknowledge the depositor's claim and identity, but can't be held liable for the depositor's claims.
A notary can verify that a man with John Doe's legal ID claims to be depositing one (1) Shroud of Turin and twelve (12) Pieces of Eight from a Spanish Galleon with certificate of authenticity from the Franklin Mint, but the notary is not verifying the truth about or value of the actual contents.
Right, I didn't mean to imply there is such a thing (and such a thing would be thoroughly useless.) I meant that they have a notary on retainer, that that notary gets almost all their work from the bank's clientele, and that they tend to operate either out of—or right across the street from—the bank itself. They're still an independent notary; but instead of paying them yourself, you pay the bank and the bank pays them to come in and help you. But it's still a relationship between you and the notary, not between the bank and the notary. The bank is essentially serving as lead-gen for the notary.
> Wouldn't it be more efficient to put the risk on the bank, so that it is the bank that seeks insurance to cover that risk?
No, because the value stored in the boxes differs by orders of magnitude and the bank doesn't even know the value.
$200/yr is just not a reasonable amount of payment to take on a 10s of millions of dollars liability, and most box customers wouldn't pay whatever price would make that liability reasonable.
(Based on the 500x annual cap mentioned in the article you could imagine that the bank would want $20k/yr for a $10m liability)
There doesn't need to be special laws for everything.