So-called “exemption clauses” that are common in contracts between banks and customers who use their bank’s safe-custody storage services are problematic in terms of the Consumer Protection Act (CPA), says consumer lawyer Trudie Broekmann, commenting on news this week that First National Bank (FNB) has decided to discontinue providing safe-custody storage in its branches.

In the past four months, FNB has been the victim of two separate heists in which safety-deposit boxes were broken into or stolen, and it is facing claims from consumers who have suffered significant losses.

In a media release issued by the bank this week, Lee-Anne van Zyl, the chief executive of FNB Points of Presence, says the decision to discontinue the service “follows the bank’s regular review of service offerings, to align with its business strategy, as well as the assessment of the product’s sustainability”.

With immediate effect, FNB will not accept any new safe-custody applications from existing or new customers, the release says.

“FNB will be notifying impacted individual and business customers to make arrangements to collect their safe-custody valuables from the branches in which they are stored. While customers are advised to make collection arrangements by June 1, the bank will give customers until June 30 to complete all collections,” Van Zyl says.

“FNB will make all reasonable attempts to contact every affected customer through the contact details they have supplied. A customer who may have not received the SMS, telephone call and official letter can also contact their respective branch to make collection arrangements.”

The release states that “in the interim” customers are reminded that it is necessary to take out suitable insurance cover for all valuables held in safe custody, in accordance with the terms and conditions of the service.

Broekmann says the terms and conditions of safe-custody agreements generally state that the bank is not responsible for the theft of, damage to or destruction of items held in custody, unless it is due to the bank’s “gross negligence or fraud”.

She says such exemption clauses generally are “unfair, unreasonable or unjust” in terms of the CPA and are consequently unenforceable.

Broekmann is representing six Standard Bank customers who collectively suffered a loss of R5.4million when their safety- deposit boxes inside the bank’s Kuruman branch, in the Northern Cape, were raided in a robbery in early 2014.

In terms of a summons served on Standard Bank last month, Broekmann says Standard Bank was grossly negligent in numerous respects, which constitutes a breach of the bank’s agreement with its customers, and therefore it should be made to compensate them.

As an alternative claim, Broekmann says her clients are consumers and that the bank is a supplier in terms of the CPA. The agreements between the bank and the consumers are for the supply of goods and/or services within the meaning of the CPA and therefore the provisions of the Act apply.

The plaintiffs are seeking an order declaring the provisions of the exemption clause to be unconscionable, unjust, unreasonable or unfair, and declaring that the bank is precluded from relying on the provisions of the clause to resist the claims of the plaintiffs in this action, she says.

Alternatively, she is pleading that the goods - being the premises housing the safety deposit boxes - constituted a hazard and/or were defective and/or unsafe and/or suffered a failure in terms of the CPA. The hazard, defect or failure caused the plaintiffs harm in that it caused the loss.

Standard Bank is defending the matter.

Ross Linstrom, a spokesman for Standard Bank, told Personal Finance this week that the bank is still offering a safe-custody storage service to primary banked clients.

Questions put to Nedbank this week about their safe-custody storage services went unanswered.

Absa has no plans to discontinue its safe custody service, Marius de la Rey, the chief executive of customer channels, distribution and coverage at Absa retail and business banking, says.

About 6800 Absa customers make use of the bank’s safe-custody service, mainly from the affluent and business market segments, De la Rey says.

“It is important to note: When you place valuables in a safety deposit box or vault locker at Absa for safekeeping, you do so on a ‘contents unknown’ basis, meaning that the bank doesn’t know what you’re storing and therefore does not insure your valuables,” De la Rey says. “In the event of a loss, you will not be able to claim from the bank. Only if you have insured the contents of your box with your insurer, will you be covered for any loss” he says.