Illustration: Colin Daniel

When you place valuables in a safety deposit box or vault locker at a bank 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. 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.

What then, is the use of a safety deposit box or vault locker (see “Definitions”, below), and who still uses them?

Johan van Schalkwyk, the head of sales and service at Absa, says customers generally use the bank’s “safe custody services” for the safekeeping of items such as jewellery, artworks or confidential documentation.

About 12 000 Absa customers make use of the bank’s safe custody services, which are “aimed at affluent and business market segments”, Van Schalkwyk says. Hence, the percentage of customers using these services is “not significant”.

Alan Milne, the head of operations for First National Bank (FNB) Banking Channels, says FNB no longer actively markets the bank’s “deed box” service to customers, although it will continue to provide the service to clients who are renting boxes.

He declined to say how many customers use the service and so too did spokespeople from Nedbank and Standard Bank. But Thembi Malabi, senior communications manager at Nedbank, says the bank has noted a “growing demand from clients who wish to take up this product”.

At Absa you can hire a vault locker for between R1 000 (for a small one) and R2 720 (for an extra-large one) a year, or buy a deed box for R500. Absa also charges an initiation fee of R350 and a fee of R15.50 for each time you access your box or locker.

FNB offers deed boxes and lockers. A small deed box will cost you R340 plus R125 a month and a large one R370, plus R200 a month. Lockers at FNB range from R100 a month to R250 a month, and this charge includes access.

At Nedbank, renting a safe custody locker can cost you R580 a year for a small locker to R940 a year for a large one.

Standard Bank also offers both deposit boxes and vault lockers. A safety deposit box costs R940 a year (for the smallest) to R1 980 a year (for the largest).

A locker can cost R1 150 a year if you are a customer with an active Standard Bank transactional account or an investment account with a minimum balance of R100 000, to R3 750 for the largest locker. The cost is substantially higher for non-Standard Bank customers.

The banks all confirmed that the confidential nature of the service precludes the banks from knowing the contents of the boxes. As such, the banks say they cannot offer any guarantees against losses or damage to goods stored by them.

CASE STUDY: ROBBERS BREAK INTO VAULT AT STANDARD BANK

In February this year, there was a robbery at Standard Bank in Kuruman in the Northern Cape. Robbers apparently drilled a massive hole through the wall of the bank’s vault and made off with an undisclosed number of safety deposit boxes.

Two of the stolen boxes contained cash and valuables belonging to Kuruman businessman Mr F and his mother, Mrs F. The boxes contained, collectively, more than R1 million in cash, Krugerrands valued at R1.2 million and jewellery worth about R211 000. Mr and Mrs F had not insured the contents of their boxes and have suffered a loss of more than R2.4 million, which they are claiming from Standard Bank.

Mr F claims that on the night in question, the bank’s alarm went off but no one from Standard Bank responded to it. He says the bank’s camera system was not in working order and consequently the robbers cannot be identified. The robbers spent “the most part of the evening inside the bank” without detection, he says.

The terms and conditions of Standard Bank’s contract states that the bank is “not responsible for any theft, damage or destruction of any items, unless it is due to our own gross negligence or fraud. We do not insure safe custody articles deposited ... It is up to you to insure them if you wish.”

The bank has declined to accept liability for their clients’ losses. It says Mr and Mrs F agreed to the terms and conditions and the risks associated with using the safety deposit boxes. The bank also referred their clients to the ombudsman (see “Banks are not liable for loss, says banking ombudsman”, below).

But Trudie Broekmann, the couple’s attorney, believes that the terms of the safe custody contract are void, because they’re unreasonable – which is a breach of the Consumer Protection Act (CPA). Broekmann says the bank also appears to have been grossly negligent, and therefore cannot rely on the exclusion of liability in its terms and conditions.

Broekmann sent Standard Bank a letter of demand, on behalf of her clients, stating that the exclusion of liability by the bank is a breach of the CPA.

“A safety deposit box at a bank is intended to keep the consumer’s movable goods safe and to avoid them being stolen or lost – that is the intended effect of placing goods in safe custody with the bank. In this case, the safety deposit box and/or the bank’s facility for safe custody articles did not perform in the intended manner or to the intended effect. This is defined in the Act as a ‘failure’, also referred to as a product failure,” Broekmann says,

When such a failure occurs, or there is a defect or hazard in goods, such as the bank’s safe custody facilities, or there are inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from the use of the goods, then the supplier is liable to the consumer for any loss of any property, she says.

Mrs G, another Standard Bank customer who lost gold coins similar in value to Mr & Mrs F’s losses, says bank staff and police have hinted at an inside job.

The Kalahari Bulletin in Kuruman reported that a Standard Bank branch in Hotazel was also robbed in April.

In response to Broekmann’s letter, Joop Dekker, senior manager: media complaints liaison at Standard Bank, says the bank denies that its terms and conditions applicable to safe custody articles are non-compliant with the CPA “as these are fair, reasonable and just”. He says the bank “acted reasonably, and without negligence” and denies liability in respect of the claims made by Mr and Mrs F.

Dekker says the bank will defend itself against legal action.

When asked how many customers had their boxes stolen in the robbery and how many customers were making claims against the bank, Sihle Bolani, a media relations officer at Standard Bank, said the bank is still investigating and that it is “not appropriate to share this information at this stage”.

BANKS NOT LIABLE FOR LOSS, SAYS BANKING OMBUDSMAN

Clive Pillay, the Ombudsman for Banking Services, says that even if a bank is broken into and your deposit box or locker is stolen, the bank is not contractually responsible for the loss. This is because the agreement signed with the bank generally states that the bank will not assume any responsibility, irrespective of whether it is negligent or not.

In a consumer information note, Pillay says that claims for losses of this nature are more appropriate for a court of law to determine whether the bank could have prevented the loss. His office is not aware of any court case where a bank has been successfully sued for the contents of a safety deposit box being stolen or lost.

Pillay says when renting a safety deposit box from the bank, it is “an intrinsic nature of the agreement signed” that the bank does not know what will be placed inside the box and does not assume any responsibility for the loss of any of its contents.

“If banks had to assume any responsibility, they would insist on an accurate record being kept of the contents, and confirming the contents, at all times. The banks would further restrict the value of the items kept in the box and would require valuation certificates. These requirements would obviously negate the purpose of a safety deposit box entirely.”

Pillay says this information note (dated January 2010) is intended to inform a potential complainant of how his office would approach disputes and claims of this nature. “Each case is, however, assessed on its own merits. If a case should arise where the evidence clearly shows that the bank could have prevented the loss, we would have no hesitation in making an appropriate recommendation. In our experience, however, these claims are more suited to a court.”

Definitions: Safety deposit boxes and deed boxes are portable and can be removed from the bank’s premises (to be opened off site) and returned to the bank after a number of days. A vault locker cannot be removed from the bank.