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ombudsman news

issue 71

August 2008

banking complaints involving safe deposit boxes

Some customers still use the safe deposit facilities provided by their bank - and we continue to receive complaints about these facilities. The complaints usually involve allegations that jewellery or documents that were deposited with a bank for safekeeping have gone missing.

When dealing with such complaints, we expect - as a matter of course - that the bank will be able to provide a proper audit trail, with details of when anyone had access to the box. Such information may, however, be of only limited help to us. The main difficulty - particularly in cases involving jewellery - can be deciding exactly what the box contained in the first place.

Most banks specify that customers must insure any items deposited with them. But in the cases we see, few customers have actually arranged such insurance. They are therefore unlikely to be able to provide the types of documentary evidence that an insurer would require, such as photographs, verified schedules and regularly updated valuations, that would help us establish exactly what was kept in a safe deposit box. We may have only the customer's word for it that a valuable item was once in the box but has now gone missing. The situation is made more difficult by the fact that, in many of the cases we see, the customer had not looked at the contents of their box for many years (sometimes even decades) before a problem was spotted. And a customer's recollection of what they kept in their deposit box may not be as accurate as they believe it to be.

Matters can be complicated still further if a safe deposit box was held jointly and there is a lack of agreement between the joint customers about the contents (as in case 71/07). During our investigations we can require the customer bringing the complaint, and the bank about which the complaint is made, to answer our questions. However, we cannot require third parties to cooperate with our enquiries. This can also be an important factor where (as in case study 71/10) detailed evidence from third parties appears to be central to the issue.

As some of these cases illustrate, even where we are unable to uphold the broader claim, we often find that failings in the bank's safe deposit service have caused a customer significant distress and inconvenience, for which they should receive fair compensation.

issue 71 index of case studies

  • 71/7 - consumer complains that jewellery disappeared from the bank safe deposit box she held jointly with her husband
  • 71/8 - consumer inspects his bank safe deposit box for the first time in nearly forty years and complains that rare and valuable stamps have gone missing
  • 71/9 - bank sends customer the wrong documents when asked to return house deeds deposited for safe-keeping, then denies ever having had the deeds
  • 71/10 - customer complains that items of jewellery are missing after bank mistakenly released contents of deposit box to a different customer
  • 71/11 - consumer complains that jewellery is missing from her bank deposit box

71/07
consumer complains that jewellery disappeared from the bank safe deposit box she held jointly with her husband

Mrs G complained that jewellery worth £20,000 had gone missing from the bank safe deposit box in which she and her husband had kept a number of items for some years.

After she and her husband had separated, she visited the bank in order to remove some of his valuables from the box and return them to him. During that same visit she informed a member of the bank's staff that she and her husband were getting divorced. She said the bank assured her that until there was a formal agreement about the distribution of their assets, neither of them would be allowed further access to the box without the other's knowledge and agreement.

Six months later, Mr and Mrs G went to the bank together to remove all the contents of the box for valuation, in connection with their divorce settlement. Mrs G said that items of jewellery worth £20,000 had disappeared from the box since her last visit.

She subsequently discovered that around three months earlier the bank had allowed Mr G access to the box. The bank accepted that this should not have happened without her agreement, and it offered her £250 for the upset this had caused her. However, when it refused to accept responsibility for any other loss, Mrs G referred the dispute to us.

complaint upheld in part
Mrs G told us that her husband had denied removing anything from the box during the visit he had made on his own. However, as he was not a party to the complaint, he was not under any obligation to participate in our investigation and we were unable to discuss the matter with him.

Mrs G said that not long after she and her husband had separated, she had placed jewellery worth around £20,000 in the box. She was unable to provide any evidence confirming exactly what these items were, nor could she establish that she was the sole owner.

In the circumstances, we did not think there was sufficient evidence for us to be able to reach a conclusion in this case. We suggested to Mrs G that it might be more suitable for her to include her claim for this jewellery as part of the divorce settlement. Both she and Mr G could then be required by the court to provide evidence, and the court could allocate assets between them - something we had no power to do.

However, we agreed that the bank had caused her significant distress and inconvenience by allowing Mr G sole access to the box when it knew the couple were divorcing. We said the bank should pay Mrs G £400 in recognition of this, as we thought its initial offer of £250 was insufficient.

71/08
consumer inspects his bank safe deposit box for the first time in nearly forty years and complains that rare and valuable stamps have gone missing

Shortly after leaving university in 1968, Mr Y inherited his grandfather's collection of stamps. Aware that the collection included some rare and valuable items, Mr Y wrapped four albums of stamps together in a brown paper package and placed this in a safe deposit box at his bank.

Mr Y did not look at the stamps again until February 2007, when he was considering selling them. By that time the package containing the albums had been moved to a different branch of the bank, as the original branch had closed down. Mr Y said that when he looked through the albums, he noticed that a number of valuable stamps were missing. He reported this to a member of the bank's staff and decided not to remove the package from the bank, as he had originally intended.

Mr Y visited the branch again a couple of months later, in April 2007. He said he was surprised on that occasion to find that some of the missing stamps had been replaced. He concluded that a member of the bank's staff must originally have taken the stamps. He thought this person must then have replaced some of them in a panic, after Mr Y visited the bank in February 2007.

Mr Y asked the bank to compensate him for those stamps which were still missing - and which he estimated to have a present-day value of around £30,000. The bank said there were no grounds for his allegations that stamps had been stolen from the safe deposit box. Mr Y then came to us.

complaint not upheld
We established that the bank operated "dual control" of all items deposited with it. In other words, no member of staff was allowed access to these items unless they were accompanied by another member of staff.

The bank's records showed that during a routine branch inspection of deposited packages in 1970, staff had noticed that the wrapping around Mr Y's albums had started to come undone. The staff had re-sealed the package, witnessed by members of the inspection team.

It seemed to us that if Mr Y's view of events was accurate, it would have been necessary for a number of members of staff, probably employed in two different branches, to have colluded on at least two occasions. This would need to have happened in order for certain stamps to be removed at some time between September 1968 (when the albums were first deposited) and February 2007 (when Mr Y next had access to the box.). Collusion would have been required again at some time between February and April 2007, in order to replace some of the stamps. In the light of the evidence, this seemed improbable.

Mr Y produced a list of stamps which he said represented an inventory of everything he had deposited with the bank. However, we were not persuaded that it represented an accurate record of what had actually been in the albums. Nearly forty years had passed since Mr Y had last looked at the stamps. In all the circumstances, we thought it unlikely that he still had a clear recollection of exactly which stamps he had left at the bank.

We also thought it unlikely that any stamps had, in fact, been missing when Mr Y visited the bank in February 2007. He had told us that, before he got as far as looking at any of the stamps on that occasion, he had been surprised by the appearance of the wrapping around the albums. He said this was substantially different from the original packaging. It had immediately aroused his suspicions that some of the contents might have been removed. However, the bank's records confirmed that their staff had done no more than reseal the original packaging - they had not removed or replaced it.

We fully accepted that Mr Y had brought his complaint in good faith and in the honest belief that stamps had been stolen from his albums. However, from the information available we were unable to uphold the complaint.

71/09
bank sends customer the wrong documents when asked to return house deeds deposited for safe-keeping, then denies ever having had the deeds

Mr and Mrs V's complaint concerned several documents relating to their house, including the deeds, which they said they had always kept at the bank. They had asked the bank to return the documents to them because they were in the process of selling their house and moving to a new property. To their surprise, however, the bank sent them deeds and other papers relating to someone else.

The bank apologised for its mistake and said it would send the correct documents within the next few days. The couple heard nothing more until the bank wrote to them. It said it had been in touch with the solicitors who acted for the couple when they bought the house to which the deeds related. The solicitors had confirmed that they never sent the deeds to the bank but had given them to Mr and Mrs V - although the solicitors were uncertain about the date when this had happened.

Mr and Mrs V strongly disputed this version of events and they eventually referred the matter to us.

complaint upheld
With Mr and Mrs V's consent, we contacted their solicitors. We asked to see their file with details of all the work they had done in connection with the couple's house purchase. We discovered from this that the solicitors had been mistaken when they said they had never sent the deeds to the bank. The solicitors' records showed they had sent the deeds to the bank on or around 14 June 2002.

The bank's deed centre had written to Mr and Mrs V on 26 June 2002, confirming receipt of (unspecified) documents. And we established that the documents belonging to another customer, sent to Mr and Mrs V in error, had originally been deposited with the bank on 14 June 2002. We concluded that the bank had received Mr and Mrs V's house deeds and had then lost or permanently mislaid them.

The Land Registry had supplied Mr and Mrs V, at no additional cost, with copies of some of the information they had needed in order to complete the sale of their house. However, the couple showed us evidence that they had been obliged to spend a total of £514 to replace other important documents. We said the bank should reimburse those costs in full and pay the couple £250 for the inconvenience they had been caused.

71/10
customer complains that items of jewellery are missing after bank mistakenly released contents of deposit box to a different customer

In 1976 Mr and Mrs T placed a number of items of family jewellery in a safe deposit box at their bank.

Another family with the same name (but which for the sake of clarity we will call the "E" family) banked - and used a safe deposit box - at the same branch.

Following Mr E's death in 2002, the bank sent various items that had belonged to him to the E family's solicitors. By mistake, the bank also sent Mr and Mrs T's deposit box, with all its contents.

This did not come to light until 2006. The bank then wrote to the E family's solicitors to explain what had happened and ask for the return of everything sent in error. When Mr and Mrs T checked through what was returned, they said that a number of items of jewellery were missing.

complaint upheld in part
As part of our investigation, we contacted the E family and their solicitors. They willingly cooperated with our general enquiries, although we had no power to make them answer questions, as they were not a party to the complaint.

The E family said they had been unaware that the contents of the box in question had not belonged to the late Mr E. But they said the box had been held in storage and they had not looked at it before the error came to light. Their solicitors said that at the time the box was returned to the bank it had been virtually full, and had appeared to contain a large amount of jewellery.

Mr and Mrs T had no evidence of what they had deposited in the box, other than a typed list which they submitted with their complaint. And since the E family, whose evidence was central to the case, was not a party to the complaint, we were limited in what we could investigate.

We accepted that Mr and Mrs T had brought their complaint in good faith, but we said there was insufficient evidence for us to uphold their complaint about the items they said were missing.

The bank's mistake in releasing the box, and the circumstances in which this had come to light, had caused the couple an exceptional amount of distress and inconvenience. The bank offered to pay them £1,000 compensation for that, together with a further £100 for their expenses. We obtained the bank's agreement that Mr and Mrs T would only accept that offer if it was clear to all concerned that it was not a settlement of the full claim. Mr and Mrs T therefore remained free to pursue the claim for the jewellery in court, where all the parties involved, including the E family and its solicitors, could be questioned.

71/11
consumer complains that jewellery is missing from her bank deposit box

Mrs D had inherited a considerable amount of family jewellery, most of which she kept in a safe deposit box at her bank. She visited the bank quite frequently to take out - or return - individual items that she wore for special occasions, or lent to close family members for events such as family weddings.

She said that on one of her visits she noticed that a valuable necklace and earring set was missing from the box. She complained to the bank, suggesting that a member of its staff had taken the items and made a false entry in the bank's log of visits. The bank denied that any of its records had been falsified and it said nothing could have been removed from the box without Mrs D's knowledge and authority.

complaint settled
Mrs D remained adamant that a false entry must have been made in the bank's log book, enabling a member of the bank's staff to gain access to the box and take the jewellery that she said was missing.

As part of our investigation, we therefore asked her to check carefully through the copy of the log book that we sent her. This gave details of every visit to her deposit box. We asked her to identify any visit that did not appear to coincide with an occasion on which she, or a family member, would have worn jewellery normally kept in the bank.

Mrs D came back to us a little later, to say she was withdrawing her complaint. She said she had used family photographs as an aid to checking the dates of her various visits to the box. A couple of these photographs showed one of her daughters-in-law wearing the "missing" necklace and earrings.

The pictures had been taken not long after that daughter-in-law had moved to Canada with her husband. Mrs D recalled, with some embarrassment, that before the couple had left the UK she had given them the jewellery as a gift.

 

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ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.