Are Safe Deposit Boxes Safe? No

http://www.kitco.com/ind/vaughn/nov032009.html


Are Safe Deposit Boxes Safe? No


By David Vaughn

Nov 3 2009 2:27PM
www.goldletterdv.com


Got a lot of email when I suggested that safe deposit boxes are not safe from bank or government intrusion.

In most minds the “safe deposit box” is the “holy grail.” Our comfort will always be OK as long as our safe deposit box remains safe from others ill intent. Noticed the last few years how the Swiss Banks are no longer confidential places for one to store anything of value? The US government has applied pressure on Switzerland to make available Swiss bank records at any time requested by the US Government.

And in light of these facts you have the foolishness to believe your humble safe deposit box at the local corner bank is safe? Give me a break. Why is it that US citizens always seem to be behind the times when assimilating current information? Well, I can understand this if the only news one watches is Brian Williams or Katie Couric. I feel informed already. Want to hear a sample of Ms. Courics world wide exposing articles seen and heard across the world?

“…parenting expert and author of "Queen Bees & Wannabes," talks about raising teenagers, what parents can do about bullying in schools…”

Definitely a worthwhile subject to study. But on the evening world news? Anyway. Maybe you get my point. Let’s get back to the story about the inviolability of the average bank savings deposit box. A lot of readers thought I was nuts when I told them their safety deposit bank boxes were not safe. I sincerely encourage you to turn the channel and start following REAL news services instead of the big 3 at 6:30PM. That is if you really want to learn what is going on today.

It’s really amazing to me that the majority of citizens are not even aware of the fact that many of their personal freedoms that they took for granted yesterday are already gone. Of course, this process is accomplished a little at a time and usually in the dark of night when everyone is asleep. When finally discovered by the average man or woman on the street the shock is kind of like running to the linen closet and finding the last roll of TP gone. What do you do? From an email reader below.

David:

“I have always enjoyed reading your articles and have learned quite a bit from them. However, I am a little perplexed about the portion that states" "Hold your physical gold and physical silver and do not place any thing of value in your bank deposit box. Already across the nation deposit boxes are being opened and the contents auctioned off by the banks to raise money. Bank of American being one of these banks. Again, do not place any thing of value in your bank deposit box.” "I have what is called a safety deposit box and I do keep valuables in that box and it is hard for me to believe the contents could be confiscated and sold. David, please explain!

Thank you Sincerely, Charles”

And below is another faithful believer!

David:

“You write that banks including B of A are seizing the contents of safety boxes and auctioning it off. I have not heard anywhere else that this is happening? Is it true? Can you verify this is so? Or is it only in cases where the rental fee is delinquent on a particular box? Surely this cannot be legal? Please assuage my shattered nerves!!! Pat”

Wow! There are this many people that really believe their money to be safe in the hallowed walls of their local bank vault? What fools these mortals be.

David,

“I was shocked to read in your article that “Already across the nation deposit boxes are being opened and the contents auctioned off by the banks to raise money. Bank of America being one of these banks.” “Would you please point me to your source for that?”

Thank you, David

Daddy always told me to trust my local bank.

Dear Sir,

“My only question is, why are you in the privileged position to know exactly what is going on and we do not know it?”

Roelof

Uh, oh!!! Someone has found out about my “privileged position.” I watch other news other than what is fed as the evening slop at 6:30. I love the email below.

“I don’t think the US is anywhere near becoming a totalitarian country…”

Juan.

Welcome to the real world, Juan. The world of the 21st century. And another email reader below asks the most appropriate question. At least this fellow below knows what’s really important.

David,

“Where are you finding the cheap beer?”

Greg

ABCNEWS - “Not-So-Safe-Deposit Boxes: States Seize Citizens' Property to Balance Their Budgets” “Resources to Search for Unclaimed Property in Your Name”

“The 50 U.S. states are holding more than $32 billion worth of unclaimed property that they're supposed to safeguard for their citizens. But a "Good Morning America" investigation found some states aggressively seize property that isn't really unclaimed and then use the money -- your money -- to balance their budgets.” “Not-So-Safe-Deposit Boxes San Francisco resident Carla Ruff's safe-deposit box was drilled, seized, and turned over to the state of California, marked "owner unknown." "I was appalled," Ruff said. "I felt violated."

“Unknown? Carla's name was right on documents in the box at the Noe Valley Bank of America location. So was her address -- a house about six blocks from the bank. Carla had a checking account at the bank, too -- still does -- and receives regular statements. Plus, she has receipts showing she's the kind of person who paid her box rental fee. And yet, she says nobody ever notified her. " “They are zealously uncovering accounts that are not unclaimed," Ruff said. To make matters worse, Ruff discovered the loss when she went to her box to retrieve important paperwork she needed because her husband was dying. Those papers had been shredded.”

“And that's not all. Her great-grandmother's precious natural pearls and other jewelry had been auctioned off. They were sold for just $1,800, even though they were appraised for $82,500. "These things were things that she gave to me," Ruff said. "I valued them because I loved her." “Bank of America told ABC News it deeply regrets the situation…” “…Ruff is not alone. Attorney Bill Palmer represents her and countless other citizens in a class action lawsuit against the state of California. "They figured the safety-deposit box was safer than keeping it under the mattress," Palmer said. "In the case of a lot of citizens, they were wrong, weren't they?"

“California law used to say property was unclaimed if the rightful owner had had no contact with the business for 15 years. But during various state budget crises, the waiting period was reduced to seven years, and then five, and then three. Legislators even tried for one year. Why? Because the state wanted to use that free money.”

"That's absolutely correct," said California State Controller John Chiang, who inherited the situation when he came into office. "What we've done here over the last two decades has been dead wrong. We've kept the property and not provided owners with the opportunities -- the best opportunities -- to get their property back."

“Chiang now faces the daunting task of returning $5.1 billion worth of unclaimed property to people. Some states keep their unclaimed property in a special trust fund and only tap into the interest they earn on it. But California dumps the money into the general fund -- and spends it. "It's supposed to be segregated and protected," Palmer said.”

"California has taken all of that $5.1 billion and has used it as a massive loan." “California became so addicted to spending people's money, that, for years, it simply stopped sending notices to the rightful owners.”

“ABC News obtained a 1996 internal memo in which the lawyer for the Bureau of Unclaimed Property argued against expanding programs to notify rightful owners. He wrote, "It could well result in additional claims of monies that would otherwise flow into the general fund."

“Seizing More Than Safe-Deposit Boxes. It's not just safe-deposit boxes. A British man went to retire and discovered the $4 million in U.S. stock he had been counting on had been seized and sold for $200,000 years earlier -- even though he was in touch with the company about other matters. A Sacramento family lost out on railroad land rights their ancestors had owned for generations -- also sold off as unclaimed property. "If I had hung onto it, I would be a millionaire, multimillionaire," said John Whitley. "But that didn't happen because we didn't get to hold it."

“State Reforms. California's unclaimed property program was so out of control that, last year, the courts issued injunctions barring the state from seizing any more property until it made reforms.”

“…all 50 states pay private contractors 10 to 12 percent commissions to locate and seize accounts for them. It's an inherent conflict of interest: the more rightful owners are found, the less money the contractors make.”

abcnews.go.com/GMA/story?id=4832471&page=1

“Well, At Least We Can Trust The FDIC. Not”

“I made a deposit of $141,000 with IndyMac. Even though the limit for insurability was $100,000, I felt comfortable. No huge bank had been closed for many years. Three weeks later, IndyMac bank went belly-up. I found out the day of closing (a Friday in July) that the bank would return $100,000 and would pay back another $20,000 as a "dividend" at the direction of Federal Deposit Insurance Corp. The following week, an FDIC agent told me an IOU would be issued to me; as the bank's assets were sold, I would be first in line to receive the rest of my money.”

“A month later, I spoke to an FDIC agent in Dallas who told me it was very "unlikely" that I would receive any more money.”

“She said the FDIC had already decided how much it would invest in that bank's closure and all but said the IOU was worthless. I see IndyMac's assets being sold now, and the bank continues to conduct business as usual. But I have had no communication and it's looking grim. The government keeps throwing money at financial institutions, but obviously nothing is coming my way.” --

Jackie, Dallas finance.yahoo.com/banking-budgeting/article/108019/hair-raising-money-tales?”

Never would I have believed I would see the country moving so quickly down the path to obscurity. A trillion here. A trillion there. And things will always remain the same. Other countries love to purchase paper backed by nothing that is guaranteed to depreciate over time. Yeah, right.