Hong Kong's high property cost has hit the banks leaving consumers with a diminished choice in the use of safe deposit box service.
This has led to a supply shortage in some prime locations as well as deposit boxes of the large size.
To assist consumers to cope with the situation, the Consumer Council has conducted in April a market survey on banks in provision of such service. Information was collected from 18 banks for analysis.
According to the survey, the cost for a safe deposit box varies depending on size - and location. Rental fees are charged annually, with rather substantial price variations.
For instance, the smallest box (600 cubic inch or below) was charged between $240 and $990 a year. The fee for the largest box (2,200 to 2,400 cubic inch) ranged from $1,000 to $3,250 annually.
With the exception of 2 banks, most would require consumers applying for safe deposit service to open an account with them - for the convenience of paying the annual rental. Consumers opening such an account are reminded to take due care of potential bank charges arising from low balance and inactive account in future.
Another bank charge that could arise is in the event you report loss of one or both of the two keys (1 main key and 1 spare key). For loss of one key, 16 banks will charge from $100 to $450; for loss of both keys, all banks in the survey will levy between $200 and $1,500 per box in addition to the locksmith charges for opening the box (by 4 banks).
A safe deposit box is clearly a good choice to give you the peace of mind that your valuables will be safe in the security of a bank vault and not be stolen from your home.
Though this is very rare, banks do get robbed. There is also no guarantee that the contents in your safe deposit box will not get damaged or missing, for one reason or another.
So, what protection there is for consumers of safe deposit box service. The survey showed that typically, most banks will disown responsibility for any loss or damage unless it can be proven that they are at fault.
16 banks responded that unless it is due to fraud, willful default or negligence by bank employees or agents, the banks do not assume any responsibilities for any loss or damage to the contents.
One bank indicated that it will not be held responsible for any damage due to such uncontrollable conditions as wear and tear, typhoon or fire, war or earthquake, etc. Another bank undertook to handle on a case-by-case basis.
For additional protection, consumers will do well to take out insurance to cover the items in the safe deposit boxes - as recommended also in the rental agreements of 18 banks.
The survey showed that not all banks provide safe deposit box service in every district, varying in the number of branches that provide such service from only 2 to as many as 78.
The total occupancy rate of deposit box service, according to 13 of the banks, was between 50% to 95%. This means that the occupancy rate with some banks or in some districts is generally lower; consumers may find it easier to turn to them for service.
For other alternatives, consumers can consider the option of a home safe or buying household content insurance for their valuables. The Crime Prevention Bureau of the Hong Kong Police Force has this advice to consumers:
- Follow the manufacturers' instructions in installation of a safe. And do not leave the keys in the keyholes or nearby.
- Consider the use of extra security measures such as burglar alarm system or access control system.
There now exists on the market a couple of private corporations offering safe deposit box service. But consumers are strongly advised to assess the risk involved.
In general, the private corporation acts as trustee, the contents in the safe deposit box are not the assets of the corporation. If the corporation goes into liquidation, consumers have to prove to the liquidator they are the owner of the items.
Furthermore, consumers should study and clearly understand the rental agreement and its charges as well as its responsibilities and insurance coverage (if any) for loss or damage to the deposit box contents.
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