Tuesday, April 12, 2011

California Seizing Property from Safety Deposit Boxes: Outrageous

As reported by ABC News, what started out as a program to hold unclaimed property, such as the contents of safety deposit boxes owned by people who have moved away without a forwarding address, has gone wildly out of control. The program is now using the flimsiest of excuses to drill safe deposit boxes and sell the contents, often for below-market value, the proceeds going to the state’s general revenue.

In a case reminiscent of the Monty Python organ donor skit (or perhaps the movie Repo Men), a San Francisco woman’s jewelry appraised at over $80,000 was sold even though she lived a few blocks from her bank, had not moved, and was current on all of her box rental feeds. In another case, a man’s retirement savings consisting of $4 million of stock certificates were sold; and “A Sacramento family lost out on railroad land rights their ancestors had owned for generations”.

The program began life as a place to hold unclaimed property for up to 5 years while the state made attempts to locate the owner. Both the holding period and the efforts to locate the owner have diminished over time. ABC news indicates that there have been internal debates within the state on these changes, with an internal memo objecting to efforts to to find the owners on the grounds that “It could well result in additional claims of monies that would otherwise flow into the general fund.” (read more)