Anger after HSBC demands right to ‘snoop’ into safe deposit boxes of Hong Kong customers
Barrister accuses bank of imposing ‘totalitarian rights’, while HSBC says it is simply improving its defences against financial crime
A barrister has accused HSBC of trampling on the concept of personal privacy by demanding the power to snoop on customers’ safe deposit boxes and dump “offensive” items.
According to a letter sent to clients last month, a copy of which was obtained by the Post, the bank said that under new conditions of its leases for the lockers it had the right to dispose of any items it considered illegal, of an “offensive” nature or likely to be a “nuisance”, in any way it saw fit and without prior notice or consent.
The letter did not clarify what HSBC meant by “offensive” or “nuisance”, and did not explain under what circumstances bank staff would be able to inspect the boxes.
It asked clients to sign and return the letter within one month to confirm their acceptance of the updated conditions, so “we [HSBC] can continue providing you with the Safe Deposit Locker services”.
Barrister Neville Sarony, SC, said the updated conditions gave HSBC “totalitarian rights” over the contents of the boxes and offended against the concept of personal privacy. He said the effect of the terms was to give the bank a contractual right to open the boxes for inspection and deal with the contents at their absolute discretion.
“This is a ridiculous and grossly invasive power which makes a nonsense of the whole purpose of a safety deposit box,” Sarony said.
“Granting HSBC the unlimited right to snoop in your box and dispose of its contents without prior warning makes a total nonsense of the word ‘safe’.”
An HSBC spokesman confirmed the bank had updated the lease conditions of its safe deposit boxes for customers who acquired the service before December 2004 to keep its policy in line with lease conditions since then.
He said the nature of the safe deposit locker service meant it had the potential for “misuse for criminal purposes”.
“HSBC has a clear commitment to defend the integrity of the financial system against activities such as money laundering,” the spokesman said.
He added that conditions had been updated to strengthen the bank’s defences against financial crime and to facilitate cooperation with law enforcement agencies.
“We want to reassure … these changes to the terms and conditions will not in any way reduce the security and privacy of our safe deposit locker service.”
The changes also give HSBC the right to terminate a lease with immediate effect in the event of a client’s failure to comply with any of the conditions.
The spokesman stressed that only the client and his or her appointed representative would have access to the locker.
But the bank failed to provide affected clients with a copy of the old lease conditions for comparison, citing difficulties sourcing the previous terms and conditions, the Post has learned.
“Why they wouldn’t have a record of legal documents going back to this date is simply beyond me,” a client who received the letter lamented to the Post, saying he was worried that HSBC would terminate the lease on his locker if he failed to sign the letter.
“Would a customer’s collection of autographed pornography be considered ‘offensive’ by the bank and be disposed of?” he asked.
“Does it mean that the staff can now access any of our safe deposit boxes at will, rifle through our personal belongings and make a subjective decision of what they might consider ‘offensive’ and then dispose of the items without our consent?”
He said his confidence in HSBC had been badly shaken.
Safe deposit boxes are in short supply, with long waiting queues at most banks, which charge up to HK$20,000 a year for the service. It was reported a number of years ago that some clients had used them to store the ashes of relatives.
A spokesperson for the Consumer Council said banks should consider providing guidance with relevant examples to demonstrate the rationale for the amendments, and give ample time for customers to make informed decisions.
A Hong Kong Monetary Authority spokesman declined to comment on individual cases but said the authority expected banks to be highly transparent in their dealings with customers, and “treat all customers fairly at all stages of their relationship with the banks”.