The growing use of plastic money has not only made lives
simpler, it has also given rise to concerns around its possible misuse.
Cases of lost or stolen cards being misused by fraudsters are on the rise, creating insecurities in the users' minds.
However, since use of credit or debit cards is simply unavoidable today, the solution lies in being cautious and taking steps to contain any damage due to fraud. Now, in the virtual world, such concerns have been addressed by the Reserve Bank of India through the two-factor authentication system. Recently, the central bank has floated the idea of a zero liability policy in the offline space, too; but no regulatory framework has come into being so far. At an individual level though, you can protect your cards by choosing from various products and services available even now.
Here are a few measures you can consider to safeguard your cards in the physical world:
Opt for cards with in-built protection
Several card - debit as well as credit - issuers offer some form of in-built protection to their customers. This could either be in the form of a zero liability facility where the holder is exempted from the liability of card misuse, or a bundled insurance cover that gets triggered in the event of a fraud.
Typically, such facilities come with some high-end cards. For instance, HDFC Bank's Titanium Debit Card offers a zero liability facility on fraudulent point-of-sale usage on lost or stolen cards. bundled insurance HSBC's Platinum Credit Card variants offer insurance, through ICICI Lombard, against lost card and online frauds. The holder does not have to pay any additional premium for the purpose.
However, most premium category cards levy joining and annual membership fees, which in case of HSBC's Platinum Credit Card are Rs 6,000 and Rs 2,000, respectively. Similarly, high-end debit cards may be issued only to those who maintain a healthy balance in their savings account. You also need to ensure that you scrutinise the terms and conditions, particularly, the exclusions in the cover carefully.
"In-built insurance covers are beneficial for a customer who doesn't
carry multiple cards in his wallet as these services protect a single
card (one used to buy the insurance) on fraudulent loss," says Ian
Craig, MD, CPP India.
"Also, don't confuse these covers with credit protection insurance or purchase protection insurance. The former usually kicks in upon the death or disability of the holder, and not on loss. Same is the case with purchase protection insurance, which insures goods bought on the card against theft."
"Also, don't confuse these covers with credit protection insurance or purchase protection insurance. The former usually kicks in upon the death or disability of the holder, and not on loss. Same is the case with purchase protection insurance, which insures goods bought on the card against theft."
Buy insurance
An alternative to bundled insurance schemes offered along with cards is buying insurance directly from the provider - the insurance company. However, not many insurers sell such policies to individuals, preferring to take the bundled route instead. Tata-AIG General Insurance is one of the companies that offer such products directly to the end-user under its personal identity protection basket.
The cover extends protection up to 12 hours prior to reporting the loss of the card. "The plan, which is sold directly to retail individuals, insures you against fraudulent use of your lost or stolen credit card," says Gaurav Garg, CEO & MD, Tata-AIG General Insurance. Again, don't forget to study the exclusions. For example, fraudulent transactions related to cash advances are not included in the product's scope of coverage. Likewise, misuse post reporting of the loss will not be covered.
Sign up for independent protection plans
The third option is to enroll for standalone card and identity protection plans from companies like OneAssist and CPP India by paying an annual fee. Consider this: you are stranded in the middle of a trip, with your wallet, cards, mobile phone and other belongings stolen and not a single penny in your pocket. In such a scenario, you will not be in a position to call up any card issuer to block your cards.
By the time you return and get hold of all the numbers, chances are that the fraudster would have already made merry with your card and cell phone. This is where such protection plans can come into the picture. "From a customer's perspective, such disruptions can cause an enormous amount of pain. They could be in a situation where they do not have access to anyone and may not recall all the numbers of their banks.
Besides, they may not remember all the cards or other important documents that the lost wallet may have contained. There is a concern that they may not have blocked some cards, leaving these vulnerable to misuse. Under our plan, we block all cards once the customer intimates us from wherever he/she may be across the globe - the customer will not be liable for any misuse thereafter," says Gagan Maini, co-founder and director, OneAssist. The firm also helps users wipe out or retrieve any sensitive data on lost smartphones, besides offering protection against misuse of SIM.
Plans offered by both CPP and OneAssist also offer emergency assistance services like clearing hotel bills or meeting travel expenses until the plan holder reaches home. The user is required to call up the helpline number, after that the company takes over the damage control task. Both the firms' fraud protection cover, offered through a group insurance package, starts from seven days prior to reporting of the loss.
"In case of card loss or theft that may have occurred anywhere in the world, the customer would need to call our 24-hour helpline to report the loss. We, in turn, will notify the customer's banks and card issuers and help cancel the cards which have been reported as lost," explains Craig of CPP India. Remember, misuse using cloned cards and fraudulent Internet transactions are not covered under these plans.
While all these offerings may seem like perfect antidotes to misuse of cards, you would do well to read the fine print carefully to identify the one that suits your needs the best.
An alternative to bundled insurance schemes offered along with cards is buying insurance directly from the provider - the insurance company. However, not many insurers sell such policies to individuals, preferring to take the bundled route instead. Tata-AIG General Insurance is one of the companies that offer such products directly to the end-user under its personal identity protection basket.
The cover extends protection up to 12 hours prior to reporting the loss of the card. "The plan, which is sold directly to retail individuals, insures you against fraudulent use of your lost or stolen credit card," says Gaurav Garg, CEO & MD, Tata-AIG General Insurance. Again, don't forget to study the exclusions. For example, fraudulent transactions related to cash advances are not included in the product's scope of coverage. Likewise, misuse post reporting of the loss will not be covered.
Sign up for independent protection plans
The third option is to enroll for standalone card and identity protection plans from companies like OneAssist and CPP India by paying an annual fee. Consider this: you are stranded in the middle of a trip, with your wallet, cards, mobile phone and other belongings stolen and not a single penny in your pocket. In such a scenario, you will not be in a position to call up any card issuer to block your cards.
By the time you return and get hold of all the numbers, chances are that the fraudster would have already made merry with your card and cell phone. This is where such protection plans can come into the picture. "From a customer's perspective, such disruptions can cause an enormous amount of pain. They could be in a situation where they do not have access to anyone and may not recall all the numbers of their banks.
Besides, they may not remember all the cards or other important documents that the lost wallet may have contained. There is a concern that they may not have blocked some cards, leaving these vulnerable to misuse. Under our plan, we block all cards once the customer intimates us from wherever he/she may be across the globe - the customer will not be liable for any misuse thereafter," says Gagan Maini, co-founder and director, OneAssist. The firm also helps users wipe out or retrieve any sensitive data on lost smartphones, besides offering protection against misuse of SIM.
Plans offered by both CPP and OneAssist also offer emergency assistance services like clearing hotel bills or meeting travel expenses until the plan holder reaches home. The user is required to call up the helpline number, after that the company takes over the damage control task. Both the firms' fraud protection cover, offered through a group insurance package, starts from seven days prior to reporting of the loss.
"In case of card loss or theft that may have occurred anywhere in the world, the customer would need to call our 24-hour helpline to report the loss. We, in turn, will notify the customer's banks and card issuers and help cancel the cards which have been reported as lost," explains Craig of CPP India. Remember, misuse using cloned cards and fraudulent Internet transactions are not covered under these plans.
While all these offerings may seem like perfect antidotes to misuse of cards, you would do well to read the fine print carefully to identify the one that suits your needs the best.
Source : http://economictimes.indiatimes.com
No comments:
Post a Comment