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Have you protected your credit card against fraud?

Last updated on: May 10, 2013 08:25 IST

Have you protected your credit card against fraud?

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If not, then do it now. Buy a credit protection plan. Depending on the plan you buy such programmes protect you for up to a maximum of Rs 25 lakh in the event of misuse.

For Gajendra Vora (name changed) having four credit cards on him is an unnerving burden. It reminds him of an unpleasant incident that had put him in a precarious situation. Even today, he vividly remembers the day when his wallet was stolen.

He could not remember customer care numbers of all the banks. Consequently, he could not block or cancel all the cards immediately.

After a month, he received a credit bill of Rs 83,000, indicating that the thief had played the trick. He could do little but pay the entire sum to the bank. He has learnt his lesson hard: less knowledge is more dangerous. He has opted for a Credit Card Protection Plan (CPP).

CPP India Private Limited and One Assist offer card protection plans in India.

The author is a credit expert with 10 years of experience in personal finance and consumer banking industry and another 7 years in credit bureau sector. Rajiv was instrumental in setting up India's first credit bureau, Credit Information Bureau (India) Limited (CIBIL). He has also worked with Citibank, Canara Bank, HDFC Bank, IDBI Bank and Experian in various capacities.


Photographs: Tim Wimborne/Reuters

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CPP is a service that can be availed in the event of loss, theft and related frauds. You have to pay a small fee (premium) while signing for this service.

The fee (premium) is charged yearly and you are provided support in case your card is lost or stolen. After signing for this service, you have to intimate the service provider about the details of the cards -- credit, debit and ATM.


Photographs: Jonathan Bainbridge/Reuters
Tags: ATM , CPP

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In case of theft or loss, just call up the service provider and after verifying your credentials, all your cards are cancelled. Depending on the variant you have bought, CPP pays bills incurred on your card after loss even in the period before you intimate them. This, however, has some limit.

For instance, a basic variant of CPP pays bill up to Rs 50,000 incurred on your card lost before you could report the loss of your card.

Depending on the type of plan you buy CPP pays up to Rs 25,00,000 spent on your card after you report the loss of card to CPP India (One Assist also provides a similar service).

Thus loss arising out of fraudulent use of credit card is made good.


Photographs: Rick Wilking/Reuters
Tags: CPP India

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The biggest advantage of CPP is it pays for 'unauthorised' transactions carried out on all the cards registered, before and after the loss or theft of cards.

Many times, card holders and bank gets into a fight when they have to decide about the timing of an 'unauthorised' transaction.

Bank argues that it took place before the cardholder intimated the bank, whereas the card holder believes that the transaction took place after he intimated the loss of card to bank.


Photographs: Issei Kato/Reuters
Tags: CPP

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There are instances where such disputes lead to non-payment of 'disputed' amounts. This increases non-performing assets of banks and spoils credit reports of borrowers. CPP nearly eliminates such a situation.

CPP also assists you for emergency travel and hotel assistance. This is especially helpful if such theft or loss happens when you are travelling.

In some plans, you also get assistance for replacement of permanent account number (PAN) card and replacement of passport too. Depending upon the services offered CPP cost ranges from Rs 900 to Rs 1,450 per year.


Photographs: Jason Reed/Reuters
Tags: CPP , PAN

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