Thanks to the convenience they offer, many well-heeled Indians stuff their wallets with a plethora of cards these days. In addition to plain-vanilla cards, there are the co-branded ones promising offers and reward points for shopping, fuel recharge, air travel and much more. The temptation to make use of the cards, therefore, is hard to resist. At the same time, this tendency to hoard cards also makes you vulnerable to the threat arising out of stolen cards. For instance, the stolen card can be used to swipe while making purchases at merchant establishments or cloned (duplicated).
Acknowledging this lurking danger, some card issuers offer in-built insurance cover against such frauds, particularly for holders of high-end credit or debit cards. Offering a zero-liability cover with premium category debit cards too is becoming common. Several banks including ICICI Bank, HDFC Bank, Axis Bank and HSBC are offering this feature now. This facility, for which the debit card holder does not have to incur additional charges, undertakes to reimburse fraudulent purchases made by swiping a stolen debit card at point of sale terminals. In most cases, ATM and online transactions do not fall in the ambit of this protection. The extent of the cover, de-pending on the bank, ranges from . 1-2 lakh.
Then, there are specialised covers, like the ones offered by CPP Assistance Services (the group insurance cover is provided by Bajaj Allianz). It can be purchased directly from this company as well as through banks like Citi Bank, Axis Bank, ICICI Bank and HSBC who have tied up with CPP. In the event of your card being lost or stolen, you need to inform CPP through its toll-free number. You do not need to inform individual card issuers about the loss. Depending on the plan selected, the cover could go up to . 1 lakh prior and . 20 lakh post-intimation. You may have to shell out an annual fee ranging from . 995 to . 1,295, depending on the cover chosen. However,the plan does not cover online frauds. Also, it is activated only if the card is lost or stolen. But largely, the risk of card frauds in the online space has come down due to the Reserve Bank of India's (RBI) insistence on two-factor authentication for such transactions. Tata AIG General Insurance too has stepped into this space and is offering fraudulent charges cover. Here, your card is insured against the misuse of credit or debit cards. The protection is extended for up to 12 hours prior to reporting the loss. Again, frauds pertaining to cash advances made using the card will not be covered.
In short, while these products seem like the perfect solution tothe ever-present risk of frauds, it is best to go through the list of exclusions (conditions under which your loss will not be reimbursed) before buying one.
