Why Credit Card Protection Plans? Plastic swipes are rising fast. According to figures with the Reserve Bank of India (RBI), the volume of transactions made through credit cards increased by 34.6 per cent in 2007-08 over 2006-07. In terms of value there was an increase of 40.2 per cent in the same period. Credit cards is the most common way in which Indians make payments over the Internet, is what a recent Nielsen Global Online survey on Internet habits found. The survey figures say that 84 per cent Indians prefer paying through credit cards than any other mode, the highest for any Asia Pacific country.
So, there’s no doubt that we have taken to credit cards in a big way. But with convenience comes being vulnerable to misuse. If you have two or three cards, not uncommon these days, and have lost them, it is excruciatingly painful to call all the respective banks. Of course, you also need to remember all the necessary numbers. If you don’t have this information, the soup you are in just gets thicker. The situation worsens if the credit cards are misused.
In most cases, the misuse is spotted only when the individual gets the monthly bill. Banks take liability of any damage only after the matter has been reported to them. Any damage caused before the bank is informed, is to be borne by you. This is where a credit card protection plan comes to your rescue.
Card Protection Plan
The plan has been recently launched in India by CPP Assistance Services, a part of CPP Group Plc, the UK. How it works is that in case of a card loss or theft that may have occurred anywhere in the world, the subscriber needs only to call CPP’s 24-hour toll free helpline number to report the loss or theft. CPP will, in turn, call all the card issuer(s) and help cancel the card(s). “The cardholder is thus saved in this distressful scenario from calling all issuing banks separately. They just need to call one number, the CPP helpline,” says Gagan Maini, CEO, CPP India.
Peace of mind is an important aspect of card ownership, says Sandeep Bhalla, business manager (cards), Citibank India. “It is this that led us to offer cardholders enhanced fraud prevention and protection features,” says Bhalla.
While new to India, card protection has been prevalent in developed markets for a long time. Says Miani: “With more plastic in people’s wallets and increased usage, instances of card loss are on the increase and card protection becomes extremely relevant. We believe our entry into India is very timely.” At present four banks in India—Citibank, Standard Chartered, HSBC and Kotak Mahindra Bank—have tied up with CPP India to offer this service. While cardholders (debit/credit) of these banks can avail the new service from the banks, cardholders of other banks can buy the service directly from CPP India (see Shield For Your Cards).
Figure are in Rs *This cover beings 7 days prior to notification
Becoming A Member
Once you have paid the membership and the payment has been confirmed, you will receive the welcome pack, typically within a week. The pack contains a confirmation letter that outlines your membership details and a registration form in which you have to fill in all your card details. Other things included in the pack are a list of benefits that you will be entitled to and CPP contact numbers.
The membership is valid for one year and can be renewed annually. However, if after becoming a member you realise that you do not want the service, you have a 30-day cooling period within which you can cancel the membership and receive a refund, provided no claims have been made.
What Is Covered
There is no cap on the number of cards that you can register for protection. You can choose to register all your financial and non-financial cards such as membership/loyalty cards as well as other valuable documents such as driving licence, passport, PAN card and any financial certificates. “All cards belonging to a customer are covered under one membership only,” says Maini.
Should You Take It?
Apart from the benefit of having to call just one number to block any number of cards, there are other benefits of opting for a card protection plan. For instance, if you lose a card while travelling within India or abroad, CPP will arrange to advance your payment to your hotel as well as arrange for tickets to help you return home. Also, if your passport is stolen or lost while you are traveling abroad, CPP will provide help with the necessary contact details so that you can contact the relevant Indian embassy or high commission.
With a host of benefits available at less than Rs 3-4 a day, you are assured of complete peace of mind. (See The Cost of Safe Swipes).
Not only for individuals, CPP India has a plan for the whole family as well. Says Maitri Kumar, head (marketing), HSBC India, one of the banks to make use of CPP India’s services: “In case of a family, it may be prudent for a cardholder to register all cards of the spouse or family member as part of the joint plan. Both members can avail similar benefits individually also.”
Loss Of Card
So, what exactly do you need to do if your card is lost? Just call up CPP India’s toll free number. This is open 24×7. If you have any claim to make, ask the customer service department to send you a claim form. The claim form needs to be completed with as much detail as possible and returned to CPP India with all original documents, not photocopies, for processing. All claims must be sent not later than 28 days from the date of reporting the card loss.
While the RBI is doing its bit to make online transactions safer, especially when it comes to use of credit and debit cards (see Safe On The Net, 11 March 2009), the new card protection service from CPP India makes a lot of sense. After all it’s a small price to pay for the convenience it offers.