Credit and debit card fraud is at an all-time high in India, with over 50,000 such instances reported in FY2020 alone. While these were the reported cases, experts predict that the actual number of fraudulent transactions may be much higher.
- According to the same report, the amount involved in these transactions equalled around Rs.230 crore.
- Maharashtra, Tamil Nadu and Haryana registered a majority of such cases in the last three years.
Therefore, imposing safeguards is currently the best way to keep one’s credit cards, debit cards and other online banking details secure. One of the key steps that an individual can take to strengthen financial security in the face of these fraudulent activities is to opt for a card protection plan, also known as a card insurance policy.
What are credit card and debit card insurance plans?
As one may guess, a card protection insurance plan refers to a financial contingency against fraudulent transactions, involving a policyholder’s credit cards and debit cards. Such an insurance policy ensures that a cardholder does not face financial liability if such an unfortunate event occurs.
- In 2019, around 1.3 million credit and debit card details were leaked online. Around 98% of these cards belonged to Indians.
A card protection plan reimburses any losses which an individual may suffer because of fraudulent activities through one of their payment cards.
Benefits of availing a debit or credit card protection insurance policy
Individuals purchasing a payment card insurance policy can enjoy the following features and benefits –
- Hefty sum insured
While credit cards come with a limit imposed on the utilisable amount, debit cards do not. One can use debit cards to withdraw all of the available savings from that associated account. Thus, when scammers steal your debit card information, your losses rack up very quickly.
Fortunately, a card protection plan generally comes with a substantial sum insured. You can claim this amount as compensation if you experience any losses due to fraudulent activities. For instance, Wallet Care, provided by Bajaj Finserv under its Pocket Insurance & Subscriptions, comes with a sum insured of Rs.2 lakh.
- Nominal premium rates
Affordability is often a big concern when it comes to insurance policies. Fortunately, such a card protection policy is offered at reasonable rates. Individuals can avail enormous value for their money, ensuring that the policy premium never becomes too much of a burden.
- Remote card blocking facilities
If you lose your credit or debit card, the first thing you need to do is block the same to prevent further usage. Doing so immediately will prevent any fraudulent transactions from taking place. Nevertheless, some financial institutions require you to visit their premises physically to implement such a block on your cards, which is a time-consuming process.
A wallet protection plan allows you to place a block on your lost or stolen cards simply by dialling a customer care number. This faster and more convenient process ensures that all transactions cease as soon as you find your card missing. Furthermore, a fraudulent charges cover can help you seek adequate compensation for any illicit transactions that may have ensued by the time you block your credit or debit cards.
- Financial assistance during your travels
Individuals may end up losing their credit or debit cards while on a trip. This can leave them stranded in unknown locations without being able to pay for their way back home. Most card protection plans ensure financial assistance if such a thing happens, with emergency cash benefits. A Road Trip Protection plan offered by Bajaj Finserv under its Pocket Insurance & Subscriptions can also help in such instances.
Following safety guidelines to avoid fraudulent transactions
Even with the necessary card protection plan in place, one needs to keep a few safety guidelines in mind while making payments through cashless mediums. Cardholders often fail to maintain proper safety standards, which, in turn, lead to the leakage of their confidential financial information.
- 52% of the 7500 respondents in a survey claimed that they shared addresses and phone numbers online.
- 26% of them even shared their one-time passwords with others.
- A whopping 22% claimed that they shared debit and credit card PIN details with others.
One should follow these healthy practises to maintain debit and credit card safety –
- Keep credit and debit card PIN confidential – Fraudsters often impersonate employees of financial institutions and call customers. They can persuade you into revealing your card number, account details and even PIN or CVV. Ensure you never disclose such sensitive data over the phone to anybody.
- Inform suspicious transactions immediately – If you notice any suspicious activity in your credit card monthly statements, inform the issuer immediately. Also, take steps to block the card in question immediately to prevent further unauthorised transactions.
Following these measures, along with owning a card protection plan, should be enough to limit any losses caused by fraudulent activities. In some events, you can even recover most of these losses if you take proper precautions beforehand.