How to deal with loss of credit/debit cards and online frauds?

Private banks are offering third-party services like blocking lost cards, settling hotel bills, buying air tickets if the customer is in another city when he/she lost the card


The push for such services becomes even more relevant at a time when banks are already in the process of beefing up card security for customers who have been impacted by the recent data breach allegedly involving 3.2 million cards. Photo: Pradeep Gaur/Mint
The push for such services becomes even more relevant at a time when banks are already in the process of beefing up card security for customers who have been impacted by the recent data breach allegedly involving 3.2 million cards. Photo: Pradeep Gaur/Mint

Mumbai: Leading private sector lenders have been actively asking their customers to sign up for third-party services to protect their wallets in case of loss or theft.

Five private sector lenders, including HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and IndusInd Bank, have been actively selling the offerings of service providers such as SBI Cards Pvt. Ltd and Oneassist Consumer Solutions Pvt. Ltd to ensure that customers are insured against loss of wallet and receive emergency cash in distress situations.

Call centres of these private sector lenders are reaching out to customers through in-bound calls and advertising these products, allowing them to insure themselves against loss of wallet or cases of phishing or other online frauds.

While banks have had these products available for some time, they have recently started proactively marketing them.

The services include blocking cards lost with one phone call, settling hotel bills and buying air tickets if the customer is in another city when he/she lost the card.

Over and above, these products also reimburse customers in case of fraudulent transactions, depending on the package they buy.

SBI Cards, through its card protection plan (CPP), and Oneassist, through its product wallet assist, also give customers some handy cash, which they can use to take care of themselves till they are back in their home town.

These funds are extended to customers in the form of an interest-free loan, which they must repay within a stipulated period once they are back in town. These protective services are offered at an annual fee ranging between Rs.1,599 and Rs.2,499.

“These are types of in-built insurance services which is now offered on plastic products. Banks are not in the business of insurance, which is why we offer these third party services,” said Puneet Kapoor, senior executive vice president, Kotak Mahindra Bank.

According to Kapoor, his bank is proactively selling these to its debit card and credit card customers.

Axis Bank, too, is in the process of marketing these third-party products to its customer base, while also offering premium cards which have these services enabled from the get go.

Sangram Singh, head of card and payments at Axis Bank, said that the private sector lender also allows its customers to adjust key usages of their debit and credit cards to ensure that they are in control of the amount that is spent on them.

Apart from offering these protective services, these private sector banks are also actively educating their customers on how to protect themselves against online frauds and scam phone calls where customers are asked to divulge sensitive banking information.

According to an ICICI Bank spokesperson, the bank has been conducting a safe banking campaign through text messages, emails and social media posts to reach out to its customer base, for this purpose.

“The bank has engaged with the reputed anti-phishing agency to proactively detect and bring down phishing sites as soon as they are detected,” the spokesperson said.

The push for such services becomes even more relevant at a time when banks are already in the process of beefing up card security for customers who have been impacted by the recent data breach allegedly involving 3.2 million cards. SISA Information Security Pvt. Ltd is conducting a forensic investigation into the matter to determine the impact of this data breach and see what level of customer information has been compromised. The report is expected to be submitted this month.

As a consequence of this data breach, State Bank of India (SBI) had announced that it will be replacing up to 600,000 cards. However, most other large banks have shied away from such a drastic step.

Replacing a plastic card due to data breaches could cost the bank over Rs.100, Kapoor of Kotak Mahindra Bank confirmed. As the extent of the impact is unknown as of now, the private sector lenders haven’t initiated a card replacement programme yet.

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