Rahul was at a popular mall in the city, when, just as he reached for his wallet to pay for his burger and fries, discovered that his pocket had been picked. Result: all his credit and debit cards as well as his PAN card were gone!

But he did not panic and dialled a toll-free number and within minutes all his cards were blocked and safe-guarded from fraudulent use. He was also assured that the procedure for issuing a new PAN would soon be set rolling. Wondering how all this was done in a jiffy?

Welcome to the world of card protection plans!

Many private sector banks in India, such as ICICI, Citi, Axis, Kotak Mahindra, Standard Chartered and HSBC offer card protection plans to customers.

Of course, there are intricacies to how this scheme works, but the process of buying a cover is pretty simple.

Covering fraud

With extensive use of plastic money, especially credit cards, there is also increased risk of theft and resultant loss to the card owner. If you own a bunch of credit and debit cards from different banks, then the problem multiples.

You have to dial up dozens of numbers to block all the cards and protect yourself from theft.

In order to address this problem, banks have tied up with CPP Administrative services (CPP), an independent third party, to offer card protection plans to customers. Now there are several benefits of availing card protection apart from just protection against fraud.

With a call to CPP on a toll-free number, you can have all your lost cards blocked from misuse at one go. You would also be covered for fraudulent transactions on your card in the range of Rs 10 to Rs 25 lakh, depending upon the choice of plan – classic, premium or platinum. This is after you notify the loss to CPP.

Misuse of stolen or lost card, seven days prior to informing CPP too is covered, though the cover is in the range of Rs 50000 to Rs 1,50,000.

But what if you have lost your cards while on work or travel in India or even abroad?

Here again, all that needs to be done is to call the toll-free number to report the loss. There are other benefits too if you are a CPP member. When you lose the cash and cards, CPP gives you cash assistance for buying a replacement ticket and also for paying your hotel bills.

This ranges from Rs 40,000 to Rs 1,60,000 for hotels, depending on the type of cover you take and also whether you are stranded within India or overseas; the same range applies for replacement tickets as well.

Added benefits

Registering for credit card protection is pretty straightforward. You can approach the bank of which you hold a card for availing a protection plan. Most of the banks mentioned earlier allow you to buy a membership online too. Payments can also be made through a Mastercard or a Visa card. The cost of the CPP ranges between Rs 1,100 and Rs 1,745 per annum for single membership and Rs 1,745 to Rs 2,645 for joint applications, in case secondary cardholders too need to be added.

CPP also allows you to register details of your passport, mobile phone, driving license, PAN card or any other valuable document.

In case any of these are lost, all details would be safely held with CPP so that you can get in touch with relevant authorities for issuing a duplicate.

CPP also helps in blocking your mobile phone and SIM in case it is lost, which minimises any misuse to a great extent.

As mentioned earlier, CPP Administrative services is an independent third party with which banks have tie up for offering card protection plans. It would handle all cases and any monetary claims made.

However, there are important points that you need to note.

All cash advances, which are interest-free, have to be repaid within 28 days to CPP. Loss of card must be reported within 24 hours of discovering it; in case the card has been used fraudulently, the relevant statement must be produced for making claims and so forth. It is also important to note that cash advances are also made subject to the person having a reasonably good credit history.

CPP is a fairly entrenched player in the business, especially in the UK, where it has been around for 30 years. There the cover is quite advanced.

When there is a loss of home or car keys, cost of opening the house with the help of a locksmith and even the cost of a wallet or a handbag that was stolen or lost is covered.

For a small annual premium, it may thus be seen that the benefits are substantial.

So, the next time you think of taking a new card, ensure that you take a cover so that you don't have to sweat to safeguard it all the while.

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