As instances of credit and debit card thefts is on a rise, users need to be aware of the fact that if unreported, the liability on the amount of financial loss on their credit cards would rest on them. However, in the event of the death of the customer and any misuse of the card after that, like what happened in Delhi recently, where two women allegedly lost their lives at the hands of robbers, banks say that they would not go to the customer's family to recover the amount.
"As a gesture we won't go for recovery to the individuals family and I think that no bank will seek recovery in such case," said an official from a private bank on conditions of anonymity. However, banks set customers liable for any loss on card prior to discovery of card loss.
There are however means where the customer can transfer the risk of any financial loss on the credit card. There are insurance covers available with certain cards, which cover the pre discovery fraud loss on credit cards.
Citibank and HSBC offer the pre discovery fraud loss on their cards in partnership with CPP Assistance Services. It covers losses upto 24 hours prior to the notification of card loss.
These are available on select cards and also the cover is only upto several hours before the reporting of card loss," said Harsh Roongta, CEO, Apnaloan.com.
This means that if the cover is upto 12 hours prior to reporting of card loss then if the card is lost at 7 AM in the morning, and he reports the card loss at 9 PM the same day then any financial loss between 9 AM and 9 PM will be covered. Reserve Bank of India has been laying emphasis on banks to provide the pre-discovery fraud loss cover on their cards, said the bank official.
Also, RBI has asked the banks to put in place a system where the system will ask for one additional information that is not available on the card to validate the transaction. "This will make the online credit card transaction secure going forward," said Roongta.
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