Fraud protection cover?

frivolous_fay

My instinct is not to accept any service from a bank or credit card company that costs me money. I don't go for card protection, or payment protection, or any of that dross.

Here's a new one to me which left me wondering. I rang to activate my A&L card, and was duly bored by about 10 minutes' worth of statistics about how much identity fraud costs businesses and individuals in legal fees, time and expenses... oh, and how easy it is to get copies of your birth certificate, and personal details from the electoral role. The crux of that was trying to get me to sign up to fraud protection cover at £59.99 a year. (Covers legal expenses and puts you on a register where you have to know a secret password to get credit in your name.)

£59.99? No chance, I thought. But SHOULD I be worried enough about identity fraud to consider paying that kind of money for legal cover, etc.? I'm fairly careful about sensitive documents, and I suppose I believe that if fraudulent (for example) interest-free credit on a TV was opened in my name, it would be straightened out and I wouldn't be left out of pocket. Is this naive?

Is this just another rip-off product, or something I ought to be considering?

Rafter

It is a rip-off product!

Under the consumer credit act and chip and pin regulations unless you are woefully negligent you wouldn't be liable for identity fraud.

Identity fraud can be a real pain to sort out for sure, but most decent organisations will put you on the register A&L are talking about once you have been a victim anyway.

I'm sure that A&L are making a 75% commission on sales of this unnecessary insurance and that if you were really worried you could get similar cover somewhere for less than £20 a year. Given your first sentance though, doesn't sound like it is worth it - better to invest in a decent shredder!

R.

frivolous_fay

I'm disappointed to note that smile (my main bank) are also offering the service at the same fee.

I did say to the lady on the phone that I thought it was the kind of service that should automatically be provided. She was very persistent and persuasive!

Rafter

I'm surprised Smile are offering it too.

Problem is, ethical banks and organisations like smile, co-op and Nationwide all have to 'swim in the same pond'

If the commercial banks are making money out of this kind of product, and customers are willing to pay for it, then they can offer better interest rates, spend more on marketing or invest in better customer service (ha ha).

If co-op etc don't follow suit they are at a competitive disadvantage.

Smile and First Direct don't make that much money to be honest. They tend to have customers who look after their money, don't go overdrawn all the time, don't earn the bank many fees etc and demand good service, UK call centres and good rates of interest.

I guess they are just trying to make a bit more, and can't fault them for trying - just a shame it is with such a poor value and unnecessary product!

R.