What is happening to card protection insurance?

BaronJustwit

I have just been notified by Barclays Bank that my card protection policy will no longer cover "unauthorised use" prior to the card issuer being informed that it has been lost/stolen. I contacted Sentinel Gold who are competitors in this field and they told me they had heard that CPP (the insurers that Barclays use) have taken the unauthorised use off the insurance and that they themselves are reviewing their policy and may well remove it from theirs as well.
This means that the banks appear to be issuing credit/debit cards that are so usecure that they cause enough money to be lost that insurers are backing away from insuring losses. So, if, say, my pocket is picked, with modern technology the pin number could be read and the card used fraudulently within minutes if not seconds of the theft and I am not covered for the loss.
Has anyone else come across this and is there a fix???

meer53

The fix is to make sure that you know where your card is and that your PIN number is not recorded anywhere.

What modern technology are you referring to that can read PIN numbers ?

Each fraud case is looked at individually and in some circumstances the card issuer will not hold you liable for losses incurred before the card is reported as lost or stolen. Depends on what has happened. If you have a genuine reason for not reporting it straight away they will take this into account.

zagfles

You don't need insurance to cover you for unauthorised use! If someone fraudulently uses your card you're not liable unless you were grossly negligent, and even then only for the first £50 on a credit card.

Of course if they think you authorised the transaction or were a willing party to the fraud, you will be liable, but in those cases no insurance would pay out.

I think these terms are being dropped from the "card protection" policies because they are useless. See this: http://www.fsa.gov.uk/static/pubs/final/card-protection-plan.pdf

meer53

zagfles wrote: »

You don't need insurance to cover you for unauthorised use! If someone fraudulently uses your card you're not liable unless you were grossly negligent, and even then only for the first £50 on a credit card.

Of course if they think you authorised the transaction or were a willing party to the fraud, you will be liable, but in those cases no insurance would pay out.

I think these terms are being dropped from the "card protection" policies because they are useless. See this: http://www.fsa.gov.uk/static/pubs/final/card-protection-plan.pdf

The insurance offered was for transactions made BEFORE the card is reported lost or stolen. Banks will normally hold a cardholder liable for any fraud which takes place before they report it. This insurance made sure they were paid out for this.

You have never been held liable for fraud which takes place AFTER the card is reported as missing. Unless there has been negligence as you state.

dalesrider

meer53 wrote: »

Banks will normally hold a cardholder liable for any fraud which takes place before they report it.

That will depend on the situation. But more often that not fraud before the loss is reported is refunded.

meer53 wrote: »

You have never been held liable for fraud which takes place AFTER the card is reported as missing. Unless there has been negligence as you state.

Any fraud after card reported lost, would be a fault by the bank to stop the card

zagfles

meer53 wrote: »

The insurance offered was for transactions made BEFORE the card is reported lost or stolen. Banks will normally hold a cardholder liable for any fraud which takes place before they report it.

Complete rubbish, as the FSA noted in section 3.15 of the link I quoted.

Pre-notification cover
3.15.
As explained above, one feature of Card Protection was “pre-notification cover”. Pre-notification cover provided customers with up to £5,000 of insurance for unauthorised transactions which occurred before they notified CPP that their cards were lost or
7
stolen. However, cardholders are not liable for more than the first £50 if the transaction falls within the Consumer Credit Act 1974 (which is very often the case and so this aspect of cover was of very limited value). Further, for transactions that are not covered by that legislation, the customer is only liable for more than the first £50 if they have been “grossly negligent”.

dalesrider

BaronJustwit wrote: »

This means that the banks appear to be issuing credit/debit cards that are so usecure that they cause enough money to be lost that insurers are backing away from insuring losses.

Has anyone else come across this and is there a fix???

You joking.... Banks issuing insecure cards.... :rotfl:

A card is as secure as the card holder makes it.

Never understood this insurance as the only time it would apply is if the bank held a customer liable.
Given that situation. They would not pay out either.

Security is in your hands. make sure your PIN is not known to anyone else. That means EVERYONE. Never record it anywhere.
Keep your cards in a secure place. Can't find it then cal the bank straight away....
So record the lost/stolen number in your phone & wallet.