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Banks Offering Card Insurance Because of Increasing Level of Fraud

Written by Madona Gasanova, The FINANCIAL

24/06/2013 07:02 (297 Day 23:01 minutes ago)

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The FINANCIAL -- The majority of Georgian bank customers are now opting for credit card insurance due to the increasing level of cyber crime in the country, a new survey of 300 cardholders carried out by The FINANCIAL last week, revealed.

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75% of cardholders stated that their fear is due to domestic insecurity and the increased level of crime in the country. The remaining 25% stated that they do not see the necessity for card insurance, as victims of such theft can easily just block their cards by calling their bank. Most customers are not aware of whether their contracts already cover such risks and their banks should refund the loss.

Card protection is a form of insurance sold by banks and other card providers. It’s designed to protect you from financial loss if your debit or credit cards are lost or stolen. The main challenge for cardholders is to find out whether they already have this protection.

In most cases banks must refund you immediately if you are a victim of fraud, unless they have reasonable doubt that you have acted negligently or fraudulently. Such regulations are implemented in UK and USA, where card insurance is considered as needless product. In Georgia banks are not obliged to refund money illegally taken from debit or credit card.

63% of the total number of respondents stated that their fear is more related to online shopping than using their card at retail centres.

There are only two banks operating in Georgia that currently offer card insurance to their customers. Bank of Georgia , one of the leading Georgian banks, was the first to start offering plastic card insurance to customers. Recently, TBC Bank also started offering the card insurance service due to market demand.

“It was a combination of many factors that determined our decision to offer the insurance product. Market demand was one of the most important aspects,” a TBC Bank official told The FINANCIAL.

“TBC Bank has always taken care of the security of our customers’ cards. However, as the popularity of online shopping is currently on the increase and our customers frequently use our cards abroad, we saw the need to offer a service that would protect our clients from illegal usage of their cards,” The FINANCIAL was told by TBC Bank .

By using our card security service, customers can have their account reimbursed in the event a third party accesses their account illegally at a POS terminal, ATM or via the internet.

Card security was first offered by TBC Bank a couple of months ago and according to its representatives, demand is high.

“Every 10th-15th customer loses their card per month. This is most frequently as a result of imprudence. Cases of robbery are rarer,” said Tea Lezhava, Marketing Specialist at ProCredit Bank Georgia. There are approximately 65,000 plastic cards currently in circulation at ProCredit Bank.

ProCredit Bank Georgia is one of the other eight banks operating in Georgia that do not offer card insurance.

The total number of payment credit and debit cards has significantly increased in 2013. As of May 2013, there are 1,143,265 credit cards in circulation, up from 622,599 of the same period of last year. As for debit cards, their number amounted to 4,396,808 in 2013 and 3,620,141 in 2012. All statistical data was provided by National Bank of Georgia (NBG).

According to the data, as of 31 March, 2013, Bank of Georgia has issued 838,610 plastic credit and debit cards. The number of users of card security amounts to 236,375. This figure is steadily increasing.

The number of transactions with payment cards was 6,044,065 as of May 2013. The number was almost 1.2 million less in the same period of last year. The total value of transactions amounted to GEL 785,914,000 in 2013 and 653,014,000 in 2012.

Growth was also recorded in internet transactions. The number of transactions was 738,802 units, amounting to GEL 29,882,000. Last year the figures were 521,849 units, amounting to GEL 19,929,000.

 

 

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