Your cards have gone. Who do you ring first?
Peace of mind for under £30 a year – or a costly add-on you can easily do without? Esther Shaw considers the case for cover against the loss or theft of your wallet or purse
Sunday 16 March 2008
There is nothing quite like the shock you receive when you realise that your wallet or purse – and all the cards contained in it – has been lost or stolen.
And as if that were not bad enough, worrying new figures from the Association for Payment Clearing Services (Apacs) show that fraud on debit and credit cards soared by 25 per cent last year, with losses reaching a record high of £535.2m.
This is where card protection policies are supposed to kick in. You will often find them advertised in the leaflets sent out along with new credit or debit cards, pledging "life assistance" or "emergency support" if your cards are lost or stolen. But while these claims all sound pretty persuasive, is the cover really all it's cracked up to be?
The biggest selling point of card protection – apart from removing any personal liability for losses due to fraudulent transactions in the event of theft – is that if you have it and the worst happens, you need only make one phone call to report the loss of all your cards.
"Card protection cover is offered as an option by virtually all credit card providers, and costs between £18 and £29 a year," says David Black from financial researcher Defaqto.
"This type of insurance is essentially 'peace of mind' cover if your cards are lost or stolen. All you have to do is make one phone call, and then a case worker will deal with all your card providers," adds Mr Black.
In addition, some card protection policies may offer cover for the cards of the people who live with you, as well as protecting you against any losses incurred through fraudulent spending, loss of passport, travel tickets, keys or luggage. The main providers in the UK are Card Protection Plan and Sentinel.
In many cases, this type of cover is offered by banks as one of a selection of incentives, along with travel insurance, breakdown cover and mobile phone insurance, to get you to take out a packaged current account – for a monthly fee.
Lloyds TSB, for example, offers Sentinel Card Protection worth £20 a year if you open one of its Select, Gold Service, Platinum or Premier accounts; fees for these range from £7 a month for Select to up to £25 a month for Premier
"Card protection does have its place in the market," says Tracy North from price-comparison service uSwitch. "But you are having to fork out more than £2 a month for this cover."
Adam Williams from the consumer body Which? adds that it may be useful if you have a lot of cards, but if you have only one or two, you could simply call those individual providers yourself.
In fact, card protection can be something of a money-spinner for all concerned. Mr Black points out that the banks earn commission from the providers if you buy the cover.
David Kuo from the financial information website Fool.co.uk argues that card protection cover is an "expensive add-on that consumers can well do without". He notes: "The law already limits card customers to a maximum [liability] of £50 if they are victims of fraud."
The only exception to this is if it can be shown that you have not taken "reasonable care" with your cards.
"Card protection should be renamed 'money for old rope' because that is what you are paying for if you take it out," says Mr Kuo.
That said, those providers that do offer the cover are insistent that it represents good value for customers.
Nationwide building society's policy costs from £29 per year and is underwritten by Card Protection Plan. The Nationwide's spokeswoman, Jackie Lawrence, says: "It is an option for customers who want the security of knowing that if their wallet, purse or handbag gets lost or stolen, their cards, house keys, car keys, driving licence, passport and mobile phone are all protected."
How couples can protect their financial interests when cohabiting
Authorities failing in hunt for 'most wanted' tax dodgers who owe HMRC £844m
Buyers beware of new-build home headaches
Dirty tricks in a divorce can cause some nasty surprises
A student's guide to financial survival: You don't have to drown in debt at university
- 1 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 2 Joan Rivers: 'Palestinians deserve to be dead'
- 3 Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
- 4 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
- 5 Botched ice bucket challenge leaves man critically injured after plane drops hundreds of gallons of water
Exclusive: We share blame for creating 'jihad generation', says Muslim strategist
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
- < Previous
- Next >
iJobs Money & Business
£20000 - £30000 per annum + OTE £40-50K first year: SThree: The SThree group i...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
£85000 - £100000 per annum: Ashdown Group: Head of Marketing - Slough, Berkshi...
£35000 - £55000 per annum: Harrington Starr: A Global global asset management ...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony