Sapphire credit card holders to be on their own for fraud protection

Chase's Sapphire card will stop offering ID theft coverage. Is it just a coincidence that Chase was told to refund $309 million to 2 million customers over nonexistent credit-monitoring services?

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Holders of Chase bank's popular Sapphire credit card may be wondering why they'll soon be on their own when it comes to keeping fraudsters at bay.

"Please note that ID Theft Coverage will be canceled," Chase has notified Sapphire cardholders. "All changes are effective Nov. 1, 2013."

That's a pretty significant reversal considering that identity-related fraud affected 12.6 million U.S. consumers last year and caused $21 billion in losses, according to Javelin Strategy & Research.

Chase's Sapphire card comes with a bunch of nifty benefits and now boasts additional perks, such as more comprehensive trip insurance and more coverage if an airline loses your luggage.

But in today's scam-filled world, with Javelin estimating that an American is victimized by identity theft every three seconds, you'd think helping cardholders protect themselves from digital grifters would be a priority.

Paul Hartwick, a Chase spokesman, told me the bank was dropping ID theft protection because cardholders didn't want it.

"Our intention is to provide benefits that customers find valuable," he said. "That is why we improved some of the most popular benefits ... and why we canceled this one."

Hartwick said that not one of its millions of Sapphire cardholders has submitted a claim for the benefit "for at least the past 12 months." Not one.

That's pretty hard to believe.

He also said the decision to drop ID theft coverage from Sapphire cards had nothing to do with the fact that federal regulators ordered Chase last week to refund $309 million to more than 2 million customers who were billed for credit-monitoring services they never received.

I'm having a little trouble believing that as well.

Richard Cordray, the director of the Consumer Financial Protection Bureau, said that in many cases, Chase "never received the necessary authorization from customers" to sign them up for credit monitoring, which could run as much as $12 a month.

"When the fees for the products exceeded credit card account limits," he said, "some consumers faced even more fees and paid additional interest on those amounts."

Chase also has to pay $80 million in fines and beef up scrutiny of third-party companies that manage Chase's fraud-protection services.

Yet Hartwick said the settlement with the bureau was completely unrelated to the decision to eliminate similar coverage from Sapphire cards. Apples and oranges, he said.

The feds had focused primarily on enrollment and implementation of credit monitoring, Hartwick said, while the Sapphire ID theft benefit involves "reimbursement for covered expenses you incur to restore your identity."

For example, Sapphire cardholders could submit claims for costs related to having to resubmit loan applications that may have been rejected because of a stolen identity, or to notarize an affidavit, or any wages lost as a result of the many hours it can take to untangle a case of ID theft.

But, according to Chase, not one person chose to avail themselves of this free coverage, opting instead to swallow all costs themselves.

That's even more remarkable when you figure that, by Javelin's estimate, it can take as much as 37 hours of one's time to deal with ID theft.

I guess Chase customers — the ones that weren't duped by the bank's bogus credit monitoring — are just so good at dealing with fraud that they don't need any extra help.

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Wesley Case is a south Jersey native and a Delaware grad. Since October 2008, I've worked at b, reporting music stories that focus on Baltimore's burgeoning scene and the music outside the city that matters to you. More ...
Jordan Bartel is assistant editor at b and lives in Mount Vernon. More ...

Luke Broadwater covers Baltimore politics for The Sun. More...

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