Magazine article American Banker

Lloyd's Is Offering Chargeback Coverage

Magazine article American Banker

Lloyd's Is Offering Chargeback Coverage

Article excerpt

A CHARGEBACK insurance policy now being offered to banks and processors can take some of the guesswork and risk out of their relationships with merchants, the managing agent says.

The insurance, offered through London Marketing Associates, covers merchant banks, processors, or independent service organizations against fraudulent or excessive chargebacks. The underwriter is touting this policy as a way to limit the risks of growth into new merchant categories.

London Marketing, a Minneapolis-based managing agent for Lloyd's of London, developed the policy while keeping in mind that different "merchant categories represent different risk management responsibilities," according to Christopher L. Kittler, a managing agent for London Marketing.

Underwriter Sees Broader Opportunities

The underwriting is based on a number of criteria, including the reliability of a servicer's merchants. The insurance can increase the opportunities for banks and processors on the merchant side of the card business, Mr. Kittler said.

"The insurance allows them to push aside the fidelity issue and accept the clients on a strict set of commercial issues," Mr. Kittler said.

Through an endorsement program, London Marketing provides coverage against chargebacks from higher-risk merchants separate from that for low-risk retailers and other merchants with historically low chargeback levels.

Mr. Kittler added that the group is seeking to offer coverage to processors who deal with the "full merchant community. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.