Answer:
Haven't seen any stats on claims, but one of my hobbies is reading guarantees and trying to figure out how much protection they really give. The bottom line for some of them? Not much.
Example: This product is guaranteed to eliminate wrinkles in six months if you follow all the directions. The directions, if followed, would take you an hour a day. At the end of six months, you still look like a prune. What does their guarantee get you? Your money back. Your lost 180 hours of time spent using the product are uncompensable.
Depending upon how the guarantee is worded, it may be more of a marketing gimmick than a real risk assumption by the institution.
Are you guaranteeing against loss from hackers? Are you promising the customer won't be on the hook for unauthorized withdrawals using online banking? Are you pledging that transactions will be completed in nanoseconds? Are you guaranteeing that they'll like it?
Before you make what could turn out to be an expensive guarantee, look at your contract with your online banking provider. What is their commitment? Can you fall back on them if a loss occurs of the type you are guaranteeing against?
Make sure, if you do give a guarantee, that it's not written in such a way that the customer would believe it would last forever or that it's broader than it actually is. If new threats are determined to exist and you believe you're at an increased risk, you may want to change your mind about giving guarantees.
First published on BankersOnline.com 5/6/02
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