IMAT 2017 Q16 [Underlying Assumption]

Many banks encourage their customers to buy insurance against credit card fraud and other kinds of ‘identity theft’. But the banks are really protecting themselves. Customers who are victims of credit card fraud suffer inconvenience but they are unlikely to lose money: the costs of any fraudulent transactions are met by the bank. It is therefore unnecessary for customers to spend money on additional insurance services.

Which one of the following is an underlying assumption of the above argument?

A. Customers whose identities have been stolen would have benefited from the banks’ additional insurance services.

B. Additional insurance services are widely available for credit card customers.

C. The banks’ additional insurance services protect only against the costs of fraudulent credit card transactions.

D. People who are worried about identity theft worry only about their credit cards.

E. Credit card fraud is a less serious problem than many people believe.

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Steps:

  • Identify the question type. Although not phrased in the typical Cambridge format (“What is the assumption in the argument…”) we can easily identify that it is asking for an assumption.
  • Strategy Tool Kit for solving assumptions
  • Find the conclusions
  • Find the reasons
  • Find the unwritten link that the conclusion relies on
  • Discard and decide (use negation test if needed)

The author is attacking the usefulness of additional insurance services and how they have no real benefit to the consumer as you normally get money back from credit card fraud. To find the assumption, find the answer that shows that there are no other uses for this insurance because if it had other benefits the author’s argument would be invalid.

A. Customers whose identities have been stolen would have benefited from the banks’ additional insurance services.

This is the opposite of what the author is assuming, the author is assuming that there are no real benefits from these additional services. If the customers would benefit from the additional services then the author’s argument would be invalid because it would mean that there actually is a benefit to having these additional insurances, which is the opposite of what the author is saying. Therefore A is incorrect.

B. Additional insurance services are widely available for credit card customers.

This is not really important, their availability is not in question, rather their usefulness is in question. Therefore B is incorrect.

C. The banks’ additional insurance services protect only against the costs of fraudulent credit card transactions.

If this was not true, then it would mean that there are other reasons to have additional insurance, and this could justify their cost. This would put a hole in the author’s argument because the author is arguing that you do not need these additional services because you will get credit card coverage anyways, but there are other kinds of identity theft (mentioned in the text) in which these additional services could be of use. Therefore C is the correct answer.

D. People who are worried about identity theft worry only about their credit cards.

We cannot assume this and the author does not. The first sentence says that there is insurance against credit card fraud and other kinds of ‘identify theft’. So other kinds of identity theft have been mentioned and are not neglected, but they are of lesser importance. We are only really talking about the credit card coverage for insurance, so this is the gap that this assumption is missing, and what C has instead. Therefore D is incorrect.

E. Credit card fraud is a less serious problem than many people believe.

This is not an assumption that is made in the argument, this may be something that can be drawn from the passage, but it is not something that the author assumes is so essential that the argument is invalid without it. Although the author says that customers are unlikely to lose money if they are victims here, we do not know the other consequences which could be a serious problem. Therefore E is incorrect.

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