As part of its efforts to ensure people are protected in the growing mobile marketplace, the US Federal Trade Commission (FTC) has issued advice for online consumers.
With the increasing focus on the mobile payment arena, the FTC, which strives to protect American consumers, has released its ‘Paper, Plastic or Mobile?’ report. The study highlights key issues facing customers and companies as they adopt mobile payment services.
Three Key Areas of Focus
The FTC panel identified three primary areas where concerns are likely to arise with the increasing use of mobile payments - dispute resolution, data security and privacy.
The FTC report said: “While mobile payments offer many potential benefits to consumers, they also raise consumer protection concerns.
“Another key concern for consumers when making mobile payments is whether or not their sensitive financial information can be stolen or intercepted.”
Confusing Billing Landscape
As consumers fund mobile purchases using a variety of sources; from credit cards and prepaid debit cards to charges placed on their mobile phone bills, under current regulations, each of these funding methods has a different process for consumers to dispute unauthorised charges, with varying levels of consumer protection.
“This creates a potentially confusing landscape for consumers trying to decide which mobile payment system to use and how to fund these payments,” the report notes.
The report, which encourages industry-wide adoption of strong measures to ensure security throughout the mobile payment process, highlights the growing problem of mobile ‘cramming’, which occurs when third parties place unauthorised charges onto consumers’ mobile phone bills.
“The mobile carrier billing platform raises a unique challenge with regard to third parties placing fraudulent charges onto consumers’ mobile carrier bills,” the report stated.
It also addresses ways sensitive financial information can be kept secure during the mobile payment process, such as through end-to-end encryption.
The FTC, which in the past has brought law enforcement actions relating to mobile technology issues, including a number of actions against mobile app developers, says as mobile payment providers also potentially have access to a much larger cache of personal information stored on the consumer’s mobile device, this is also a cause for concern.
The report said: “Although the industry is still young, FTC staff encourages those developing mobile payment products and services to create them with financial, security and privacy protections in mind.”