By Susan Grant, CFA Director of Consumer Protection and Privacy 3/9/16 More and more people are using their cell phones, tablets
and other mobile devices to pay for purchases. On the street in front of our
office here at Consumer Federation of America, you can pay for parking with your
mobile device, and you can buy coffee at the Starbucks around the corner with it,
too. You can also make mobile payments at some retail stores and websites. For most consumers,
the biggest benefit of mobile payments is convenience. No need to pull out your
wallet for cash or plastic at the store, especially if you’ve got your phone
near at hand anyway. No need to type in your payment information to buy
something online. But what about your privacy? Is your financial and other personal
information safe? These are good questions to ask whenever you consider using
new technology. To help answer these questions, CFA has released new tips on
protecting your privacy and security when you make mobile payments. If you
don’t know the difference between NFC, WAP, QR code scans, SMS and direct
mobile billing, we explain these common types of mobile payments and how they
work. We also describe the kinds of personal information that
could be collected when you make mobile payments, including information that
you’re asked to provide to download a payment app, information that can be
obtained from your device (for example, contacts or your location), and
information about the transactions you make (such as where you shop, what you
buy, how much you spend, and what coupons or loyalty programs you use). While
banks, credit unions and other financial institutions must follow certain
privacy requirements, there is no general federal privacy law in the U.S., so retailers,
payment services and others who may be involved when you make a mobile payment
can collect your personal information and do what they want with it. Read the
privacy policies of the companies whose services you use to make mobile
payments and the companies that you’re paying, and take advantage of the
controls that you may be given over the collection and use of your personal
information. If you don’t like the privacy policy, take your business
elsewhere. Security is also important since you usually carry your
mobile device with you, it’s on most of the time, and it may contain very
sensitive information. Our tips provide advice about how to avoid security
pitfalls, what features to look for to keep your mobile device and the payments
that you make with it safe, and how to prevent others from making payments with
your device without your permission. But what if something goes wrong with a mobile payment? What
should you do? Because there may be several different companies involved in the
mobile payment process, it can be confusing to figure out who to contact. Your
rights to challenge payments are also complicated. CFA’s tips break it down so
you’ll know how to solve problems if they occur. Mobile payments are still in
their infancy – new payment models and security features are constantly
emerging, and consumers’ payment rights could be strengthened in the future to
provide more legal protection.
Are you ready for mobile payments? CFA’s tips, a funny video and ready-to-use news articles to help educate consumers about protecting their privacy and security when making mobile payments were made possible by a grant from the Digital Trust Foundation and are all available at one convenient link: www.consumerfed.org/mobilepayments. |