Consumers Union calls for more mobile payments protections

While technology and its stakeholders are often blamed for holding back on the roll out of new major platforms like mobile payments, unmitigated problems around security can and should cause equal pause, according to Consumers Union.
In a call to action of sorts, the nonprofit publisher of Consumer Reports points out that consumers are at an added risk because the current protections in places are “badly fragmented and don’t apply to all new types of payments.”
Michelle Jun, an attorney for Consumers Union, said “Product providers and regulators need to make sure that (mobile payments) are at least as safe for consumers to use as traditional credit card and debit card payments. It is critical that mobile payment systems are covered by strong rules to protect consumers from losing money because of fraud, processor error or a dispute with a retailer.”
While federal law protects consumers from fraud on their credit and debit cards, the level of protection is vastly different from one to the other. Credit cards can’t impose any more than $50 in liabilities for unauthorized use while debit cards can expose cardholders to more than $500 in liability. Credit cards carry protections in case of bank errors, unauthorized use and disputes with merchants, whereas debit cards leave disputes with merchants completely uncovered, according to the organization.
“Consumers should not be expected to figure out what protections apply to each competing new payments venture,” Jun added. “Regardless of the technology or business organization involved, the same high level of consumer protections should be guaranteed by law and contract for any payment service. Now that mobile payment ventures are emerging in the U.S., it’s time to harmonize and extend consumer protections for all payment services.”
Consumers Union is asking regulators to bolster protections for consumers when it comes to purchases across the board. It also called for companies that offer mobile payment system to include full consumer rights in their contracts with users.
In the meantime, the organization put together some tips to help consumers through the maze.