Do Shoppers Using Cell Phones and Tablets Need More Protections?
Customers who use their mobile phones or tablets need more protection from wireless carriers, according to a consumer protection advocacy group in a statement released on Wednesday.
"Consumers using mobile payments should get the same strong protections they currently enjoy when they make purchases with a credit card or debit card," said Michelle Jun, senior attorney for Consumers Union, the nonprofit advocacy arm of Consumer Reports.
Mobile payments should have the same safety regulations as credit and debit card transactions, the analysis finds. Safeguards consumers enjoy vary widely from each wireless carrier, depending on policies and contracts.
The union says wireless carriers must strengthen customer agreements protect against lost or stolen phones, billing mistakes, and unsatisfactory purchases.
The group has been speaking since May with representatives from AT&T, Sprint, T-Mobile, and Verizon Wireless to learn about their handling of disputed mobile payment transactions.
All four carriers maintain that they have sufficient protections. However Consumer Union says the protections fall short of what consumers get when they use credit or debit cards or when consumers report a disputed charge. Furthermore, the union said company representatives described protections not stated in contracts, making it difficult to tell whether customers can rely on those protections when problems arise.
Below is what Consumers Union discovered about the protections offered by top wireless carriers:
Lost or Stolen Phone: Verizon customers are not liable for unauthorized charges on a lost or stolen phone. Sprint, AT&T, and T-Mobile customers for not liable for fraudulent charges only after they report a phone has been lost or stolen, leaving the customer responsible for fraudulent charges made before a phone is reported missing.
Disputed Charges: There is nothing in carriers’ customer contracts that support what all four wireless carriers claim, that they will provide refunds for billing errors and unsatisfactory purchases.
Refunds for Pre-Paid Customers: AT&T, Sprint, and T-Mobile indicated that they strive to provide prompt refunds, but their contracts don’t define the time frame. The union said customers should receive provisional credit to their account within 10 days for any fraudulent charges they report. Verizon does not allow pre-paid customers to make mobile payment charges.
Right to Withhold Payment: Sprint customers don’t have to pay for disputed charges as long as they’re reported within 60 days. AT&T and T-Mobile customers in California don’t need to pay disputed charges while an investigation into the dispute is conducted. Verizon customers can withhold payment for disputed charges associated to a stolen or lost phone, but not for anything else.
Cap on Mobile Payment Charges: All four carriers limit the amount that can be spent from a phone on mobile payments. AT&T's cap is $100. Verizon and Sprint's is $25. AT&T also has a set-your-own limit option that costs $4.99 a month.
“We found that consumer rights can vary widely between wireless carriers, and the protections carriers claim to provide are often nowhere to be found in customer contracts," Jun said. “As new mobile payment options become available, consumers are better off sticking to services linked to credit cards or debit cards, which come with strong protections required by law.”