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Those Buying Items Using Cell Phones May Wish To Reconsider, Study Suggests

Cell phone wallets appear to be the next big thing for shoppers. And you can’t deny the convenience of being able to pay for just about anything using your cell phone – no purse to lug around, no cash to worry about losing, and the list goes on.

But those who use their phones to purchase items can be at significant risk of identity theft and are not completely protected, according to a Consumers Union study which was recently released.  Consumers Union is a policy and action component of Consumer Reports.  The study can be found at www.defendyourdollars.org.

Despite the convenience that pay-by-phone programs offer, most of these transactions will cause charges to be placed on a user’s mobile phone bill. And most carriers don’t carry appropriate purchase protection where the writing in their policies is concerned, even though many larger companies say the protection they offer is adequate.

The Consumers Union feels that users who pay with their cell phones should be receiving the same level of protection that they would when using their credit or debit cards to make purchases, something that is not the case with mobile carriers.

With the continuing exponential rise in mobile device purchases, estimated to exceed $31 billion by 2016, the Union says this lack of protection presents a very real cause for concern.

Another frightening facet of the situation lies in new ways in which hackers are employing to overtake mobile devices. Modern-day cyber thieves can hide viruses and malware in any number of apps that, when downloaded and executed, expose the mobile device owner’s information, chat history and other sensitive information. In addition to exposing information, malicious apps can also allow a hacker to use a user’s device to initiate cyber attacks on a wide range of targets.

Recent lobbies of the government by the Consumers Union included providing mobile pay consumers with fraud protection for situations such as when suspicious purchases are made on a stolen device that results in errant charges.

The Union stresses that because credit and debit cards have protection in place that’s legally required, they are the safest services to use when purchasing items or services. However, even these methods have their caveats, with technology available to scan any card from a distance using widely-available RFID readers which can collect numbers and personal information.

Those still wishing to purchase items with their phones are urged not to use public Wi-Fi networks when they shop, contains security passwords to prevent insider theft, and has been registered so that a ‘remote wipe’ of all information can be executed if needed.

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