The new system from T-Mobile that allows consumers to purchase digital goods online and have the cost applied to their phone bill at the end of the month may pose some problems for consumers because there is very little in the way of fraud protection with the payment method, according to a report from Consumers Union. Unlike with debit and credit card purchases, consumers would be on the hook if any fraudulent transactions were made using their accounts.
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“Mobile payment products promise a new, convenient way to pay but consumers could end up losing money if something goes wrong with their transaction,” said Michelle Jun, senior attorney for Consumers Union. “Consumers need to be protected in the event of a billing error or if the goods they order aren’t as promised or if they become victims of fraud. Mobile payment services like the one being launched by T-Mobile could put consumers at risk and fail to provide the protections they deserve.”
However, this payment method is not to be confused with another system that consumers may have heard about in recent months, which also allows consumers to make purchases using their smartphones. Programs such as Google Wallet will allow consumers to load their credit or debit card information onto a smartphone enabled with near-field communication technology, according to a report from the San Jose Mercury News. Because this method uses standard card information, in conjunction with store loyalty programs and coupons, it will provide the same protections for consumers as a credit or debit purchase.
Image: Mathew S., Flickr.com