Companies should alert consumers more about the liabilities associated with payment app

A study on mobile shopping apps by Federal Trade Commission from August 2014 concluded that consumers should stop using mobile payment apps that don’t feature clear and concise disclosures that appear before they download the program.

The Federal Trade Commission concentrated on three categories of apps in both the Google Play and iTunes App stores: price comparison apps, deal and coupon redemption apps, and mobile payment apps.

FTC staffers reviewed whether or not the app had pre-download disclosures on procedures for fraudulent transactions, billing errors, and payment-related disputes. Also, they reviewed privacy policies.

The report revealed that most mobile payment apps didn’t feature pre-download disclosures about “issues that are important to consumers.” After downloading the apps, investigators also noticed that nearly all of the associated terms of use policies “placed all liability for unauthorised charges on the consumer.” Furthermore, nearly all of the reviewed apps had “strong security promises and linked to privacy policies”, however most of the apps’ privacy policies used “vague language” and allowed for the collection and third-party use of consumer data.

FTC’s recommendation list for consumers include: start “asking questions” about the mobile payment apps they use and “consumers should look for services that tell them upfront how the payment service works and what they can do if they encounter a problem. If the information is not available, consumers should consider taking steps to minimise their liability by choosing a different payment app or funding such payments with low-dollar amounts.”