Smartphone security threats leave consumers vulnerable to fraud


We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Monday, January 9th, 2012

Is your smartphone protected from hackers?  Chances are it’s not.  Less than 5 percent of all smartphones are protected by security software, according to a new report by Juniper Research.  That means your smartphone could be hacked without your knowledge, leaving you vulnerable to identity theft and financial loss.

Security threats are on the rise as smartphone use has become more widespread.  And as more consumers begin using their phones to make purchases, security experts expect cyber criminals to target the mobile devices with new rip-off schemes.

Most cell phone and tablet users can purchase digital goods and charge them to their monthly bill or prepaid phone account.  Unfortunately, they may not get the protections they need to limit their financial liability if their phone is hacked and used to make fraudulent charges.  The protections consumers receive will vary depending on their wireless carrier’s policies and what’s in their cell phone contract, according to Consumers Union’s latest mobile payment report.

We found that the protections that AT&T, Sprint, T-Mobile, and Verizon Wireless provide fall short of what consumers get when they use credit cards and debit cards.  In addition, many of the protections wireless carrier’s maintain they provide are not disclosed in customer contracts, making it difficult to know whether consumers can count on these safeguards when problems arise.

There’s reason to be concerned.  A recent Consumer Reports secret shopper investigation found that many customer service representatives at the top wireless carriers were unaware of the kinds of protections their companies claim to provide when something goes wrong with a mobile payments transaction.

Wireless carriers insist that their mobile payment security efforts make fraud unlikely.  If that’s the case, they should have no objection to guaranteeing strong contractual protections for consumers in the event crooks manage to make fraudulent mobile payment charges.

You can protect yourself from smartphone security threats by following some simple steps like avoiding public wifi networks and installing security software that detects and removes malware.

And if you’re interested in making purchases using your smartphone or tablet, stick to mobile payment services that are linked to credit cards or debit cards instead of your phone bill.  That way you’ll get the strong protections guaranteed by law that come with credit card or debit card purchases.  You’ll find more mobile payment tips here.

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