Last week, the FTC released a study it conducted in connection with price-comparison apps, deal apps and apps that allow people to pay for purchases using their mobile device while shopping in brick-and-mortar stores. The newly released study is the latest commentary from the FTC in a long line of workshops and reports that started in 2012 on the issue of mobile apps, mobile payment mechanisms and related matters, such as mobile cramming and mobile security. Here are the key takeaways from the latest study:
- The FTC is concerned that apps are not disclosing consumers’ rights in connection with payments made via mobile devices. Specifically, apps that include the ability to accept or make payments need to disclose the process for resolving payment disputes and the consumers’ rights and liability limits for bad transactions (unauthorized, fraudulent, etc.). The FTC says that consumers do not understand the difference between the automatic liability protections someone might have in connection with the use of their credit or debit card as opposed to lesser protections available for money that might be transferred to the app for use later (similar to a stored value account). Indeed, the protections for unauthorized or fraudulent transactions between those two categories are likely different. The Consumer Financial Protection Bureau is currently in the process of lobbying Congress to extend the legal protections afforded to credit and debit card transactions to gift card and similar transactions. The FTC wants apps to disclose to consumers their potential liability for unauthorized transactions – especially if the liability is different from the normal expectation that most unauthorized credit and debit card transactions receive.