Tuesday, August 9, 2011

T-Mobile payment system leaves users vulnerable, report says - latimes.com

T-Mobile payment system leaves users vulnerable, report says - latimes.com

T-Mobile's new smartphone-based payment system won't adequately protect users from mistakes, theft and fraud, according to Consumers Union, the publisher of Consumer Reports magazine.

T-Mobile last week announced its so-called Direct Carrier Billing, which will let T-Mobile users buy content off the Web using a T-Mobile account, allowing users to avoid the hassle of entering credit card numbers every time they buy something online. The service will be available later this month, the company says.

But critics say consumers should be careful. Legal protections limit users' liability if their credit and (to a lesser extent) debit cards are used to make unauthorized purchases, but transactions with T-Mobile phones are not afforded the same protections. In general, once consumers report unapproved transactions on their cards, they are liable for the first $50 but no more.

With T-Mobile's system, however, if you find a huge charge you didn't make, you must rely on the good faith of T-Mobile, said Michelle Jun, a senior attorney at Consumers Union. That means the company has discretion to approve a refund -- or not.

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