Consumer Union--copy California protection for mobile consumers

With smartphone and tablet users increasingly purchasing goods via their monthly bill or prepaid phone, the Consumer Union has questioned whether consumers get the protections they need to limit their financial liability. The investigation found that protections vary depending on wireless carrier's policies and contracts – and where they live.

Michelle Jun, senior attorney for Consumers Union believes that "consumers using mobile payments should get the same strong protections they currently enjoy when they make purchases with a credit card or debit card." However, the analysis found that consumer rights can vary between wireless carriers and that the protections offered are not always spelled out in contracts.

In May 2011, Consumers Union called on the top wireless carriers tostrengthen their contracts to protect consumers. The group lobbied the companies to provide consumers with the same protections California phone customers are entitled to receive through the Public Utilities Commission (PUC) rules.

AT&T, Sprint, T-Mobile, and Verizon Wireless all maintain that they provide ample protections for consumers. According to the Consumers Union, however, they fall short or rights are not disclosed in contracts. Essentially, telcos are again accused of not communicating.

Jun argues that "consumers are better off sticking to services linked to credit cards or debit cards, which come with strong protections.” These are required by law and Jun believes that if wireless carriers want consumers to have confidence in direct carrier billing programs, “they must strengthen their contracts with the protections consumers need."

The Consumers Union identified specific areas that need strengthening. These include limited liability when devices are lost or stolen; liability when charges are disputed; refunds for disputes; rights concerning withholding payments; and the ability for customers to apply spending caps. While some of these areas are undoubtedly covered to some extent, and particularly in the Golden State, the main problem is that policies are not clearly spelled out and are not standardized. Either the protection should be better and better described or we should move to California.