You may need closer credit monitoring if you are a consumer using a "mobile wallet."
You may be using a mobile wallet without knowing the term, and certainly you've seen one in use as someone in the coffee line or lunch line ahead of you has opened an app on their smartphone and flashed it in front of a device next to the cash register and then were on their way without paying cash or using a credit card.
Payments made via mobile devices in the United States are expected to total $90 billion by 2017, a big jump from the $12.8 billion spent in 2012, according to Forrester Research. If you own a smartphone, and millions of us do, you will be tempted to jump onto the mobile payments bandwagon.
There are at least twenty mobile wallet systems currently in use according to a new study from the Carlisle & Gallagher Group. The report identifies the 20 as those being offered by large tech companies: Apple Passbook, Google Wallet and LevelUp; those being offered by large merchants, such as Amazon, Dunkin Donuts and Starbucks; those offered by credit card association like AMEX Serve, Master Card PayPass Wallet and Visa V. along with five major banks who are not identified in the report.
Not included in this look at the mobile payment industry are the services now being offered by the major cell phone companies such as T-Mobile's Isis Mobile Wallet.
So then, are mobile wallet systems safe? In part that depends upon your definition of safe.
T-Mobile, for example, says its Isis Mobile Wallet "is actually safer than your existing wallet" because you use a unique 4-digit Wallet PIN code to access it, then too all "sensitive payment information" is "safely stored" and finally "if your phone is lost or stolen, you can remotely freeze it with one call or click." Try doing that if you lose the wallet in your purse or back pocket.
But, the FTC points out that the federal protections afforded to credit and debit cards, which limit a consumer's liability in the event of fraud or unauthorized charges, do not protect mobile wallets. That why, most of the issuers of mobile wallets make a point of guaranteeing users either 100 percent or for any amount in excess of $50 from the misuse of their accounts.
However, the FTC notes that this voluntarily liability limit is just that - voluntary. "Companies that provide them could withdraw or modify them at their discretion."
The FTC also points out that safety and privacy are not the same thing and that users of mobile wallets open themselves to advertisers, retailers, operating system manufactures and app developers using data collected from mobile devices to build more comprehensive consumer profiles, including shoppers' personal contact information, details of their purchases and their physical locations.
All this means is that if you use mobile wallets you need to keep a close watch on all your credit card bills and you should utilize good credit monitoring. You as the mobile wallet user will be the first to learn if there is unauthorized use and to do that you need close credit monitoring.