Payment technology

FTC report finds mobile shopping app disclosures inadequate

Mobile PaymentA new staff report released by the Federal Trade Commission found many consumer disclosures for mobile apps designed to be used in online shopping do not provide shoppers with adequate information.

The report—which examined 121 of the most popular apps, including in-store shopping apps and “deal” apps, as well as comparison shopping apps—found few apps provided important information about consumer liability or the payment-related dispute process, and many used “vague” language in their privacy policies to describe data-sharing practices.

FTC staff issued three recommendations to mobile shopping app providers: disclose consumer rights and liability for fraudulent or erroneous transactions, clearly describe data-sharing practices and ensure promises to secure data are backed by strong data security practices.

Additionally, the staff recommended that consumers seek out information on the provider’s dispute resolution procedures and data-sharing policies and procedures ahead of app download.

“Consumers should be able to make informed decisions about the apps they install and the services they use,” FTC staff said in the report. “In addition to being able to understand their rights and protections in case something goes wrong with a transaction, consumers should also be able to evaluate apps’ data practices before signing up to use a particular service… Staff is committed to working with all stakeholders toward greater transparency and meaningful disclosure about consumers’ rights and protections in the mobile marketplace.”

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