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Report: FTC Makes Security Recommendations for Mobile Shopping Apps

Mobile Commerce Insider Featured Article

August 05, 2014

Report: FTC Makes Security Recommendations for Mobile Shopping Apps

By Casey Houser
Contributing Writer

A recent report from the Federal Trade Commission found that many mobile shopping applications do not provide users with important information about company privacy and security policies prior to users downloading their programs.

The FTC (News - Alert) stated concerning the report, "What's the Deal? An FTC Study on Mobile Shopping Apps," that it surveyed 121 different shopping apps across various categories in the Google Play and Apple (News - Alert) App stores. The commission studied 47 price comparison apps, 50 "deal" apps, and 45 in-store purchase apps which, respectively, allowed consumers to compare prices, find coupons and discounts, and pay for goods in brick-and-mortar stores.

Jessica Rich, director of the FTC's Bureau of Consumer Protection, commented that the prevalence of such apps lends credence to the notion that people, more than ever, should be provided with information related to their liability when using such apps and the way apps use their personal information. Many apps, the report shows, do not provide any information about those matters and, as a result, leave consumers in the dark.

The report did not only analyze the setup of the various apps; it also provided suggestions for companies so consumers can become more informed. First, the company states, "Apps should make clear consumers' rights and liability limits for unauthorized, fraudulent, or erroneous transactions." The report found that many apps did not state users' potential liability if something went wrong regarding a purchase made with their apps. Companies, it suggests, should note customers' rights because they may not have the same protections, for instance, that purchases with credit cards may offer them.

Next, it says, "Apps should more clearly describe how they collect, use, and share consumer data." Customers provide personal information such as account numbers, names, and phone numbers when making purchases. Therefore, companies should be specific about the ways in which they use such information. Customers should know that many of the apps the FTC reviewed reserved the right to share and use their personal data.

Finally, the statement suggests, "Companies should ensure that their data security promises translate into sound data security practices." This means that companies that say they will protect users' data will follow through with those claims and utilize, to the fullest extent possible, protections such as encryption and secure data deletion. Companies can use the advanced technology found in modern smartphones to protect users' information to a high degree.

Edited by Maurice Nagle

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