Consumer advocates are warning that T-Mobile's plan to allow customers to buy digital content using their phone bills could lead to fraud and abuse.
The system, which T-Mobile announced last week, would allow people to pay for online credits, music, games and other content with their T-Mobile account, rather than credit cards.
That, says Consumers Union's Michelle Jun, is a mistake.
"Mobile payment products promise a new, convenient way to pay but consumers could end up losing money if something goes wrong with their transaction," Jun, a senior attorney for Consumers Union, said in a statement. "Consumers need to be protected in the event of a billing error or if the goods they order aren't as promised or if they become victims of fraud.
The problem, according to Jun, is that such transactions are not protected by laws, like those that cover the misuse, loss or theft of credit cards.
"If wireless carriers expect consumers to feel comfortable using mobile payment services, they need to provide at least the same level of protections that come with credit cards," she said.
T-Mobile says the service will come with "fraud controls, age-appropriate content blocking and spending limit management tools," as well as a two-step customer authentication process.
"With this new program, we're extending the hassle-free payment experience to browser-based purchases from virtually any online source and across a variety of mobile devices, delivering more purchasing power to mobile-centric consumers," said T-Mobile vice president Brad Duea, in a statement announcing the new service.