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U.S. PIRG and CDD Advocate That Consumer Financial Protection Bureau Issue Regulations and Safeguards for Mobile and Digital Financial Services and... [Health & Beauty Close - Up]
[September 15, 2014]

U.S. PIRG and CDD Advocate That Consumer Financial Protection Bureau Issue Regulations and Safeguards for Mobile and Digital Financial Services and... [Health & Beauty Close - Up]


(Health & Beauty Close - Up Via Acquire Media NewsEdge) U.S. PIRG and CDD Advocate That Consumer Financial Protection Bureau Issue Regulations and Safeguards for Mobile and Digital Financial Services and Privacy Two consumer organizations told the Consumer Financial Protection Bureau (CFPB) recently to issue rules so consumers can use mobile financial services without placing their privacy at risk or exposing themselves to new forms of predatory lending and other unfair practices.



The groups--U.S. PIRG and the Center for Digital Democracy (CDD)- - submitted comments to the agency as part of its inquiry on mobile financial services. In a media release, the groups said that they called for a series of safeguards on mobile and other digital financial applications, including on data collection, online financial marketing, mobile payments and other key applications.

"The CFPB has a short window to ensure that the public receives the necessary consumer safeguards, especially for financial applications and their privacy, as they increasingly rely on mobile devices for banking, payments, credit applications, shopping, e- commerce, and other services," explained Ed Mierzwinski, Consumer Program Director for U.S. PIRG. "Otherwise, unfair business practices will become entrenched in the marketplace and hard to stop." According to the groups, industry practices described in the filing as requiring CFPB action include the following: -Data collection and profiling, -The use of real-time location, -How "apps" and other digital financial applications are designed to trigger consumer behavior, -The special targeting of multicultural groups, including African Americans and Hispanics, and, -How "Big Data" technologies raise privacy and other consumer protection concerns.


-The growing use of "lead generation" on mobile devices, where a consumer's data can be stealthily collected and sold to credit card, banking and other financial companies so they can be targeted with offers.

-the use of data profiles and location to micro-target consumers in real-time with payday loans and other costly financial products.

"Contemporary mobile practices that take advantage of the powerful capabilities of online financial marketing raise questions about whether consumers will well-served in the long-run, said Jeff Chester, CDD executive director. For example, economically vulnerable consumers--or any other American on a budget--could be bombarded with highly sophisticated offers urging them to spend that take advantage of their data, buying habits, family composition, ethnicity and more. Without fair rules, such practices could undermine their ability to protect their financial security. That's why we call on the CFPB to take action now," he explained.

"Without question, the convenience and power of mobile devices and applications provide financially at risk, unbanked, and other vulnerable consumers greater opportunities to save money on banking transactions and payments, have additional ways to build financial resources, make more effective decisions on purchasing," Mierzwinski concluded. "But few consumers understand or can effectively control how mobile and other digital financial products actually operate; as a result we believe they also pose serious risks unless safeguards are enacted." More Information and Complete Details: www.uspirg.org www.democraticmedia.org ((Comments on this story may be sent to [email protected])) (c) 2014 ProQuest Information and Learning Company; All Rights Reserved.

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