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New Study Reveals Mobile Wallet Security Will Get Worse in 2012

by on March 16, 2012

New Study Reveals Mobile Wallet Security Will Get Worse in 2012

It looks like things are going from bad to worse for mobile wallets. In a post last week, we discussed how the rise of the smart phone increased incidences of identity theft by 13% over the past year. In a nutshell, a survey discovered that Americans are storing their personal information on their phones without any security measures in place to keep the data secure, effectively turning them into gift bags for identity thieves.

The findings raised serious concerns about the safety of storing credit card information on phones, which is problematic for the mobile wallets like Google Wallet and ISIS set to hit the market in the next few months. And that’s not even the bad news. The bad news is that a national cyber-security firm is predicting that instead of getting better, the security issues surrounding mobile technology will only get worse in 2012.

Every year, Kroll Fraud Solutions releases a list of the ten biggest cyber-security trends they expect to see in the coming months. These forecasts cover everything from the dangers of integrating cloud service platforms to the coming need for enhanced data logging procedures, and they’re almost always correct. In fact, Kroll even predicted that lost cell phones would increase cases of identity theft in their 2011 release. That’s why it’s so troubling to see that the Nashville firm’s number one prediction for 2012 is that mobile technology threats will be at an all-time high.

According to Kroll, the meteoric rise of mobile technology is to blame for all the problems the industry is currently facing. Technology is evolving so quickly that the demand and pressure for the average company to implement things like smart phone apps is outpacing their ability to secure them. This has resulted in a wave of dangerous apps hitting the market, especially for Android phones. These run the gamut from DroidSheep, a tool thieves can use to hijack network sessions, to malware-laden “FREE” versions of popular games like Angry Birds and Cut the Rope.

For smart phone users, this means an all-out assault on private information, on two fronts. At one end, thieves can pickpocket your smart phone and use it to steal your identity and credit card information. At the other, Trojan apps can use hidden malware to hijack your phone’s operating system and transmit that same information to thieves.

If we weren’t having second thoughts about the mobile wallet before reading the Kroll report, we certainly are now. At the moment, companies like Google, Amazon and PayPal are in a dead sprint to be the first digital-wallet app on the mobile market. This is exactly the kind of situation that Kroll says puts consumers in danger. With so many people losing their smart phones these days, these first generation apps are likely to lead to an uptick in identity theft cases.

If you’ve been clamoring for a mobile wallet, we suggest you wait a year. Mobile wallets aren’t even out of the incubator yet, and technology this new needs time to mature. Being an early adopter carries more than a little risk, and that’s why it’s a good idea to hang on to your credit card until 2013. By then, going mobile will be far safer – and far better too.

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