Holiday shoppers are increasingly pulling out their phones instead of their debit cards when it comes time to pay for a purchase, but what risks are they exposing themselves to when they do that?

If you are charging items to your phone bill, you have limited protection, according to a new study by Consumers Union, which is telling consumers not to use pay-by-phone programs that pass charges through the phone company. The advocacy group has been urging mobile carriers to recognize the responsibilities that come with being a financial intermediary.

While the largest carriers assert they already provide adequate protection, the nonprofit advocacy group asserts that what the carriers say and what's in writing aren't the same, and that purchase protection policies vary widely. The new study appears on its http://defendyourdollars.org site.

Consumers using mobile payments should get the same strong protections they currently enjoy when they make purchases with a credit card or debit card, Michelle Jun, senior attorney for Consumers Union, said. But we found that consumer rights can vary widely between wireless carriers, and the protections carriers claim to provide are often nowhere to be found in customer contracts.

This is no small concern. An estimated 21 million people had been expected to make purchases on mobile devices over the Black Friday/Cyber Monday period alone, according to the mobile advertising company InMobi. And Forrester Research says mobile purchases this year will total $6 billion and rise to $31 billion by 2016.

Consumers Union said many purchases on phones and tablets are made by adding the charges directly to the users phone bill. But consumers don't have to leave themselves to the whim of their cell phone carriers, however. They can make the purchases using a credit card or bank account they link to their phones.

The safest method of purchase is credit card, which comes with fraud protections. It is a bit riskier to use your bank account directly via a debit card. That's because if you have a dispute over a debit, your account could be drained or crippled while the bank investigates, even if it eventually issues you a credit.

Consumers Union has been lobbying to give consumers paying through their phone bills similar protections to those enjoyed by credit card users. That mostly involves responsibility in the event a device is lost and disputing errant charges.

For now, Consumers Union said consumers should avoid using their carriers as a method of payment.

As new mobile payment options become available, consumers are better off sticking to services linked to credit cards or debit cards, which come with strong protections required by law, said Jun. If wireless carriers want consumers to have confidence in direct carrier billing programs, they should strengthen their contracts with the protections consumers need.

Prahar Shah, a 27-year-old MBA student at MIT and a serial mobile shopper, said he mainly makes his purchases using a stored credit card. He says even that could benefit from better protections.

In terms of security, I have to admit that there should be more to authenticate that I am indeed the one making my purchases, he said. However the password and identity authentication measures for mobile shopping still haven't evolved as much as they need to.

Still, Shah says, the biggest issue mobile shoppers face is that is becoming too easy to shop by phone.

The concern shouldn't be as much about security, compared to the relative ease in mobile shopping that can lead to some very impulsive, irrational purchases, he says.

Here are some tips to help keep your phone safe from Mike Paquette, chief strategy officer with Corero Network Security:

- Do not use public Wi-Fi with your smartphone. Use your 3G/4G network instead.

- Ensure that your mobile device or tablet has been registered and enabled for remote wipe to allow you to delete all personal information if it gets lost or stolen.

- Enable security passcodes on your smartphone or tablet to avoid insider theft of private personal information.

- Ensure that your smartphone or tablet software is kept up to date with latest security patches to reduce the likelihood that malware or viruses will infect your device.

Taking the time to do all that should keep your phone safer. And spending the time to do that should limit your impulse purchases, too.

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The author is a Reuters contributor. The opinions expressed are his own.

(Editing by Linda Stern and Beth Gladstone)

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