Facebook cares about your online privacy... not so much

Consumers need to be clear on the focus of social networking sites like MySpace and Facebook. It's not on protecting users. It's on getting more and more users. One of the ways that these sites attract more users is through the addition of features. Sounds great, right? You already like the site, and with more bells and whistles, you'll probably like it even more.

But have you ever stopped to consider what you're agreeing to when you let these applications become a part of your Facebook account? You're opening just another door to your information. Some users of these sites are very careful about what they publish on them, so letting another application access their data isn't a big deal.

Other users, however, end up opening up their entire lives on Facebook. And that's where things get sketchy. Around Christmas, I heard about the Facebook flap that had people's purchases from certain websites being visible to friends and family... that was a big no-no if you made one of those purchases as a holiday surprise for one of those family members or friends.The litigation machine has been turned on, and a consumer is taking legal action against Blockbuster because of it. Cathryn Harris is objecting to the fact that Facebook's Beacon tool showed her Blockbuster activity to her friends without her consent. She wants Blockbuster to give her $2,500 for each incident in which her private information was disclosed, saying that what happened with her Facebook account was a violation of the Video Privacy Protection Act.

The Facebook tool Beacon was meant to be a marketing tool that could benefit advertisers and Facebook users. At first, it was set up to report activity on a user's Facebook profile unless they opted out. (So everyone would have this unless they said no.) After early complaints, Facebook changed the policy so that users would have to opt in, choosing exactly which off-Facebook sites they wanted to link with their profile.

Harris alleges that Blockbuster activities were being reported back to Facebook whether or not users chose to have the information visible to friends. I don't have a good feel for how this litigation will shake out. But I do know that this case gives ample warning to consumers: Be very careful about what information you're loading to social networking sites. Err on the side of caution. Don't skip reading the subscriber agreements presented when you're signing up. It's important to read them to know your rights. Network online with caution.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
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