Anyone who doubts the power of social media to affect finances need look no further than the example of Kansas City Chiefs football player Larry Johnson. The all-pro running back cost himself $213,000, and ultimately a job, by posting anti-gay slurs on the micro-blogging service Twitter -- in 140 characters or less, of course. Career trouble is just one way a badly managed social media presence can hit your pocketbook. Following are three areas where social media could damage your financial life, and how to avoid such pitfalls.
Social media has become a key tool for collection agencies trying to track down debtors, says Michelle Dunn, CEO of the American Credit and Collections Association and author of "Do's and Don'ts of Online Collections Techniques."
"If they don't have a good phone number or the mail's being returned, a lot of them use Facebook to find out if they have a different address or their employment information," Dunn says.
Many bill collectors who think they've found a debtor on a social media site will keep an eye on that individual's online presence, Dunn says.
"They don't necessarily have to post anything to them; they just watch what that person is posting," she says.
Setting a social media profile to allow anyone -- not just friends -- to look at postings can make your profile a particularly rich source of information, she says.
"People post things about if they've gotten a new home or a new vehicle," Dunn says. "People just post such private things about their lives, and the whole world is watching."
Privacy laws should preclude a collections professional from contacting and humiliating you on your social media page, Dunn says. However, some debt collectors violate those legal and ethical boundaries and assume false identities as a means of getting information, she says.
Social media sites ask for, and often get, a large amount of personal information from users. Unfortunately, identity thieves may use that information to perpetuate scams, especially if you use personal information when creating security passwords, McCarthy says.
"If you have a public Facebook profile that gives your birth date and your parents' names and that kind of thing, they can provide the answers to security questions that your bank might have on its Web site," she says.
Even if your profile is private, identity thieves may find other ways to get your information, Beal says.
"We see spammers, we see hackers, we see people trying to sell products using fictitious profiles," he says. "There was a study done a few years ago where one group created a specific fictitious profile and the number of people that accepted their friend request ... was pretty high."
For this reason, be careful about adding social networking "friends" you don't know in real life, says Beal.
"Social networking is not a popularity contest," says Beal. "I don't add anyone to Facebook or LinkedIn unless I know them."
And remember, just because a social media site asks for information doesn't mean you have to give it, Beal says.
Finally, McCarthy recommends never sending money to someone who asks for it over a social media service. Smith says that there have been reports of scammers hijacking accounts and posing as friends.
Andy Beal, CEO of the social media monitoring platform Trackur.com, says jobseekers should assume potential employers will do a Google search of candidates' names. Social media profiles typically appear near the top of the search page.
If you have questionable pictures or posts on a public profile, take them down or make the profile private to avoid trouble.
Also, steer clear of negative talk about a prospective employer on any social media platform, Beal says. Many companies monitor mentions of their brand throughout the Web, he says.
He cites the case of a Twitter user who posted about a new job offer from Cisco, but expressed doubt about "the daily commute" and "hating the work." A Cisco employee noticed the tweet and demanded to know the name of the user's hiring manager.
Even employees who think their jobs are safe can sabotage themselves by being too honest online about their personal lives, or by posting feelings regarding a boss, client, co-worker or company for whom they work.
"We've seen a lot of cases of people publishing status updates that have gotten them in trouble," says Justin Smith, founder and editor in chief of Inside Facebook. "People have said things that have caused problems with their boss because of what they said about their work or because they've shared some other kind of private information about work online."Caroline McCarthy, a staff writer at CNET News, says the best defense against such mistakes is to use plain old common sense. Remember, anything that appears on the Web is just a screenshot away from spreading quickly, despite the best efforts of social media users to keep it private.
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