Social networking sites: understanding the real costs

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When you use an investment company website to access and conduct business on your accounts, you consider the security of the site. You wouldn’t want someone gaining illegal access to your account, and neither does the investment company, which would be held liable in most instances that were not the fault of the account holder.

But, when visiting a social networking site, most folks let their guard down and aren’t thinking about security issues. And, guess what? The firm operating the social networking website isn’t thinking and spending anywhere near as much on security as an investment company does. Thus, the stories about security breaches on social networking sites shouldn’t come as a surprise (nor should my computer’s infection with a virus via Facebook).

Here then are the primary reasons why you should use caution when using social networking sites:

• Five hundred million users. That’s how many registered users Facebook claims to have worldwide. Studies have shown, however, that a large portion of these profiles are fake. Now, consider this question: How many millions of people — e.g. criminals, sexual predators, people and companies trying to sell you something — would you choose to avoid in real life? They are all over social networking sites trolling for “prospects” — including you.

• Poor security track record. There have been scores of news reports about security lapses and breaches on Facebook and other prominent social networking sites. As I mentioned earlier, this stems in large part due to an underinvestment and lack of commitment and concern about users’ security issues.

• Internet-based crime, including identity theft, is rising sharply — especially via Facebook, according to network security experts I spoke with. On an annual basis, such crime is now estimated to cost users about $1 billion.

• Exposure to costly viruses. As I explained earlier, this is what happened to one of my computers. Viruses and other links that expose your personal passwords are especially dangerous, given many people’s tendency to use the same password on other sites, including banking and investing sites, they use.

• Sharing of personal information with others for marketing and solicitation purposes. This problem also should not be a surprise, given that the social networking sites are “free” and they need to find a way to make money.

Consider for a moment what the world was like before the Internet took hold. When I wished to connect with someone, I would pick up the phone and call that person and have an interactive conversation with him or her. Voicemail began to change communication, and then email really began to change things. Now, texting and other methods have taken us even further from personal conversations. n

Write to Eric Tyson, author of “Investing for Dummies” and “Personal Finance for Dummies” (Wiley) via email: eric@erictyson.com.

(c) 2016 by King Features Syndicate, Inc.

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