Tag Archives: Finance

Financial troubles for Social Media

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.

Employment
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.

“People just post such private things about their lives, and the whole world is watching.”
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.

Debt collection
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.

Scams
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.

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Can social-media tools, such as Twitter, help me with my investing?

The growth of the Internet and social-media tools, such as Facebook and Twitter, means advice is never hard to come by. However, the quality of that advice — and the adviser — should be researched thoroughly before making any financial decisions. Members of the Financial Planning Association of Greater Indiana may be able to advise you on this and other financial matters. Visit its Web site at http://www.fpagrindiana.org.
Charlotte Lippert, Bedel Financial Consulting
With regard to your investments, you should be very discerning about the advice you heed. This applies to the opinions you are exposed to at a holiday party, from the television, on the Internet, or through the use of Twitter.

The Internet can provide you with loads of data in mere seconds. With increased participation from trustworthy sources, it has become a great tool for obtaining quick and reasonably accurate information.
Now, social-media tools provide new avenues to reach out and be heard. However, most of what is out there is just “noise” and could be misleading.
For example, earlier this decade, stock message boards were intended to be a way to gain new insight about a company’s stock. In 1999 and 2000, they also provided the vehicle for a 15-year-old boy to commit securities fraud.
According to The New York Times, a teen named Jonathon Ledbed posted multiple recommendations for stocks with low trading volumes. When others bought the stocks based on his advice, he dumped his shares, netting at least a quarter of a million dollars in profit.
With regard to investing and advice, it is best to ask yourself the following questions: Is this information from a reputable source? Is the person or source providing the advice being paid by you? Do they have your best interests in mind? If the answers are “no,” then it’s likely not of great value to you.
Chad Stevens, Westpoint Financial Group
The world of information available to us today is astonishing.
We have investment advisers, business magazines, financial news sites, well-known Web sites, and now Twitter. This is the new thing.
Be forewarned, however, that just because a person goes by the name “Best Financial Planner in the World,” that does not mean it is true, nor does is mean that the person you are following or “tweeting” has the credentials or the licensing to give advice.
Whether online or in person, always ask if the person is licensed and has a professional designation, such as CFP, ChFC or CLU. Also, check their backgrounds. Check for years of experience and verify it via a company Web site.

One more caution: If the information you are getting is considered “insider trading,” which is nonpublic information that has been disseminated via an employee of the company, you could be subject to fines.
Twitter can be a good way to research a stock and get hints. If a tweeter is guiding you to other credible Web sites, it might be a good resource.
I would encourage you not to act solely on a “tweet” when picking your next investment. Meet with a financial adviser, who will learn about your specific situation and make recommendations.
The information provided is intended to be educational only and is not written or intended as specific tax or investment advice and may not be relied on for purposes of avoiding any federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax counsel. Chad Stevens is a registered representative of MML Investors Services Inc., member SIPC.
Jeffrey B. Sturgis, Brightstone Advisors
There is a Latin phrase that comes to mind when discussions of the Internet and social media take place. It is caveat emptor, or “let the buyer beware.”
Those who seek investment advice from Twitter, Facebook and the Internet in general should keep this phrase in mind. Thanks to recent advances in technology, answers and advice are just a few mouse clicks away. Although access to abundant information is helpful, it is the quality of the information that still matters most.
The best advice and counsel is rarely generic in nature. Advice and counsel that takes into consideration your unique and specific set of circumstances will deliver the most value to you.
One size does not fit all when your money and investments are at stake. That is why the best advice and counsel will be found from a competent and experienced professional with an integral knowledge and understanding of you and your specific situation.

The chance of finding this kind of advice on Twitter, Facebook or the Internet is very unlikely, but, I suppose, not impossible.
If you are brave and can mitigate the risks that accompany social-media tools, it is not unreasonable to still expect any adviser to put your interests first — including advisers found on Twitter.
You should ask early on for their professional designations and the code of ethics they follow. If the vetting of their credentials discloses no reason for concern, there is no reason not to continue.
After all, centuries ago, Latin had a phrase for that, too — audaces fortuna iuvat — which means “fortune favors the bold.”

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