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Legal issues of Social Media

Having a legal issue being imposed on your company, can be damaging to the companies reputation. Especially, there is no ideas into what can happen to any sort of information that maybe leaked from within the company to the world just through a simple post on a social media website.

Take banks for instances, there have been many cases whereby they have embraced Web 2.0 technology to develop a trust relationship with its customers. Community Building, Product Research, Customer Service, Marketing & Promotion and finally Transparency, these are the five ways that Lon S. Cohen has described as the ways banks have embraced the Web 2.o technology. There has been the issue of banks not implementing a strict regulation of the industry and might be overwhelmed with potential legal risks, as mentioned by Teale Shapcott on his personal blog: he lists 6 potential legal risks that a bank may encounter; they are Confidential Information Risk, Misleading or Decepetive Conduct, Industry Specific Risk, Privacy, Negligent Misstatement and Reputation. Just have a thought, when was the last time your bank was on a social media site and potential legal risks have occured?

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3 responses

  1. Hi Eric, thank you for the mention of my article on Australian Banks & social media. Just one correction though… I am a woman. 🙂 It is ok, it is an easily mistake to make considering my name. 🙂

    August 27, 2010 at 1:50 am

  2. Banks are a tricky one. On one hand they’re just like every other business, they need to advertise, they need to communicate, but on the other hand they deal with the lively hood of hundreds of thousands of people, and therefore have an extremely large responsibility to undertake. I feel that banks should steer clear of social media, and instead stick to traditional models of online news and updates. Traditional news and updates are a lot easier to monitor and control, and never involve releasing confidential data.

    I feel that the other issue with banks using social media is the potential for them to use your profile against you. What would happen if you posted on your profile that you wanted to go on a holiday and then went to the bank for a personal loan but were denied because they didn’t like the location you said you were going on your profile. This is obviously an exaggeration, but the point remains, if your bank had access to your social profile they may be able to use it against you in unfair circumstances.
    Cheers,
    Mitchell.

    October 1, 2010 at 12:04 am

  3. Whenever the public is involved there is a risk. When a image of yourself or a organisation you represent is presented to the public you have to be prepared for the worst.

    October 1, 2010 at 12:53 am

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