Social networking is an integral part of life for millions of people across the world. People update every incident in their life on their Facebook accounts or tweet about it. However, there is a dangerous side to this practice of sharing personal details, especially financial ones, in an arena where it is not easy to detect or control who is using the information that you reveal.
The recent uproar about Facebook data being used by companies has underlined the need for caution and restraint when using such networking platforms. San Francisco based RapLeaf, which uses social networking sites to glean valuable data about a firm’s customers, came for a lot for criticism from the online community. RapLeaf can research information about the customers of a company, and with this data, its clients can customize their products or get better understanding of customer preferences.
The problem is that a company can use your personal data for almost any purpose, and it wouldn’t always be as harmless as product or advertisement customization. For example, a bank may use similar methods to learn of your current financial position. If your tweets show that you are having some financial difficulty, then you could be denied a loan or you could be charged a higher interest rate. If an insurer finds out that you are not keeping well, your insurance premiums might go up.
Similarly, if a bank finds out that you have a strong financial situation, you might start getting endless credit card and loan offers. If they find out that you are not too price sensitive, you might even end up getting bad terms on these financial transactions. If you have received a pay rise or an unexpected bonus, and share the good news online, then you might start getting offers for investment products, which not only will be a nuisance, it might even tempt you into a bad deal.
Some people argue that there is nothing wrong in a company finding out information about you. After all, when you apply for a loan, you are asked for information about your income and financial status. But that ignores the fact that when someone is looking up your information on Facebook, they are doing it without your consent, and it is a serious breach of privacy. What’s more, comments and updates on social networks are often exaggerated. A bank may end up misjudging your financial situation, and it will be you who loses out because of that.
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