smart spending

3 financial dangers of social media

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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