Consumer Reports Cautions Social Networkers

Consumer Reports' State of the Net survey for 2010 was released this week, and it's already sending ripples through cyberspace.

The bottom line shouldn't come as a huge surprise. As social networks expand, consumers are divulging greater amounts of personal information than ever before.

Opportunities for advertisers to target marketing in more granular and effective ways are increasing—exponentially—along with opportunities for cybercriminals to steal identities and personal data.

Facebook, in particular, is creating safety issues for the average user. Even this morning, the world's #1 social network was scrambling to fix a bug that exposed users' live chats.

According to Consumer Reports, one in four Facebook users either don't use, or aren’t aware, of Facebook's privacy controls. CR's technology editor, Jeff Fox, is concerned about the behavioral impact of Facebook and other social networks on the average user.

"The innocent environment encourages people to drop their guard because it's basically made up of friends and family, yet it's a potentially dangerous environment," Fox tells Mediapost. "You'd never go out into Times Square and announce your personal information. Social networks are not that different."

Cybercrime has forced American’s to replace 2.1 million computers and the cost overall since 2008 is $4.5 billion.

At issue, the delicate dance between data that brings ad dollars and personal privacy…and oh yes, politics. Chris Kelly, contender for California Attorney General and former Chief Privacy Officer for Facebook, thinks his former employer needs to offer better options and stop sharing personal data with third party opt-out sites like Yelp.

Kelly states on his website, “I strongly encourage Facebook to structure all its programs to allow Facebook users to give permission before their information is shared with third parties…As Attorney General, I will represent the citizens of the state of California to protect consumers from fraud and other corporate malfeasance. Any company that breaks the law, including Facebook, will face the full extent of the state's prosecutorial powers.”

While Facebook users may not be up in arms yet, it's likely because they don't realize the potential cost to oversharing online.

Consumer Reports' survey found that 52% of social network participants post risky personal information. That's why its 2010 report offers advice to protect consumers, including “Seven Things to Stop Doing on Facebook NOW!”

One suggestion on the list is for consumers to stop giving full birthdates – day/month/year. Simple changes like this offer greater protection to users, but cause big problems for targeted ad campaigns.

Privacy versus profit – it's an age-old shell game now being played out in cyberspace.