Social Media Poses Legal Risks to Banks

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Redondo Beach, CA – Banker and social media author, Jesse Torres, today warned banks about using social media tools as part of the applicant screening process. Whether used as a hiring tool or an ongoing employee monitoring tool, social media platforms such as Facebook and MySpace may create substantial legal problems for banks that make use of these tools as part of their background check procedures.

“Social media tools are a great resource for determining the personal traits of employees. Through postings, photos and other information contained in an applicant’s public profile, potential and existing employers can learn much more about an applicant than they can through a resume,” said Mr. Jesse Torres. “Unfortunately, state and federal employment laws have not kept pace with the capabilities of Web 2.0 and any organization that relies on such information is traveling into unknown and potentially litigious territory. Unless laws have kept pace with technology, which is rare, courts apply existing statutes and case law to current litigation which can result in inconsistent outcomes.”

Researchers have found that almost 40% of employers have used Facebook and other social networking sites to gather information on job candidates and that more than 80% of employers consider negative information discovered when making hiring decisions. A difficult economy may provoke adversely affected applicants into filing employment-related complaints as their employment options may be limited.

“While it has been said that the Internet is the new resume, banks should carefully craft their hiring and monitoring procedures - especially those that utilize social networks. For example, use of LinkedIn would likely be acceptable since it is primarily used for professional purposes. However, other platforms such as Facebook and MySpace may be undesirable,” said Mr. Torres. “While the use of these sites may provide helpful information relative to determining the true character of the candidate or employee, certain information contained on public profiles may expose the bank to litigation.”

According to a blog posting at gNeil (gneil.blogspot.com), a provider of HR solutions, in order for banks and other firms to avoid potential discrimination lawsuits, organizations must develop a uniform procedure for the use of social networking sites as part of the hiring process. Organizations must train everyone involved in the hiring process to treat every applicant consistently to avoid trouble. Each step taken must also be well documented.

In an effort to assist bankers in implementing an effective social media strategy, Mr. Torres wrote and released a 70-page Community Banker’s Guide to Social Network Marketing. The Guide, which is free to download, is a social media and social network primer for bankers. According to Mr. Torres, “banks tend to avoid being on the bleeding edge of technological implementations. Now that social media has experienced significant growth, is starting to season and is being effectively used against organizations, it is time for bankers to evaluate how to best utilize social media within their organization as both a tool for customer relations and risk management.” The Community Banker’s Guide to Social Network Marketing is available as a free download at http://www.tinyurl.com/cbgsnm.

Jesse Torres is a banker and the author of The Community Banker’s Guide to Social Network Marketing (www.tinyurl.com/cbgsnm) and of the upcoming Social Network Marketing: Unlocking the Value of the Community. Jesse can be reached by e-mail at MrJesseTorres@gmail.com. He can also be found on LinkedIn at www.linkedin.com/in/jessetorres and on Twitter at www.twitter.com/jstorres. His blog, Social Media and Banking, can be found at http://socialmediabanking.blogspot.com.

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