Dear Expert

Social Media Sleuthing

Platforms like LinkedIn can be great credit and collections tools. But there are some pitfalls to avoid, as MARY E. SEYMOUR explains.

Dear Expert, Social media sites like Twitter are sometimes immensely helpful when my team is doing credit investigations or involved in the collections process. But I’m concerned that there might be certain legal issues that could get us in trouble. Please give me some advice. —Twin Cities Tweeter

Dear Twin Cities,

The short answer to your question is: yes, there are potential problems you need to sidestep. But social media can also be very helpful when used the right way.

As you may have already learned, social media sites can help you find details about customers’ financial status, corporate structure as well as their suppliers and customers. The status of a client’s research and development efforts, additional contact information, references, recommendations and complaints may also spring to light.

You can also use social media to verify information contained on a customer’s credit application – or pinpoint when something they’ve written doesn’t quite “add up.”

By researching social media sites, you may also learn about a customer’s business contacts and potential references that were not listed on a credit application. And information about a customer’s or a principal’s assets and liabilities could also emerge.

There are other big benefits as well. You may find that gathering information about a customer, its principals and guarantors from social media is more cost-effective than running credit checks. It may lead to information regarding the financial condition of the customer and/or guarantor and may help to identify potential sources of recovery.

What’s more, a principal’s or a guarantor’s personal social media presence might disclose valuable assets (or excessive spending).

A “cousin” to social media, search engines, can also be extremely helpful. By typing a customer’s name in search engines, you can quickly obtain current news, articles, press releases and other information that you may not otherwise be able to obtain.

Receiving Google alerts about a potential customer or existing customer is a free tool for getting real-time data and up-todate information on a business applicant or troubled customer.

Compare that info to traditional sources of information, such as financial statements, that credit professionals typically use to conduct an investigation or to assess the creditworthiness of a potential customer. Oftentimes, the information on the financial statements is out-of-date when you receive them.

Do you have a professional puzzle that MFM and BCCA experts might be able to answer? We’ll mine the contact base and find the right person to answer your question. Just contact TFM editor Janet Stilson at TFMeditor@mediafinance.org. NOTES OF CAUTION

Remember, however, that you must be aware of a social media site’s terms and conditions. Browsing publicly available information on sites like Facebook or LinkedIn – information that is public and can be seen by anyone – appears to be permissible.

However, while this seems to be acceptable, credit and collections professionals should be conservative when using social media to gather such information. Carefully consider the accuracy of the information that you access. All social media platform providers disclaim any responsibility for verifying user-generated or userprovided content and information. Such disclaimers will be reflected in the sites’ terms of use and privacy policies.

Be cognizant that social media platform providers and those people or entities that post content on social media sites owe no duty of care concerning the quality of content. So while you may use information obtained from Facebook, LinkedIn and Twitter for due diligence on a potential customer or existing customer, try to confirm the information you find with contacts at the companies you’re researching. Consider the importance of information obtained and weight it accordingly. And be aware that social media If you wouldn’t research can be time consumprint something on the front page ing and may not result in obtaining information that will help you with a credit of tomorrow’s investigation. newspaper, don’t One final point: you should post it publicly on a customer’s never “friend” a delinquent customer or its principals on social media sites, such as Facebook or Yelp Facebook, as a way to gain pages. access to information that has been posted in private mode, for “friends” only. Likewise, you should never publicly post information on a customer’s social media site about a delinquent account for collection purposes. Posting derogatory comments on sites like Twitter or Facebook isn’t really different from making something public in another medium, from a defamation standpoint. It raises the risk of slander or libel litigation. One key rule of thumb to remember: if you wouldn’t print something on the front page of tomorrow’s newspaper, don’t post it publicly on a customer’s Facebook or Yelp pages. Mary E. Seymour is a partner in the law firm Lowenstein Sandler LLP. She can be reached at (973) 597-2376 or mseymour@lowenstein.com.