Guard Against Social Media's Liability Risks

Credit unions should implement policies and procedures to protect themselves.

July 09, 2013
/ PRINT / ShareShare / Text Size +


Credit unions should implement policies and procedures to protect themselves against the legal risks inherent to social media use, an attorney versed in regulatory issues said Wednesday at CUNA's America's Credit Union Conference.

A recent survey indicated 62% of U.S. financial institutions were not using social media or had no immediate plans to use it because they worry about compliance, according to attorney Kevin Funnell of Bieging Shapiro & Barber LLP.

However, many credit unions choose to engage members and prospective members via social media, in part because of the immensity of the audience.

“Most Americans are involved in social media,” Funnell said at a Discovery breakout session sponsored by CUNA Mutual Group. “There are 157 million Facebook users, and 47% of adults use social media.”

New media present risks that traditional media don’t—primarily a lack of control over content and a heightened sense of risk, according to Funnell.

“Social media is relatively new, and there are some well-settled legal rules, but not for financial institutions,” he explained. “It’s an open forum and there is a world full of possible plaintiffs and the fear of the unknown.”

Some legal risks when a financial institution markets to a member/customer through social media include:

Deceptive advertising;
Intellectual property infringement/plagiarism;
Defamation/trade libel;
Disclosure of trade secrets or private information; and
Is it a conversation or advertising?

Legal risks when an employee uses a financial institution’s social media include:

Leaking confidential information;
Committing defamation;
Admissions against the financial institution’s interest;
Binding the financial institution to a promise;
Legal and regulatory violations;
Inability to regulate communication; and
Reputational risk.

Credit unions and financial institutions need to have clear internal written policies regarding copyright infringement, defamation, trade libel, use of non-public personal information and dishonesty (deceptive trade practices).

Enforce policies consistently to avoid any legal problems regarding unfairness of their application, Funnell said.

He concluded with social media policy takeaways for financial institutions:

Strike a balance between the specific and the general.
Be aware that National Labor Relations Board rules apply—even without a labor union.
Understand that informed managers are the key.
Realize the NLRB has been making aggressive interpretations in favor of employees.
Review individual policies and procedures.

Follow the links to read more ACUC coverage from News Now and Credit Union Magazine.

Post a comment to this story


What's Popular

Popular Stories

Recent Discussion

Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory ( will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

Your Say: Who should be Credit Union Magazine's 2014 CU Hero of the Year?

View Results Poll Archive