The morning news show featured a story on a family who posted on social media that they were headed out of town for a trip to Vegas. While they were gone, burglars actually backed up a U-Haul to their home and were in the process of loading the family’s belongings before they were spotted by police.

How did the burglars know to go to that specific location?  They checked the family’s Facebook page, saw that they were out of town and headed to their home to rob the family.
 
This story starkly points out the potential hazards inherent in our digitized communications world today. The pervasiveness of social media means we are now a society that shares a lot of information, many times without regard for how far our messages reach and the potential damage they can cause. Privacy has taken a back seat to openness and transparency with unexpected results.
 
The attempted burglary is just one example of the increased risks with which families of wealth must contend. In addition to social media, we are also a society that extensively uses credit rather than cash or checks for purchasing just about everything—whether we do it online or in a business or restaurant. Credit card fraud and identity theft are on the rise and harder and harder to protect against.
 
Social Media
 

For families of significant wealth, the advent of social media has added a layer of complexity to managing risk. Privacy concerns have long been an issue for the wealthy, but maintaining that privacy has become much harder to do in this technologically saturated society.
 
Given the prevalence of social media, family members must be educated on the appropriate use of such technology. One simple social media post has the potential to create embarrassing situations for the family and tarnishing its reputation. Worse, putting out important information on social media can lead to identity theft or possibly compromise the physical security of homes or expose family members to the threat of physical harm. All of this can result from misunderstanding how to appropriately use social media.   
 
Social media certainly has its benefits, and it would be impractical to eliminate its use entirely. But social media needs to be used safely and responsibly. The key for wealthy families is to be proactive in working with family members—especially children and teens—to guide them in their use of social media.
 
Here are some typical social media mistakes:
 
1.    Tweets or postings of information that is embarrassing to the individual and the family (foul or hateful language, sexting or posting suggestive pictures, photos of excessive drinking or the illegal use of drugs).  Once such information is in the digital record, there is no real way to delete it. And, in some cases, the information could expose the family to criminal or civil charges.
2.    Tweets or posts divulging location or vacation plans. This provides a message to criminals that nobody is at home and makes the family home a target for burglaries.   
3.    Not setting privacy settings to eliminate third parties from accessing social networking site page (e.g., Facebook, Google+, etc.).
4.    Divulging too much information on social networking site profile pages—such as birthdate, age, address and sex. All of this information can be used for fraudulent credit card information.
5.    Not appropriately screening “friend” requests. Do you really want people you hardly know perusing your site and personal information?
6.    Not protecting and/or using the same ID and passwords for multiple sites. If only one password is used, once one site is compromised and the criminals have such information, other sites and accounts are vulnerable to hacking and identity theft.

Families need to take a proactive approach to educating members on the appropriate ways to use social media.  Some families or family office personnel spend time educating family members or have policies and guidelines on what is appropriate and what is not for posting. Some families monitor childrens’ social networking sites. It is important to have the conversation.
 
A  good way to help family members  think about posting and tweeting is to have them imagine the information they are posting as a large billboard along your local highway.  Would they want that information or image to be out there for all to see?  If someone doesn’t feel comfortable with such information being viewed by strangers, possible employers, friends, parents, etc., they should think twice about posting or tweeting such information.

Credit Cards
 
Making online purchases or just making any kind of purchase with a credit card has its own set of risks. To try and mitigate the risk, it is important to educate family members to retain receipts and to check credit card statements carefully to be sure that the charges listed are valid. Remind them to be vigilant in monitoring their bank accounts and periodically check their credit rating to make sure that they have not become a victim of identity theft. There is no guarantee that they won’t have their identity and/or credit compromised, but it can do a lot to reduce the risk.

Conclusion
 
Maintaining privacy is not easy these days with the prevalence of social media. However, being proactive in educating family members about how to handle these issues can reduce risk. Society is not likely to turn back the clock on technology so families of wealth must face these challenges or risk unexpected and sometimes unpleasant results.

Claudia B. Sangster is director of philanthropy, estate and trust services with CTC Consulting | Harris myCFO.