Legal: Social media do’s and don’ts

Using social media websites or online discussion sites has opened up enormous opportunities for brokers as a means of communicating with their customers, peers and employees.

Brokers, though, need to be aware of the legal and commercial risks of using these sites, as do their employees. The speed and simplicity of social media means it is all too easy for staff to post something that is at best inappropriate (for instance Kevin Pietersen's Twitter outburst after being left out of the England cricket team) and at worst unlawful (think Paul Chambers, arrested on terrorism charges after he flippantly threatened to blow up Robin Hood airport; he is currently appealing a £1,000 fine, claiming that his actions were "obviously frivolous").

Whose work is it?
The first potential pitfall is copyright: be careful about the content you upload to a website. If you or one of your employees has created the content, you can use it as you wish because you own that content.

If, however, the content belongs to a third party, you will need their permission. Without it, you could be infringing copyright or other intellectual property rights. While it is legal to quote a small excerpt from an article, if you're copying anything longer then it is best to insert a link to the original article.

Always take care that you or your employees are not posting to a website anything untrue or unfairly biased about people, businesses or products. Not only could you be accused of defamation, you could also be breaching the Consumer Protection from Unfair Trading Regulations (2008) and the Business Protection from Misleading Marketing Regulations (2008).

Familiar regulations
If social media is used to market insurance products, the Financial Services Authority has made clear that its rules for financial promotions must be followed: it is the content of the communication, not the medium, which is important. The FSA definition of a financial promotion is wide enough to include online posts by brokers, for example those suggesting that others contact you to discuss a product or complaint, those answering a question about a product, or those promoting a new product on a message board.

Each communication that is a financial promotion must be standalone compliant and have been through the broker's internal approval process. This is why some social media, such as microblogs like Twitter with their limited length of content, might not always be an appropriate channel for discussing products.

Whether it is permitted or banned, brokers need to create and implement a clear social media policy covering such issues as confidential information, what action will be taken against employees who post inappropriate material, who can use these channels, during what hours and for what purposes. While social media might be an exciting and dynamic new channel, it is not without risk.

Emma Bate, commercial partner, financial institutions group, Beachcroft