Social networking as 'unintentional advertising".

• Author: Pry, Carl G.

Say your bank decides to use the power of its employees to attract new customers. Maybe you institute a referral program through which you offer employees a reward or other sort of incentive if a friend or family member opens up a new account or closes a new loan. This is a prime example of the law of unintended consequences as you could have compliance implications depending on the messages that your employees communicate.

In the "old days," ("old" here being the dark ages before Facebook, Twitter, LinkedIn, and other electronic communication forums seemingly took over the world), your employees would tell their friends and family about the great offerings your bank had to entice them to come in and talk to someone and perhaps open an account or get a loan. But now, much of this type of communication leaves an electronic "footprint," which is the legal equivalent of putting it in writing.

When a tweet is an advertisement

For example, if I "tweet" (meaning post on my online Twitter account, which is essentially open to the world at large to read, just like your bank's Web page) something to the effect of "Hey, help me out--my bank has great 5-yr car loan rates. Drop my name when you get one and I get a reward," that could be considered an advertisement. (See the article on Twitter on page 24.) Since a representative of your bank (your employee) is promoting the availability of a product or service, the message meets the regulatory definition of an "advertisement," and therefore must meet all the requirements of the rules. In this case, it is a consumer loan advertisement that falls under Regulation Z (Truth in Lending), and since the post mentions the loan's repayment period, it must also state the APR and representative terms.

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