Yesterday, my column on Unfriending Your Clients on Facebook ran on Inman News and set off a firestorm of comments. I’m running the entire text of the original article as well as a second post based upon the feedback.

If you don’t think Facebook privacy is an issue, try typing the words “divorce, child custody, and attorney” into a Facebook post and then look at the ads that appear next to your profile the next time you log on. Big brother is indeed watching and selling ad space based upon what you post.

Furthermore, even though you may be unconcerned about your  privacy, what about the children and grandchildren of your clients who may not have instituted to proper privacy settings? By not being attending to privacy issues,  you could possibly put them at risk.

Here’s the original article. Because of the length, I will put the scripts on how to handle the privacy issues into a second post.

For the last several years, everyone has been pounding the drum, “You have to be on Facebook.” Well friending your clients on Facebook seems like a good idea, given some recent changes in Facebook policy, it may be time to unfriend them instead.

There’s no doubt that Facebook can be a powerful tool for building client connection. It can also be a great tool for creating groups and building an online presence in your local market area. Nevertheless, there are some serious problems you may not know about that can jeopardize how you’re handling your personal and your clients’ confidentiality.

First, if you post an ad for one of your listings on your profile page, you have violated the Facebook terms of use and can have your account cancelled. You can legally post information about your listings on fan pages, business pages, and Facebook marketplace.

Second, if you’re playing any of the Facebook games provided by third parties, most of these games are data mining schemes. The designers harvest the information about you and your friends and sell them to third parties. Failure to block these applications means that even if you’re not involved in playing these games, if any of your friends are, your information will be harvested due to their activities.

There are two even more serious issues. On January 26, 2011, Barbara Ortutay wrote an article describing yet another change in Facebook policies.

“Facebook users who check in to store or click the ‘like’ button for a brand may soon find those actions are retransmitted on their friends’ pages as a “Sponsored Story” paid for by advertisers. Currently there is no way for users to decline this feature.”

In other words, if have clients in your Facebook database of friends and you click “like” for a particular brand, Facebook may display that choice as a “sponsored story” on your client’s page without your permission. To your client, it will look as if you put a paid commercial for a company on their page. Since there is no way to opt out of this feature, this means that you need to stop “liking” various brands on Facebook.

For example, you might have a friend who is an agent at another brokerage. You post a “like” about something your friend did. If your friend takes out a Facebook ad, it’s conceivable that your “like” would now become a “sponsored story” that endorses your friend as an agent—not a great move for your business.

In addition to these issues, another major problem was reported by PC Magazine on 1-17-11.

“Facebook recently announced that it is making user phone numbers and addresses available to developers, a move that a security expert said ‘could herald a new level of danger’ for Facebook members… Facebook said the permissions only provide access to a user’s address and mobile phone number, not their friend’s addresses or mobile phone numbers.”

In the comments on this article, one of the posts called Facebook, “the biggest phishing scam on the web.”

It’s one thing to have your office phone number on Facebook. We all want potential clients to be able to reach us easily. On the other hand, it’s something else entirely to have our mobile numbers distributed to third parties without our consent. Here’s why.

Have you received any spam text messages on your mobile phone? How do you think they got the number? There’s a good chance your data was sold to one of these third party advertisers either through Facebook, Google, or a host of other companies that collect and distribute this data.

To reduce your exposure, PC Magazine recommended the following course of action:

“Users should delete their phone numbers and addresses from their profile information.”

While this may seem extreme, it probably is an excellent idea. The challenge here is that we are in an entirely new realm and there aren’t a lot of guidelines to help Realtors navigate through these issues.

For example, what are your obligations in terms of protecting your clients’ private information? Do you need a disclosure that says that if a client becomes your Facebook friend that Facebook may distribute their contact information including their cell phone number to third party advertisers? Could you be sued for violating client confidentiality?

The bottom line here is that if you are doing a transaction with a Facebook friend, the smart move may be to unfriend your clients immediately. For friends who do become your clients, the moment you enter into an agency relationship, you may need to remove that relationship from Facebook as well.

If your clients ask about your decision, explain to them that you are concerned about protecting their privacy and that you will be communicating with them either through a transaction tracking platform, email, phone, or text messaging.

While Facebook can be great for staying in touch, having fun, and even building your business, it may not be your friend when it comes to your clients who are also your Facebook friends.

In a subsequent post, I shifted my position somewhat–privacy issues must be addressed with the client. Ask the client what they would like to do rather than having you initiate the process.

As Joy Siegel said, “Most agents would rather die than unfriend a client.” She’s right.

Posted by Bernice Ross. This week at RealEstateCoachRadio.com, we are extremely pleased to welcome back Rick Sharga, the CEO of RealtyTrac, the leading distressed property site in the real estate industry. You may have seen Rick on TV or heard the RealtyTrac reports quoted on the radio or in the major newspapers. Rick gives us a great update on the distressed property market (sadly, more shadow inventory in the pipeline) as well as some great ideas about how to get into the REO market without having a lot of expense.