Targeted ads on Facebook have helped many businesses hone in on specific markets and design their advertisements to speak to only those audiences. This tool makes it easier for businesses to reach people who are more likely to use their products or services; however, when it comes to banking and housing, there’s a fine line between targeting your audience and committing housing discrimination.
This March, the U.S. Department of Housing and Urban Development filed a suit against Facebook alleging that their targeted ads allow companies to systematically exclude specific groups from seeing house and apartment ads. This is a direct violation of the Fair Housing Act, which protects people from discrimination when they are buying or renting a home. In response, Facebook will no longer allow housing, employment or credit ads that target people by age, gender or ZIP code.
While realtors and landlords are allowed to advertise their properties online, they aren’t usually governed under the same social media compliance for banks and credit unions, which are set by the Federal Financial Examinations Institute Council (FFIEC). Under the FFIEC social media guidelines, financial institutions must establish policies and procedures for social media that comply with consumer protection laws and regulations, including the Fair Housing Act. What this means for your bank or credit union is that everything you post online is subject to the same rules and regulations as any other advertisement you produce.
If your financial institution is currently using Facebook ads, you can create targeted ads as long as you aren’t using the demographic information mined by Facebook to violate fair lending laws or commit housing discrimination. The penalties for misusing Facebook ads can be steep – you can face lawsuits, class actions, punitive damages of $10,000 per person discriminated against, or fines starting at $500,000.
So, how do you know if you’re following the rules for social media compliance for credit unions and banks? The best way is to have the Social Media Law Firm conduct a social media risk assessment. We’ll determine your current level of compliance with regulations that govern the banking industry on social media, including the Equal Credit Opportunity Act, the Fair Housing Act, and the FFIEC social media guidelines. With this assessment, you’ll have everything you need to eliminate your social media legal risk and create smart social media strategies.
Contact us today and schedule your free consultation. Let us guide you through the world of social media and make sure your bank or credit union is following the rules so you can gain new customers and avoid big fines.
