Five hidden dangers of Facebook

Facebook claims that it has 400 million users. But are they well-protected from prying eyes, scammers, and unwanted marketers?

Not according to Joan Goodchild, senior editor of CSO (Chief Security Officer) Online.

She says your privacy may be at far greater risk of being violated than
you know, when you log onto the social-networking site, due to security gaffes or marketing efforts by the company.

Facebook came under fire this past week, when 15 privacy and consumer protection organizations filed a complaint with the Federal Trade Commission,
charging that the site, among other things, manipulates privacy
settings to make users' personal information available for commercial
use. Also, some Facebook users found their private chats accessible to
everyone on their contact list--a major security breach that's left a
lot of people wondering just how secure the site is.

In two words, asserts Goodchild: not very.

On "The Early Show on Saturday Morning," Goodchild spotlighted five
dangers she says Facebook users expose themselves to, probably without
being aware of them:

Your information is being shared with third parties
Privacy settings revert to a less safe default mode after each redesign
Facebook ads may contain malware
Your real friends unknowingly make you vulnerable
Scammers are creating fake profiles

Below is an edited transcript of the interview.

Is Facebook a secure platform to communicate with your friends?

Here's the thing: Facebook is one of the most popular sites in the
world. Security holes are being found on a regular basis. It is not as
inherently secure as people think it is, when they log on every day.

Certainly, there are growing pains. Facebook is considered a young
company, and it has been around a few years now. It is continuing to
figure this out. They are so young, they are still trying to figure out
how they are going to make money. It is hard to compare this to others;
we have never had this phenomenon before in the way [so many] people are
communicating with each other--only e-mail comes close.

The potential for crime is real. According to the Internet Crime Complaint Center,
victims of Internet-related crimes lost $559 million in 2009. That was
up 110 percent from the previous year. If you're not careful using
Facebook, you are looking at the potential for identity theft, or
possibly even something like assault, if you share information with a
dangerous person you think is actually a "friend." One British police agency
recently reported that the number of crimes it has responded to in the
last year involving Facebook climbed 346 percent. These are real
threats.

Lately, it seems a week doesn't go by without some news about a
Facebook-related security problem. Earlier this week, TechCrunch
discovered a security hole that made it possible for users to read their friends' private chats. Facebook has since patched it, but who knows how long that flaw existed? Some speculate it may have been that way for years.

Last month, researchers at VeriSign's iDefense group discovered that a hacker was selling Facebook usernames and passwords
in an underground hacker forum. It was estimated that he had about 1.5
million accounts--and was selling them for between $25 and $45.

And the site is constantly under attack from hackers trying to spam
these 400 million users, or harvest their data, or run other scams.
Certainly, there is a lot of criticism in the security community of
Facebook's handling of security. Perhaps the most frustrating thing is
that the company rarely responds to inquiries.

Do people really have privacy on Facebook?

No. There are all kinds of ways third parties can access information
about you. For instance, you may not realize that, when you are playing
the popular games on Facebook, such as FarmVille,
or take those popular quizzes--every time you do that, you authorize an
application to be downloaded to your profile that gives information to
third parties about you that you have never signed off on.

Does Facebook share info about users with third parties through things such as Open Graph?

Open Graph is a new concept for Facebook, which unveiled it last month at its F8 conference.
It actually is basically a way to share the information in your profile
with all kinds of third parties, such as advertisers, so they can have a
better idea of your interests and what you are discussing, so Facebook
can--as portrayed--"make it a more personal experience."

The theory behind Open Graph--even if it has not implemented it--is its whole business model, isn't it?

That is the business model--Facebook is trying to get you to share
as much information as possible so it can monetize it by sharing it with
advertisers.

Isn't it in Facebook's best interest to get you to share as much info as possible?

It absolutely is. Facebook's mission is to get you to share as much
information as it can so it can share it with advertisers. As it looks
now, the more info you share, the more money it is going to make with
advertisers.

Isn't there also a security problem every time it redesigns the site?

Every time Facebook redesigns the site, which [usually] happens a
few times a year, it puts your privacy settings back to a default in
which, essentially, all of your information is made public. It is up to
you, the user, to check the privacy settings and decide what you want to
share and what you don't want to share.

Facebook does not [necessarily] notify you of the changes, and your
privacy settings are set back to a public default. Many times, you may
find out through friends. Facebook is not alerting you to these changes;
it is just letting you know the site has been redesigned.

Can your real friends on Facebook also can make you vulnerable?

Absolutely. Your security is only as good as your friend's security.
If someone in your network of friends has a weak password, and his or
her profile is hacked, he or she can now send you malware, for example.

There is a common scam called a 419 scam, in which someone hacks your
profile and sends messages to your friends asking for money - claiming
to be you--saying, "Hey, I was in London, I was mugged, please wire me
money." People fall for it. People think their good friend needs
help--and end up wiring money to Nigeria.

A lot of Web sites we use display banner ads, but do we have to be wary of them on Facebook?

Absolutely: Facebook has not been able to screen all of its ads. It
hasn't done a great job of vetting which ads are safe and which are not.
As a result, you may get an ad in your profile when you are browsing
around one day that has malicious code in it. In fact, last month, there
was an ad with malware that asked people to download antivirus software that was actually a virus.

Is too big a network of friends dangerous?

You know people with a lot of friends--500, 1,000 friends on
Facebook? What is the likelihood they are all real? There was a study in
2008 that concluded that 40 percent of all Facebook profiles are fake. They have been set up by bots or impostors.

If you have 500 friends, it is likely there is a percentage of people
you don't really know, and you are sharing a lot of information with
them, such as when you are on vacation, your children's pictures, their
names. Is this information you really want to put out there to people
you don't even know?

Note:-This interview, "Five Hidden Dangers of Facebook," was originally published on CBSNews.com.

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