By now you’ve likely heard that Facebook has published a study in which the social-media giant manipulated the content on users’ feeds to see if it had any effect on said users. The study found that users who were exposed to more “negative” feed items tended to post more negative posts as well. The same was true of the reverse.
Many Facebook users were appalled by the news, and now the Wall Street Journal’s tech site Digits reports that the Electronic Privacy Information Center, a privacy watchdog group, has filed a complaint with the Federal Trade Commission (FTC) about the study. The group claims that Facebook’s User Agreement did not inform users that their data would be available to researchers.
Facebook denies this, saying that this “research” is covered under the section of the agreement that asks “permission to use their information to prove and enhance the services” Facebook offers.
While it’s unclear whether the complaint will progress or not, one thing is for sure: small-business owners can learn a lesson from Facebook about User Agreements.
What Is a User Agreement?
A User Agreement is a legal agreement between a business and its customers that describes what kind of customer information the business will use and how it will use it. Usually, a customer must agree to these terms before it can use the business’s product or service. You’ve probably clicked through several of these agreements on the websites you frequent – likely without reading them.
Even though most users accept these agreements without reading them, business are held legally responsible for violating the terms set forth in the agreement. For example, a judge recently allowed a lawsuit against professional-networking site LinkedIn. According to Insurance Journal, LinkedIn allegedly violated its User Agreement by emailing its users’ contacts just a few more times than was allowed by the agreement.
If your business offers products or services that require you to collect customer data, you should have a User Agreement. What is considered customer data? Take a look:
- Phone numbers.
- Email addresses.
- Credit / debit card information.
- And more.
User Agreements – if used properly – can help protect a business from lawsuits by clearly stating the business’s intentions. But if you don’t effectively communicate with your customers, you could find yourself in the middle of a legal battle anyway.
How Good Communication Prevents Liability Lawsuits
Arguably, the primary issue with Facebook’s User Agreement is its lack of specificity. Facebook can claim that “research” helps “enhance” users’ experience, but the opposition can argue that the agreement wasn’t clear enough.
There should never be any gray area when it comes to your business’s products or services. When a customer expects one thing and receives another, they can sue your business. This type of lawsuit is called a professional liability lawsuit.
To prevent these costly and inconvenient claims, your business needs to keep the lines of communication open. And remember, good communication extends beyond User Agreements. It should be incorporated into every facet of your business. That means you should…
- Have effective contracts. If you provide services, you should use detailed, written contracts that include information about what you will and will not do, terms of payment, deadlines, and more. That way, clients understand exactly what they are getting. You may even choose to go over the contract with your client to make sure everything is clear.
- Inform your customers when things go wrong. Sometimes, issues beyond your control may cause you to deviate from the plan – a project is delayed or a customer’s order is late. When this happens, don’t avoid your customers. Inform them of the issue as soon as possible and make a plan to address it.
- Keep in touch. It’s important to keep in touch with clients, even when they stop contacting you. So say, for example, you run a medical office, and a patient cancels an appointment but fails to reschedule. You should be proactive about securing another appointment because if your patient develops a health issue, they can blame you for not catching it sooner.
- Never make promises you can’t keep. In certain industries, it’s easy to exaggerate your products or services – but resist the urge. If you promise one thing and deliver another, you could be slapped with a professional liability lawsuit. This is also true for professionals who encounter problems outside their area of expertise. If you don’t refer your clients to specialists, it could come back to bite you.
These are just a few steps you can take to reduce your risk of a professional liability lawsuit. Unfortunately, because of the human factor at play here, you can’t always avoid a lawsuit. A customer can sue you whether or not you’ve done anything “wrong.”
That’s why insurers provide Professional Liability Insurance (aka Errors and Omissions Insurance). It helps you pay for lawsuits over issues related to your work – including miscommunications.