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Tuesday, July 3, 2012

Underage and on Facebook

Facebook is mulling over letting children below the age of 13 join its network, but with so many signed up already, what difference would it make? 

FACEBOOK'S minimum age should be 21. This argument mooted by CNN blogger John D. Sutter will no doubt get the support of many parents who worry about safety and privacy issues on the social media network. That is, those parents who have not secretly signed up, or helped to sign up, their children on Facebook.

Facebook (FB) already has an age limit 13 years old but the reality is that many “underaged” children already have their own profiles on the site, parents' consent notwithstanding.

In fact, it is estimated that some 7.5 million children below the age of 13 are currently on FB, out of its total 900 million plus users worldwide.

This shows that the minimum age requirement on FB is just a number. Facebook does little, if anything, to enforce it, and one can simply lie about their birth date to circumvent the rule.

So why the charade?

As suggested by the Wall Street Journal, which first broke the news of the social media giant's plans to open up to tweens and even younger kids, Facebook was feeling the heat from the American authorities in relation to the Children's Online Privacy Protection Act (COPPA).

The Act stipulates that online services catering to children below 13 would need to obtain the consent of their parents before collecting data from them. COPPA also requires that parents be given the ability to review, revise and delete their children's data.

Hence, with the number of pre-teen children registering on the site growing by day, Facebook knows it can no longer turn a blind eye to its minefield. Coming clean is perhaps its only option in defending itself from any potential legal action.

As it acknowledged in a statement: “Enforcing age restriction on the Internet is a difficult issue, especially when many reports have shown that parents want their children to access online content and services.”

Facebook founder Mark Zuckerberg himself had earlier said he would like to see kids under 13 use FB “more honestly and in compliance with the law”.

“My philosophy is that for education you need to start at a really, really young age... Because of the restrictions, we haven't even begun this learning process... If they're lifted then we'd start to learn what works. We'd take a lot of precautions to make sure that they (younger kids) are safe...,” he was quoted.

The conspiracy theorists of course say freeing the shackles is one way for Facebook to recoup its losses after a disappointing debut at the share market. Widening its user base will certainly broaden its revenue-raising opportunities, especially in the mobile apps and ad sector, and add to its market value.

Then there is the brand loyalty factor getting them young is the best way to get users hooked for the future, and guard against any possible defection to “cooler” social media networks to come.

Whatever the motive, the reality remains stark there is a high number of active FB tweens and they can no longer be ignored.

Choy: Many parents of children who are being bullied online feel they can’t do anything about it.

Time to Like

As he sees it, officially opening up to the under-13s can be a positive move, says CyberSecurity Malaysia chief executive officer Lt Col (R) Prof Datuk Husin Jazri.

“By officially allowing children to sign up, Facebook can keep tabs on how many Facebookers below 13 there are,” he opines.

In Malaysia, for instance, it is no secret that many tweens have their own FB accounts, with most having signed up either with the consent and help from their parents, siblings or close relatives; or by “cheating” Facebook, that is, changing their birth date to make the computer system accept them as above 13.

It is not clear how many Malaysian children are now online but with some 12.5 million Malaysian FB users recorded this year, it is safe to say that there are many.

In fact, global social media and digital analytics company Socialbakers estimated that some 2.2% of Malaysian Facebookers were aged 13 and below last August (around 248, 528). That is a rough estimate at best; with our below-18 population totalling up to 11.2 million (approximately 2.87 million children are in primary school), it is difficult to pinpoint how many FB minors are signed up on a fake age.

Malaysian Communications and Multimedia Commission (MCMC) chairman Datuk Mohamed Sharil Tarmizi agrees that removing the token age restriction is perhaps the most effective way to protect our children on Facebook.

This will create openness among the tweens and their parents, says Sharil.

“Children will not need to hide that they have FB accounts any more and would be encouraged to share their online experiences with their parents. If they do not bypass the protection measures (as kids nowadays are very IT savvy), the children should get the age appropriate online protection they need against the adult world' of Facebook,” he adds.

However, both agree that this will only be effective if Facebook fulfils its commitment to introduce a new suite of tools for parents to keep their children safe when they register a FB account and interact on the social networking site.

Sharil, who is also vice-chairman of the International Telecommunications Union (ITU) Council Working Group on Child Online Protection (COP), a specialised organ of the United Nations based in Geneva, Switzerland, reminds parents that children are minors first and foremost.

“Children under 13 are typically in the primary school group and need extra supervision, guidance and care,” he stresses.

Husin proposes that specific accounts for those below 13 be created with suitable contents and safeguards to enable parents and guardians to continually provide assistance as well as monitor the online activities of these young Facebookers.

Sharil: ‘Children need guidance and supervision. Online tools and technologies can never replace the care and guidance that parents can give’
“Facebook for those below 13 should be categorised as a special account, different from the adult Facebook accounts. They should introduce some kind of system to ensure that the children obtain parental consent before they get accepted to sign up, and whenever a child requests for or accepts a new Facebook friend, parents should be alerted,” he adds.

Dangerous playground

Still, as many parents would be deigned to admit, no matter how vigilant you are, it is still a big bad Web out there.

“Parents can only guide and monitor their children, they cannot really change the environment,” says a father-of-three who only wants to be known as Arshavin.

You will still need the help of the policy makers and service providers, among others, to make the Internet, and specifically Facebook, safe for children, he adds.

“No matter how well-trained or educated your children are, some places are just off limits, even if you go there with them.

“I read this one comment that I think captures it well will you let your elementary school child attend a college or adult party?'. You won't, right?” he poses, warning that some parents might be lulled by a false sense of security for their children on Facebook if the new ruling is implemented.

Social media specialist Jasmin Choy agrees, highlighting cyber-bullying as one danger for young children on FB. The problem is intensified as many parents are not equipped to deal with it, she says.

“Many parents of children who are being bullied online feel they can't do anything about it. Then there are those who just don't know what is happening to their kids in cyberspace, or those who are not giving enough guidance to their kids and are becoming bullies online,” she says.

Opposing the social media network's plans to open up their membership for children under 13, the mother of two relates a recent cyber-bullying case close to her heart.

“It happened to a friend's child who is sensitive and fragile. She was already being subtly bullied online when the girls ganged up on her and made her feel like she was stupid. The problem was, the mother didn't know what to do about it. If she intervened, the daughter would be very embarrassed. On the other hand, if the mum didn't intervene, these girls would go on bullying her daughter.”

Another red flag for children, she warns, is online porn and sexual predators.

“Many parents have no idea how much porn is being served up to the kids online. They think they have some idea but are often shocked when they discover how accessible porn is to their six- to13-year-olds.”

As Choy highlights, one only needs to go to some of the game apps on FB to receive porn advertisements.

“Many pop up even on innocent-looking Facebook games. Besides, curious kids are going to share images and if there's FB and Twitter they will see it,” she says, advising parents to “prepare” their children by educating them about the birds and the bees at an early age.

“We can't be prudish about it. They are going to see it anyway, so why not explain to them before trouble brews.”

The main danger she foresees, however, is the breach of privacy.

“Think about all the times we chatted with a young kid on FB. We must have at least mentioned the child's name, asked them how their day was... things like that. We tend to forget the dangers when we are having fun online. Bad people can easily glean information from the chats the adults have with young kids on FB posts,” she says.

Choy also strongly believes that pre-teens are particularly vulnerable because most do not have the maturity to handle problems related to FB or be aware of the dangers.

“Even if they are aware of the dangers, they can't often see the danger in front of them. Even adults don't react fast enough to FB risks, what more children of that age,” she says.

Along with the threat of paedophiles, there is also worry that young children will be subjected to unscrupulous advertisers and marketers on Facebook, or have their personal data sold to advertisers.

Not surprisingly, Zuckerberg has already been lobbied by a coalition of consumer, privacy and child advocacy groups to keep children's data confidential and the site ad-free for the below-13s in the United States.

For bank officer Aslina, addiction is her big worry.

“Just like adults, kids tend to spend way too much time on Facebook and can get addicted to it. Instead of studying or socialising with friends and playing games or sports, they will be logged on FB.”

And, cautions teacher Mary K, parents might not be able to withstand another pressure should FB open its doors to pre-teens peer pressure.

“Now they will be pressured to join because all their friends are on it. It will be a difficult time for parents, “ she says.

Arshavin agrees.

“I asked my 16-year-old daughter why she is on FB, and she said it was to watch what her friends are up to. But when I asked her to log off, she just whined about what she would be missing,” he says.

Calling FB a “different beast altogether”, Choy who is a proponent of the Internet as a study tool vows to keep her children away from it as long as she can.

“I really believe all young kids should have access to the Internet. My six-year-old can Google search for any information related to his hobbies or studies at any time with the tablet. YouTube has given him access to various documentaries he can watch and learn from. And why not? Technology and the Internet have made learning exciting. It has allowed my children to think out of the box. I just don't think they should have an FB account at an early age,” she says.

If parents do decide to let the child open a FB account, she adds, they would need to constantly talk to them about the hazards and teach them good cyber habits.

“Explain over and over again why they should not reveal sensitive information like their names, location of the moment and place of residence. And check, check, check their FB settings,” she stresses.

And constantly but silently read their children's postings to check for trouble, she adds.

This is something Alina does diligently with her two pre-teen children who are registered on FB.

“In the beginning, I was worried that I was making the wrong decision to let them get their own profiles on FB. But I read up on it and made sure that I know what is in store for them. Then I went through all the safety and security features available on FB with them before we registered.”

Most importantly, she adds, she always reminds them to be as cautious online as they would be in the real world.

Sharil agrees children should be taught as early as possible that rules and regulations exist online just as they do offline, and that there are dangerous areas online just as there are dangerous areas or things in the real world.

It is parents' responsibility to cultivate security awareness in their children and educate them on safe Internet usage, says Husin.

“Parents must be alert of any unusual activities of their children on the Net and take the appropriate action to rectify if their child gets caught in any undesirable activities online.”

Sharil, however, reiterates that parents are the best judge of whether their child is ready for Facebook themselves.

“It all goes back to the basic skills of parenting and instilling good moral values in their children. Children need guidance and supervision. Only parents can do this effectively. Teachers, NGOs and the broader community can help but they can never replace the parent,” he notes.

Crucially, parents are at the frontlines of their children's defence, says Sharil.

“Parents should continue to monitor their children's online activities while encouraging appropriate online behaviour. They should not totally depend on Facebook's parenting' facilities. Online tools and technologies can never replace the care and guidance that parents can give.”

Ultimately, he adds, it is extremely important for parents and guardians to become good role models for their children when they are online.

By HARIATI AZIZAN sunday@thestar.com.my

Malaysian law firms urged to embrace technology


GESTURE OF APPRECIATION: Liew (left) accepting a souvenier from Ng
at the Legal Technology Exhibition and Forum 2012.


KUALA LUMPUR: Malaysian law firms must adopt technology solutions to better manage and serve their clients, or risk being left out.

"It is timely for local firms to tap into the benefits technology can offer the legal profession," said Datuk Liew Vui Keong, Deputy Minister in the Prime Minister's Department.

"While it would be a costly exercise initially, it will certainly be worth it in the long run," he said.

Liew was speaking at the launch of LegalTech Forum 2012, a two-day conference and exhibition on the use of technology in legal processes and proceedings, hosted at the Putra World Trade Centre.

The case for technology upgrades has become particularly pressing with the recent passing of the Legal Profession (Amendment) Bill 2012 by the Dewan Rakyat, which aims to liberalise the legal profession and build Malaysia into an international Islamic financial hub.

This means foreign law firms will soon be allowed to open offices here and foreign lawyers can practice in the country, increasing the level of competition for Malaysian lawyers and law firms.

Liew pointed out that when international law firms start setting up offices here, they will bring not just their expertise, but technology as well. "This is why local firms must ensure that they are able to collaborate and compete with these new players," he said.

He said the courts here have already moved to adopt technology solutions, giving the implementation of the court e-filing system in March 2011 as an example.

Change is in the air
 
The overall environment of the legal industry and mindset of its practitioners is one of comfort, some pundits believe.

"For too long the legal industry has been comfortable in doing things the same way, (so much so) that many don't see the need to innovate," said Joycelyn Ng, managing director of event organiser JFPS Group Malaysia.

But the tide is changing, she said, as demonstrated by the bulk of queries about the LegalTech Forum coming from local firms and practitioners.

"Many of our exhibitors, including Konica Minolta and ServTouch, were delighted at the opportunity to showcase their solutions, specifically to legal practitioners, because there has been no platform for them to do so previously," Ng said.

She shared that the field of data management has been of particular significance. "This technology is especially important for the smaller law firms, which are less familiar with such systems and rely heavily on staff hired solely for maintaining a manual system for storing and tracking documents," she said.

"The need to retain such staff with knowledge on how your company's entire data management system works can turn out to be a costlier exercise than digitising the whole process," she added.

According to her, the inaugural LegalTech event has had much positive response, with global vendors and regional buyers expected to complete transactions worth more than US$20mil (RM60mil) on the premises before it ends on June 15.

Thirty-two exhibitors are showcasing their solutions at the event, and so far some 2,500 visitors have passed through its doors.

By GABEY GOH  bytz@thestar.com.my

Related post:
Ethics vital for lawyers! Force to sign documents & hit client?

Monday, July 2, 2012

After Barclays, the golden age of finance is dead

Retribution and regulation are sure to follow the Barclays scandal, but if the City is shackled, Britain as a whole will suffer

Everyone's a loser: punishing the City is inevitable following the Barclays scandal, but the whole of Britain could suffer Photo:

Just when you thought bankers could sink no lower in public regard, they’ve done it. News that Barclays has been found guilty of repeatedly falsifying the interbank rate – sometimes for the personal gain of traders, sometimes to make the bank itself seem more creditworthy than it really was – tops off another calamitous week in the seemingly never-ending litany of banking misdemeanours.

Coming hard on the heels of the chaos surrounding an IT breakdown at Royal Bank of Scotland, it is as if bankers are actively out to confirm their reputation for recklessness, incompetence and self-enriching disregard for the interests of customers and the wider economy.

At a time when the political and regulatory backlash against finance is already at fever pitch, much of it ill-thought out, counterproductive and economically harmful, there could scarcely have been a more spectacular own goal. And it doesn’t end there. Banking faces a whole new raft of separate regulatory strictures over the mis-selling of interest rate swaps to business customers.

A year ago, Bob Diamond, chief executive of Barclays, told a committee of MPs that it was time to put the crisis behind us, move on and stop apologising for the failings of the past. He should be so lucky. Not since the Thirties has finance been so much in the dock. On and on the combination of retribution and regulatory crackdown will go until banking is once again thought sufficiently imprisoned to be safe. European policymakers will delight in the ammunition they have been given to rein in the Anglo-Saxon bankers and make them subject to the rule of Brussels and Frankfurt.

Many have already said it, but it is one of those observations that bears constant repetition: in all my years as a financial journalist, it’s hard to recall a case quite as shameful as this – and I’ve certainly seen a few.

There is no industry in all commerce that relies as much on public trust and reputation for probity as banking. We have seen what happens when trust is lost: we get the legion of banking runs that lie at the heart of the financial crisis; people run for the hills and the economy grinds to a halt.

To have American regulators accuse Barclays of lies, deception and manipulation is an appalling indictment of one of the oldest and most respected names in British banking. It is like discovering that your local branch manager has routinely raided your hard-earned savings to finance his champagne lifestyle.

Entrusted with the public’s money, bankers have to be seen as whiter than white, pillars of their community and morally beyond reproach. All these old-fashioned virtues seem to have been lost in pursuit of the easy rewards of international finance. “My word is my bond” – once one of the sacred principles of City finance – has become reduced to a laughable parody of itself.

Now, it may well be unfair to single out Barclays. We already know that at least 20 other banks are under investigation for alleged manipulation of interbank interest rates, including most of the other UK high street banks. It could be that others are equally at fault. We know about Barclays only because in a practice that City lawyers sometimes call “rowing for the shore”, it has decided to abandon the flotilla of co-defendants and settle with regulators.

Downside of plea bargain

In so doing, it may have succeeded in winning both a lower fine and immunity from criminal prosecution, as a corporate entity at least, though the individuals involved may not escape. The downside of such plea bargains is that they involve admission of guilt. The regulator gets free rein to be as critical as it likes, while the mitigation of any defence there might have been is lost.

That these practices appear to have been endemic, not just at Barclays, but across a wide range of international banks, neither excuses nor explains what happened.

It’s interesting that when the fines were first announced on Wednesday, there was barely a flicker of recognition in the Barclays share price. The investigation has been known about for some time, the misdeeds complained of date back three or more years and are therefore water under the bridge, and many in the City judged Barclays to have got off relatively lightly.

But as the night wore on, the seriousness of the situation began to sink in. Bob Diamond, the Barclays chief executive, long despised by regulators found himself politically friendless, too.

As calls for his head mounted, the share price began to plunge. The key concern about Barclays has always been that it is a “black box” operation that only Bob himself properly understands. At a time of growing financial chaos, Barclays could be left leaderless, with the investment banking brains behind much of its recent profitability and successful navigation of the banking crisis thrown to the wolves.

“Bob is mistrusted in the City,” says one seasoned fund manager, “but he’s the glue that holds the whole thing together. Without him it might well disintegrate.”

What went wrong?
 
So what really went wrong here? The London Interbank Offered Rate, or Libor, and its companion, Euribor, are two of the most important benchmarks in finance. Essentially, they are an aggregate of the rates at which banks lend to one another. They are also used to help price a vast array of lending decisions and derivative products, including mortgages.

Yet even in financial markets, it is not widely understood how these benchmarks are arrived at. Unbeknown to senior managers at Barclays, some traders, starting in around 2005 and stretching through to 2009, began persuading those responsible for compiling Barclays’ input to distort the rate in a manner that made their own derivative positions more profitable, hence the excruciating series of incriminating emails cited by regulators.

This was bad enough, but if it had stopped there, the damage would probably have been containable. Even the best of internal controls cannot prevent the determined rotten apple. What has transformed this case into something much more serious is that at the height of the banking crisis “senior managers” themselves – it is still not clear exactly who – ordered that the Barclays submission be manipulated so as to make it look as if the bank was receiving more favourable funding terms than it was. Deceitful behaviour seemed to have become endemic, stretching from top to bottom.

To the extent that there is a defence for such blatant deceits, it runs something like this; everyone else was doing the same thing. Rival banks that were plainly in even worse shape than Barclays were making Libor submissions that appeared to show they were enjoying more favourable wholesale funding rates than Barclays was. On the “if you cannot beat them” principle, Barclays determined to join them.

If this version of events is correct, the whole escapade doesn’t look as bad as it first appears. It is hard to identify who exactly lost out as a result of these fictions. Since there was no interbank funding to speak of at the height of the crisis, it may not in any case have mattered very much.

Even so, it’s quite damning enough. There appears to be nothing bankers will stop at in order to feather their own nests. With tempers already at boiling point over egregious levels of pay and aggressive tax avoidance, the whole affair has now taken on a life of its own.

When the history books are written, this may be seen as a defining moment, the point at which public anger with the banks bubbled over into something much more seismic in its consequences than the general atmosphere of bank bashing we have seen to date. Despite the crisis, there has been a sense of back to business as normal for the City these past three years.

There have been few signs of behavioural change. But this may be the straw that breaks the camel’s back.

Market and regulatory pressures are already laying waste to great tracts of previously highly lucrative banking activity. A major cull of investment banking jobs is expected over the next year, with once bumper bonuses and earnings much reduced on top. Retribution and punishingly restrictive levels of regulation won’t be far behind.

Those who believe that Britain has become too dependent on finance for its own good will no doubt welcome this humbling of an apparently out-of-control City, but they should be careful what they wish for.

Finance’s golden age may be drawing to a close; with no new industry or manufacturing renaissance coming up in the wings, it is not entirely clear what’s going to take its place as a source of British wealth, jobs and tax revenues. It is not just finance for which hard times lie ahead. - Telegraph