Insurers and government bodies watching online behaviour

Big businesses and government authorities are checking up on people by looking at their online activity, including checking out social network profiles.

"Social media is already an important tool for industry to engage with customers and its use is only likely to grow," explained Tracey McDermott, from the Financial Conduct Authority (FCA).

Insurance companies

The City regulator is looking into whether financial sector businesses, particularly insurance companies, are using Facebook and Twitter to set premiums higher or lower.

The FCA said it is checking concerns about insurers using information from social media profiles to "risk-assess" applicants. A report is expected by January.

Taxes

HM Revenue & Customs are also using sophisticated new computer systems to check suspicious activity on social networks, such as lifestyle choices that don't fit with tax declarations.

The new tool, called 'Connect', automatically flags potential tax underpayers using information from Twitter and Facebook, in addition to sources such as the Land Registry and Companies House.

Richard Morley of accountancy firm BDO explained: "If you've paid a suspiciously low amount of tax, HMRC will know full well if you are lying if the evidence is splashed all over Facebook."

New powers

At the moment, only information that is publicly available makes up HMRC's Connect database, although this could soon change with the introduction of new data-gathering powers.

Websites and social networks including Facebook, Instagram and Twitter can now be forced to provide HMRC with private personal details of members and users if they are deemed necessary as part of a wider tax investigation.