The explosion of social networking has generally been a very good trend for companies that deal with mobile and Web-based platforms, but there are some drawbacks to the sheer number of people using social networks like Twitter and Facebook (News - Alert). Fraud is a pretty big deal, and is only getting bigger as more social networks continue to grow. However, recent reports are arguing that being an active social media user can help prevent identity theft and fraud.

The habits of people on social media sites are actually letting companies sift through those who are trying to use the Web to steal. In a single day, 400 million tweets are issued around the world. Facebook users are sharing 985 million pieces of content and 50 million brands are liked on that social networking site per day.

That much sharing of personal information can lead to people leaving themselves vulnerable, but there are companies out there that are arguing that being active can prevent online fraud. Companies like WePay, Kabbage and Affirm are just three online and mobile payment processing companies that are celebrating the massive social networking usage. These companies claim that they are able to go over years of social networking data that is hard to fake and use that to determine if their clients are who they say they are.

Knowing a person’s mother’s maiden name is easier than figuring out where their favorite vacation spot is when validating an account. Using social data also comes in handy when looking at just how long someone has had a social networking profile. It is pretty hard to fake years worth of postings and experiences.

The companies that use social data to evaluate risk in their financial dealings with customers know that the websites should not be the only factor they consider. They also know that taking those files into account can give the company more information about who they are taking a risk on when it comes to a loan or other financial transaction. Tools to reduce fraud come in all shapes and sizes and social data analyzation is a tool that is being used more often these days.