Third-Party Ads Give Facebook an 'Image' Problem

Facebook is facing down an image problem, and it's all about your images.

An untold number of Facebook's more than 200 million users have been feverishly forwarding instructions in the past week on how to opt out of being the social networking Web site's corporate pitchman, following warnings that third-party advertisers were creating advertisements with users' profile photos without permission.

The warning, which is still being passed around from friend to friend throughout the site, reads something like this:

"FACEBOOK has agreed to let third party advertisers use your posted pictures WITHOUT your permission. Click on SETTINGS up at the top where you see the Log out link. Select Privacy. Then select NEWSFEEDS and WALL. Next select the tab that reads FACEBOOK ADS. There is a drop down box, select NO ONE. Then SAVE your changes. (REPOST to let your friends know!)"

That's a lot of clicks — especially for something Facebook says is no longer necessary.

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While some third-party Facebook applications recently displayed ads with user photos without permission, officials at the Web site say they've "dealt with" those rogue networks, that the company has not changed its policies and that it continues not to sell "user information or content" to advertisers.

The announcement comes on the heels of Canada's privacy commissioner calling for better protections of Facebook users.

"The ads that spooked people were from rogue networks that have been dealt with (the ads were removed, some ad networks were banned from Facebook, and developers were warned)," Facebook spokesman Barry Schnitt wrote to FOXNews.com.

"It is possible that your photo could have appeared next to an ad, if (and only if) you had taken an action to associate yourself with the product — like become a fan of their page. Then, the ad would say something like, '5 of your friends have become a fan of product x.'"

One such ad used the picture of Cheryl Smith, of Lynchburg, Va., to hawk its dating service. Smith's husband recently spotted the advertisement touting "hot singles" in the area.

"I'm not joking," Smith wrote on her blog. "Not too long ago, my husband Peter had this ad appear on his Facebook page. Good thing we both have a sense of humor!"

Schnitt first addressed the controversy on Friday in a blog post titled, "Debunking Rumors about Advertising and Photos."

"If you see a Wall post or receive a message with the following language or something similar, it is this false rumor: FACEBOOK has agreed to let third party advertisers use your posted pictures WITHOUT your permission," Schnitt wrote.

The advertisements, which have been used by the site since 2007, had already been removed at the time of Schnitt's blog, which garnered at least 538 comments and more than 4,400 users who "liked" the post.

Facebook's ads, according to Schnitt's post, "always require" that users take an "express action" to link themselves with a product or service and that no data be shared with the third-party.

Schnitt referenced a "Celebs on Facebook" ad as an example of what may appear on your profile should a friend of yours becomes associated to such a product or service.

But that hasn't stopped some of Facebook users from complaining that the site needs work on its privacy settings.

"I believe they need to take a much more serious look at how they're approaching this," said Traci Knoppe, a blogger in St. Louis, Mo., who teaches amateurs how to create their own blogs. "They need to do a much better job dealing with this."

Knoppe provided instructions to opt out of the "auto-generated ads" and suggested that Facebook users forward the four-click procedure to "every single person" they know.

"It's a big concern considering how many millions of people are on Facebook posting family pictures and whatnot," Knoppe said. "The problem is that most people don't the terms of service."

According to Facebook's privacy settings, the site "occasionally pairs advertisements with relevant social actions from a user's friends to create Facebook Ads."

Users can select to appear in ads of "no one" or just their friends by making the appropriate selection under News Feed and Wall privacy settings.

"These respect all privacy rules," the site reads. "You may opt out of appearing in your friends' Facebook Ads below."

While Facebook says it has addressed the problem, Schnitt called on users to be on the lookout for misleading advertisements.

"We're committed to remaining vigilant in enforcing our policies to prevent bad ads from appearing on Facebook — whether served by us or a third party," Schnitt wrote on Friday. "But we also need your help. If you ever see a misleading ad or believe it violates our policies, report it to us."

Meanwhile, Parry Aftab, an expert on Internet and privacy law who runs WiredSafety.org, said her organization had not received "large numbers" of complaints regarding the potential misuse of profile photographs.

"This isn't hitting our radar so it must not be a big issue in terms of the number of people it's happening to," Aftab told FOXNews.com. "I consider [Facebook] to be pretty good corporate citizens."