NBCNews.com

A screen capture of Progressive's automated responses that set the social media world on fire.

In the ugly battle of Web users vs. insurance companies, a lot of blood was spilled this week.

We've known for a while that hell hath no fury like an Internet user scorned. But at the intersection of social media, consumer frustration, anxious lawyers and heavy-handed regulations you'll find a particularly tricky corner of the Web. Insurance firms, which have always been a magnet for complaints anyway, lie at precisely this crossroads.  

Increased competition has led insurers to employ high-profile marketing gimmicks, like geckos or touchdown dances, in an effort to become household names with friendly reputations. That means it's become necessary for them to establish a social media presence. Progressive's "Flo" character, for instance, has her own Facebook page, with hundreds of thousands of fans. But inviting social dialogue sometimes means inviting trouble, as Flo and her handlers found out the hard way this week.

Progressive encountered a Twitter revolt after the family of a woman killed in a car crash wrote a blog post criticizing the way the firm fought to avoid paying a claim. The post went viral, and the insurance giant then compounded its problems by spitting out automated tweets in response.

Experts who talked about the incident this week said Progressive fell into a trap that often catches large companies as they stumble around the social media world.

"The original response sounded genuine," said Jason Falls, a digital marketing consultant who helped health care firm Humana set up its social media program. "But the fact that they auto-responded the same statement to multiple people showed it was just a copy-and-paste job. More often than not, when that happens, it's not the technology that's to blame. You can blame it on the legal and compliance teams saying, 'You can say this and only this.' It makes you look cold and insensitive."

Both sides have willingly joined the insured-vs-insurers Internet fight. Insurance firms increasingly use the Web as a weapon against fraud, while consumers band together to demand better service, or to appeal denials of coverage. Both can claim victories. There are plenty of stories of insurance investigators who catch disability recipients bragging about completing triathlons on their Facebook pages or tweeting about a great trip to Paris while claiming depression. Meanwhile, earlier this month, a social media firestorm caused Aetna to back down and agree to cover colon cancer treatment costs for an Arizona patient who'd already exceeded his lifetime cap. A flurry of angry tweets really can make a big company reverse course.

'Shame on you'
Fall said he's used to seeing nasty comments pile up on insurance company blogs, Facebook pages and in Twitter feeds.

"It does make me cringe, but I also think it comes with the territory," he said.

It doesn't take long to find cringe-worthy comments on insurance company social media sites. Even days after the initial Progressive firestorm, comments left on Progressive's otherwise happy "Flo the Progressive Girl" Facebook page were dominated by vitriol: "Shame on you," says one. "Has Flo ever wondered why Progressive tries to get killers off the hook?" says another. Many writers called on the actress who plays Flo to quit.

Flo's hardly alone, however. When American Medical News did a survey of health insurance Twitter accounts last year, it found a never-ending stream of complaints:

*"Dear Cigna: How about, for the new year, you do something radical - like processing claims without 500 phone calls from me?"

* "Dear Humana, you've ruined my day. Worse, my wife's day. Way to CYA. I'm paying you to cover mine."

*"@Anthemhealth, so far u didn't send me my ID cards … kept me on hold for 25 mins and ur site isn't lettng me register. Nice service."

Insurance, necessarily, involves rejection. When you are in the business of frequently disappointing people, and making sure your rejections are lawsuit-proof, it's nearly impossible to run a free-spirited social media shop. Rachel Poor, who runs the social media marketing firm Thread Communications, said all heavily regulated industries face the Progressive dilemma.

"I think social media is still a sort of an enigma (to them). They all want to be there, they are told they should be there, but these companies are not used to people talking back to them in such a public forum," she said. "Ultimately, I think it will require insurance agencies to change the way they do business.”

Greg Matthews, a director at social media consulting agency WCG in Austin, said insurance companies often have to go into a Twitter or Facebook fight with one hand tied behind their backs.

Follow @RedTapeChron

E-mail a tip to Bob Sullivan

"Particularly in health care or financial services, there are privacy-related issues that you just can't discuss," he said. For example, if a patient complains about an uncovered medical procedure, the insurance company can't publicly talk about the patient. "People want you to be transparent and authentic all the time, but you just can't. ... It can be terribly frustrating.”

Falls said companies he works with expect the occasional public flogging after turning on a Twitter account, and they manage to survive by planning ahead.

"The thing I've tried to do with any client opening up its customer service channels -- you have to have a crisis communications plan mixed with a customer service plan," he said.  "You have to anticipate what will happen. ... Companies that dive in without a plan of attack for those situations are finding it difficult."

No stiff upper lip?
Automatic and formulaic responses have gotten many companies through old-fashioned media crises, Falls said. For example, journalists are often tolerant of canned answers, he noted -- but they typically don't fly on social media. If a Twitter response doesn't sound like it's written by a real person in response to a real person, the company is likely going to take a hit to its reputation. On the other hand, when million-dollar settlements might be at stake, no insurance company lawyer is going to be comfortable with a social media employee free-lancing responses. So Falls suggests a middle path.

"You have to have a lawyer on staff who can be on call and help your social media team craft communications in crisis situations," he said. "When you have a big publicity problem, you have your legal team working hand-in-hand with PR. Why wouldn't you do the same thing in the social media world?"

In general, he recommends that firms post a detailed, formal response on a website, and instruct their social media writers to tweet or post links to it, while adding personal notes separately. 

There are challenges, however: Many lawyers and companies don't have the stiff upper lip needed to ride out a social media crisis.

"Any industry that's heavily regulated will always have a layer of legal and compliance teams that have to be trained, and have to buy in," he said. "It can be done with the right legal team. But if you have a team that constantly says ‘no,’ it'll never work."

Matthews said effective social media must also be fast, and that's often unfamiliar territory for insurance firms.

"It means really changing processes that companies use. Rather than convening the executive committee for two days to make a decision about things, boil it down to the two or three people who can actually make a decision in hours and not days," he said.

It also means knowing who the influencers are in certain topics ahead of time, and planning to engage those people immediately when a crisis hits.

"It's not that hard to know these days who are the folks likely to be influential in this conversation," Matthews said. "You know what the top 10 issues that you might face are, and you know who is likely to be the most influential when those stories break, the people who might take your side or be opposed. ... Ask yourself how do you engage them. What is the content you can bring to bear that articulates your position rather than letting the public run wild. You can never control the conversation, but you can make sure your side is heard."

Finally, and most important, companies have to actually deliver on their promises, perhaps in a way they never have before, Matthews said. If a Twitter user complains and is asked to call customer service by a social media worker, that customer service experience had better be positive, Matthews warns. Otherwise, the angry consumer will have heavy new ammunition for waging a social media war.

"It really helps you find your skeletons in the closet," he said. "You have to have a mindset that you are grateful your customers are telling you what you are doing wrong, and you have the opportunity a chance to fix it. I know a lot of companies, maybe most companies, don’t feel that way, but that’s the only way to be successful in social media.”

* Follow Bob Sullivan on Facebook.
* Follow Bob Sullivan on Twitter. 

Welcome to the hangout on social media and privacy, powered by Google+, conducted on May 18. 

Our panelists are: Bob Sullivan, author of msnbc.com's Red Tape Chronicles, Jeff Fox of Consumers Union and Steve Rubel of the public relations firm Edelman. You can read a bit more about them below:

Questions were submitted at msnbc.com's Google Hangout or by tweeting using the hashtag #talkprivacy.

• Bob Sullivan is an award-winng journalist and author of The Red Tape Chronicles on msnbc.com. He also is the author of three books, including the 2008 New York Times Best-Seller, "Gotcha Capitalism," and the 2010 New York Times Best Seller, "Stop Getting Ripped Off!"
• Steve Rubel, executive vice president for global strategy and insights at Edelman, the world’s largest independent public relations firm. He’s also a frequent social media commentator.
• Jeff Fox, technology editor at Consumers Union. He was responsible for this month’s Consumer Reports cover story on Facebook and privacy. 

Facebook is apparently getting a lot more unfriendly.

Users are getting a lot more selective, deleting comments, photo tags and even friends at a record rate, according to a new study released Friday by the Pew Internet and American Life Project.

Pew is calling this phenomenon "the pruning" of social networks, and the study includes findings like this: 63 percent of users have unfriended people from their friends users. Another 44 percent have deleted comments made by others from their profile page, and 37 percent have removed tags from photos.

"Social network users are becoming more active in pruning and managing their accounts," says the report, written by Mary Madden, senior research specialist at Pew.

Users are also taking an active role in keeping their private information private, with 58 percent of users saying they use high-level privacy settings so only friends can view their pages. Women are far more restrictive, with 67 percent using the tightest privacy settings, compared to 48 percent of men. They lock down their accounts despite the fact that half of all users say they have "some difficulty" using the privacy controls.

The research seems to suggest that U.S. adults, who have so far shown little appetite for actively managing their personal privacy, are starting to get the hang of it.

"Social science researchers have long noted a major disconnect in attitudes and practices around information privacy online. When asked, people say that privacy is important to them; when observed, people’s actions seem to suggest otherwise," the report noted. The shift to more privacy on Facebook seems to belie this long-standing trend.

Perhaps regret has something to do with that.  The report found that 11 percent of Facebook users say they've posted something that they regret on a social network. Men are twice as likely to say so (15 percent to 8 percent). Users 50 and older, at 5 percent, are much less likely than young adults under 29 (15 percent), to express such regret. 

One area where there was a surprising lack of age gap: Overall privacy settings. While 23 percent of users 65 and over choose fully public settings, 22 percent of users 18-29make the same choice.

"The choices that adults make regarding their privacy settings are also virtually identical to those of teenage social media users," the report said.  "Private settings are the norm, regardless of age."

Young adults are more likely to "unfriend," however at 71 percent, compared to just 41 percent for the oldest users.

The Pew report is based on a survey of 2,277 U.S. adults conducted in May, and has a margin of error of +/- 3 percent.  In nearly all "pruning" related categories, and within nearly all age groups, use of privacy-related tools gained ground since the last time Pew conducted the study in 2009. Back then, only 30 percent of all users had untagged a photo, compared to 37 percent in 2011; and 56 percent had unfriended someone, compared to 63 percent in 2011. 

*Follow Bob Sullivan on Facebook     
*Follow Bob Sullivan on Twitter.  

"I should have flown with someone else or gone by car/’Cause United breaks guitars."  

Dave Carroll created perhaps the most successful gripe against a misbehaving company in the history of gripes, doling out Web-style justice with a remarkably viral -- and sarcastic -- music video. Now, he's trying to share his formula for success with other consumers on a website named Gripevine.com.

The site, which is free for consumers, is the latest in a crowded field of Web services that aim to act as a megaphone for aggrieved consumers who otherwise feel ignored when companies do them wrong.

Carroll suffered every traveling musician's nightmare in 2008. When he arrived at a gig after a flight, he found his guitar had snapped in two. The Canadian musician’s nightmare became United Airlines' nightmare after he posted the video.

Carroll's catchy and hysterical music video spread like wildfire in early 2009. As views crept upward toward 10 million, it was obvious that his song had become the gold standard in Web-based consumer revenge.

Carroll’s guitar catastrophe occurred six months earlier, when he tried to safely transport himself and his $3,500 Taylor acoustic from his home in Halifax, Canada, to Omaha, Neb. During a stop in Chicago, he says he and other passengers witnessed baggage handlers recklessly tossing bags on and off the flight. When he arrived in Nebraska, his instrument was critically damaged.

As recounted by Carroll, six months of haggling ensued. Carroll said he tried to make United fork over $1,200 to cover costs of repair. The airline refused. He said he'd accept the money in travel credits; United still wouldn't budge. As an act of desperation, he wrote the song and enlisted friends in the video production.

Within a few days, the song was viewed half a million times. Apparently spooked, United called offering Carroll $2,400 in cash and credits, which he said he declined, instead encouraging the airline to donate the money to a music school.  The song rocketed up the iTunes music chart, and Carroll received two Taylor guitars from the factory to use as props in a follow-up video.

And with the experience offering a nice lift to his band, Sons of Maxwell, it also opened him up to an entirely new world.

"When it went viral, I was caught off guard by the reaction,” he said this week. “I received about 10,000 emails in first three weeks. It was a conversation starter. People were telling me they liked the video, but they really wanted to share their own story. And they asked me for help. Obviously, I couldn't write a song for everybody. But I had a passion to help somehow."

After a couple of false starts, Carroll settled on Gripevine, which offers a simple-enough platform. Annoyed consumers post their gripes on the site.  An automated system informs the targeted company that a gripe exists and offers them a chance to solve the problem. If that doesn't work, Gripevine offers consumers a tool that "amplifies" the gripe, making it easy for social network friends to "support" the grievance by sharing it with their friends, who can then share it and their friends, and so on. 

"The more times your gripe is viewed and the more people you share it with, the more the company will be motivated to work with you to resolve your issue," says Gripevine on its instruction page.

Gripevine users will also earn "credibility points," which will help companies learn if the griper is just a serial complainer or a genuinely aggrieved customer with a beef.

Carroll is not providing the service out of the goodness of his heart -- companies will have to pay a fee to get access to a "dashboard" that makes dealing with gripes easy. Carroll is hoping that companies view the fee as a small price to pay to stem a looming social media train wreck.

Although Carroll lives in Nova Scotia and his business partners are in Toronto, Gripevine handles consumer complaints across the U.S. and Canada. The site launched earlier this month; so far, 4,000 consumers have signed up and a dozen companies have claimed their Gripevine pages, which Carroll said will be free for the first six months. The website is also in talks with several Fortune 1000 firms, he said.

"Every customer is a potential ‘United Breaks Guitars’ customer," he said.  "The right answer for them is solve each problem before it gets out of hand. ... United could have solved my problem with $1,200 in credits."

While there's an obvious pro-consumer tilt to such a service, and many companies have been initially skeptical when approached, Carroll says he genuinely wants to help both sides of the transaction. 

"We call ourselves the Switzerland of customer service,” he said. “Users can't use profanity. We encourage them to be solution-based. It looks like the small guy taking on big companies, and they are worried about brand bashing. But if you are a good company, you really do want to treat people right. ... Gripevine is one way you can turn these things around quickly."

Gripevine is not alone, though it is more sophisticated than most. A smartphone app called "ComplainApp" makes it easy for users to post their complaints simultaneously on various social networks. A website named GetSatisfaction.com provides tools for companies to set up their own online customer service communities, encouraging quick problem resolution. Straightforward Twitter and Facebook posts often get results, as many companies actively monitor social network for potentially damaging viral moments. And various complaint websites like ConsumerAffairs.com and RipoffReport.com (not to mention the Red Tape Chronicles) offer consumers a chance to simply post their frustrations and hope someone sees them and offers help.

The key for companies, Carroll says, is not waiting passively for the next clever trick that makes an angry consumer a Web sensation.

"When I had this problem, at the beginning, I had no social media clout," he said.  "If companies are solving people's problems based on how many Twitter followers they have, well, that's really short-sighted."

*Follow Bob Sullivan on Facebook     
*Follow Bob Sullivan on Twitter. 

More content from msnbc.com and NBC News

• Cape Cod dolphin strandings keep rescuers working OT
• Leaked: Climate skeptics’ strategy for schools
• Study: 1 in 8 voter registrations have errors
• Restaurant settles lawsuit over N-word receipts