There are numerous software applications that allow users to share things like music, videos and games using what's called a peer-to-peer network.
"You can go online and download some software onto your computer that connects you with a network of other users, and you can share files with them," said Mary Engle of the Federal Trade Commission (FTC).
For example, users can download songs off your computer, and you can search theirs. The FTC says the problem is users may end up sharing more than they realize.
"We're concerned that consumers may accidentally share folders that contain private documents that they don't intend to share," said Engle.
Identity theft is happening. The feds recently nabbed a man for using a file sharing programs to steal tax forms and credit reports. They say he opened fake accounts and bilked people out of tens of thousands of dollars.
There've been other security breaches.
"Where employees will use laptops that they use in a company, and then bring them home; and children would install software and the files, which were taken out of the office, might be shared on a network," said Sam Berlin of LimeWire.
How can it happen? When you install the software, there's a designated folder where you save any files you download off the network. The problem is that sometimes the folder is installed in a place such as "My Documents", where you store personal information.
Or, some people move it to "My Documents" not knowing the risk, and sensitive material may now become accessible.
"And you've got identity thieves who are searching these sites, and what they find is lots of personal information like social security numbers, credit card information, financial information," said Engle.
The government is working with file sharing sites to improve privacy protections and says the industry is taking action.
The key to safety is to keep your shared files separate. Instead of going to an existing folder that may have your personal information, create a new folder and call it file sharing -- then you should be okay.
For more information:
Practical tips from the federal government and the tech industry to help you be on guard against Internet fraud.
LimeWire is a fast, easy-to-use file sharing program that contains no spyware, adware or other bundled software.
Kazaa is one of the world's leading seek and find applications.
Share, Discover and Download music and videos. View other users' profiles, photos and music library.
FTC's Identity Theft Site
Site provides detailed information to help you deter, detect, and defend against identity theft.