I understand that moderators and admins have a way to read members pms without them knowing it, How are they doing this?
It can't be done by default, but there is a plugin allowing them to do it.
http://mods.mybboard.net/view.php?did=218
And even without that, anyone who has access to the database can read PMs.
I've always thought that calling them "private" messages is a misnomer. There's no such thing as a message that can be "private" from the site admin. Everyone should know that.
They are private in that the public board and its members can't read them! Even some organizations read their employees emails. Anytime you use someone else's network, you risk that! The best thing to keep in mind is not to put anything too private anywhere on the web!
So this is mainly so on these self made boards then?