I am a Madrich for a youth camp, at our camp the parents of our Chanichim can send them faxes. Is it wrong for a Madrich to scan these faxes for any info that could shock the kid? I feel that by reading the faxes we are invading their privacy. Others feel that it would be better than the Chanich receiving some shocking news about their family or the sort without us knowing about the situation.

There is a prohibition- given the power of a "Herem" by Rabbeinu Gershom- that forbids reading someone else's mail without permission. If your camp adopts a policy of reading faxes, it must inform the Chanichim and their parents before they decide to attend so that their registration, despite the warning, would indicate authorization (Does the camp intend to open envelopes sent in the regular mail or listen in to phone conversations or on visits?).