Identity theft is often thought of as a problem that only affects individuals, but it’s important to know that business identity theft is also a reality. Businesses with a physical or online presence are at risk for identity theft, which can lead to financial loss and reputation damage.
There are many ways to protect your business from identity theft, and the first step in doing so is knowing what to look out for. Here are some signs that you may be at risk of identity theft.
Businesses Face an Uphill Battle Against Identity Theft
Thieves utilize a variety of tactics, similar to personal identity theft, to get corporate credentials and use them to submit bogus tax returns or open bogus lines of credit in the firm’s name (business lines of credit are generally much higher than consumer lines of credit).
When it comes to suspicious bank account activity, an individual might notice it quite immediately, but it may take a business a long time to uncover. This is especially true if your business does a high volume of transactions.
It will help you to know exactly what is identity theft, the methods used, and how you can protect your business with outside help.
Is Your Business at Risk? Consult this Checklist
- The information on your state’s company registration should be safeguarded and maintained.
- Keep track of your company’s bank accounts and credit lines to ensure their safety.
- Keep track of your company’s credit and trade accounts.
- Your company’s credit file should be safeguarded and checked on a regular basis.
- You must safeguard your company’s data.
- Workplace computers and networks should be safeguarded.
- Your website and online presence should be safeguarded.
- “Trust, but verify” is a smart strategy for protecting your company from fraudulent orders.
- Be on the lookout for strange activities.
The Financial Consequences of Business Identity Theft
Organizational income loss or financial theft may have a severe impact on your company and its employees, particularly in small and medium-sized businesses (SMBs). For example, the firm may be unable to pay its employees, pay employment and income taxes, or purchase new items.
Furthermore, because these sorts of accounts frequently need a personal guarantee from one or more of the business’s owners, you may be held accountable for false corporate debt and credit lines until you can show the accounts were fraudulent. If your credit score suffers as a result of your testimony, you may find it difficult to get fresh loans and funding.
As a result, many small businesses operate on razor-thin margins and simply cannot afford the challenges caused by business identity theft, which is perhaps the most serious threat of all. Most small businesses collapse within six months of being hacked, and there are already so many mistakes that firms may make that will lead to failure.
Additional Tips for Avoiding Business Identity Theft
The Uniform Commercial Code applies to business and commercial bank accounts (UCC). Businesses have shorter reporting timeframes, fewer safeguards, and a larger responsibility for fraud under the UCC than consumers do.
Keep a record of all accounts and important contact information.
Make a list of your company’s accounts, including the creditor / financial institution, account number(s), card number(s) (including all staff cards), and essential contact information for the billing and fraud departments.
As much as possible, do not use your personal credit cards or bank accounts for business purposes. Financial institutions and card issuers remove business-related transactions done with personal cards from their “zero fraud liability” schemes, in addition to concerns of company separation, accounting, and correct tax reporting.
Because of known security flaws in a domain, anybody who owns it can get access to the domain’s applications, such as email accounts and passwords, as well as other online credentials, such as social networking accounts and calendars.
If your organization owns a domain name that is set to expire and will not be renewed, and you have used the domain for emails, calendaring, or other online services such as Google Apps, make sure you delete any information from these apps before the domain expires.