While many people know that personal identity theft is an issue, they may not know that business identity theft also results in millions of dollars lost every year. Also known as corporate or commercial identity theft, this type of crime is when a criminal corrupts the identity of companies and uses it to establish lines of credit through banks or retail companies. Much like personal identity theft, these lines of credit are used to purchase various types of goods to sell or exchange at a later date.
Why are businesses targeted?
Businesses have larger bank account balances when compared to individuals, meaning the payoff for criminals is much higher. Additionally, businesses are able to get lines of credit much easier than an average consumer. Plus, business lines of credits often have much higher limits. It can be difficult for an individual to get a card limit greater than $5,000, but a business can get a line of credit as high as $100,000 or more.
How do businesses avoid identity theft?
Some of the methods of preventing business identity theft are similar to preventing personal identity theft. Use software that is up to date and encrypts any information that is important. Furthermore, never provide anyone unofficial an employer identification number, social security number, financial information, or personal information. If someone requests any of these things, be sure to investigate the legitimacy of their claim.
Another way to avoid business identity theft is to monitor and reconcile your business accounts daily. The first sign of theft is when a company sees fraudulent charges on its account. Should you find a charge that hasn’t been authorized, contact your bank immediately.
Finally, you should also be wary of phishing scams. Businesses receive phishing scams just as individuals do. This type of scam is when you receive an email requesting certain pieces of information, usually to “verify” what is already known. Notify your employees that if any such email is received, to notify you directly and never to respond to these emails.
What do you do if your business has been affected?
The first thing you need to do is minimize the damage. Protect your accounts by notifying your bank's fraud department immediately and freezing any accounts that have been affected. Do not apply for any new accounts until the situation has been resolved. You can find a full list of information on what to do if your business has been compromised at Business ID Theft.
