Identity theft is a constant concern for consumers, identity thieves are always lurking looking for new means for stealing data that can issue them a lucrative return at your expense. Consumers are not the only entity being threatened, we don’t often hear about the bulls-eye target on businesses that puts them at risk of business identity theft.
What is business identity theft?
When a criminal takes the necessary steps to impersonate a business and steal assets for personal gain. Commercial ID theft does not discriminate, businesses of all industries and sizes are threatened by fraudulent activity.
According to the SBA about 15 to 30% of all commercial credit losses are due to fraudulent activity.
Criminals often see a company as an easier and more lucrative victim than consumers:
- It’s easier to open many commercial accounts since some offer a credit limit without requesting any sensitive information. For instance, some vendors may offer new customers a small courtesy line of credit, a thief can easily open these accounts and rack up a bill in the company’s name.
- Many commercial bank accounts maintain much higher balances than personal checking accounts – making these accounts seem like a pot of gold compared to consumer accounts.
- Companies are often given larger lines of credit than consumers, since lines are often opened more easily and offer a larger line they are ideal in the eyes of a criminal.
All these factors considered, thieves may conclude that stealing a company’s identity is more worth the risk than consumers.
How a business can protect their identity:
Commercial identity theft is less publicized and business owners don’t always know to have their guard up. If a company fails to plan for a data breach or fraudulent activity they are leaving their business and assets vulnerable.
To protect your business from identity theft you should take the following steps:
- Monitor your business bank accounts daily: Take advantage of today’s mobility and utilize the online and mobile sites that all major banks now offer. This will allow you to constantly monitor each account.
- Monitor & Review your business credit reports: If a new line of credit, account, or even loan is opened in your company name it will probably show up on at least one business credit report – especially if the account has gone delinquent. Now, this is not always the case which is why it’s so important to use more than one method for protecting and monitoring your information, business credit is reported differently than personal and not all vendors / creditors will report account information. By monitoring your business credit daily, or having a professional business credit expert assigned to the task, you can save a lot of time by finding out sooner that fraud has occurred. Remember it is always best to have more than one form of alerts when it comes to Fraud to make sure that you are informed of a security breach.
- Monitor your business credit card accounts: Most major credit card companies offer very good fraud detection, but accounts should be monitored daily to make sure no unauthorized users have gotten ahold of your card information. Consider having transaction notifications sent to your email.
- Protect documents that contain sensitive data: This applies to on computers and off. Keep information that could be used to defraud your company in a safe and locked location.
- Consider information security when using the internet: Make sure you’re only shopping on secure websites (https) and that you have a firewall / network security set up that protects your computers from hacking.
- Create individual user accounts for employees: Companies should also take the necessary moves to protect their business from internal threats – they can do this by creating limited employee accounts on company computers and keeping financial, identity and tax information secure.
- Hire trustworthy employees: Unfortunately, internal threats are a common issue in business, especially with employees who handle sensitive data. For instance, a bookkeeper or business partner could be a potential threat to your company’s identity.
- Speak to vendors about how they handle data: If you provide your vendors with sensitive information, make sure they have procedures in place that protect your data.
Companies should also take the necessary moves to protect their business from internal and external threats – they can do this by keeping financial, identity and tax information secure.
Setting up credit alerts
If you’re concerned about fraudulent activity, reach out to a business credit expert today to learn more about business fraud protection and monitoring business credit.