Imagine discovering you are the co-owner of your business instead of the sole owner, or that you have a satellite business you didn’t know about operating in a different state, or there is a business with a similar name using a similar address to yours pretending to be your business. How would any one of these scenarios impact your business? This is what business identity theft looks like. It can happen to any business large or small. It could happen to yours, too.
Most small to mid-sized businesses don’t understand what identity theft can do to their business until it is too late.
Business identity theft doesn’t target individuals, instead, criminals look for ways they can take valuable information fro legitimate businesses. They are looking for bank accounts, credit card numbers and passwords, and sensitive intellectual information.
These looters gain access to key accounts and drain them, many times, before the bank is aware of the act. The cost of business identity theft can be enormous. It could take hundreds of hours and a large sum of money to repair the damage. Some businesses never recover and go out of business.
Business identity theft is still a relatively new type of crime. Most business owners haven’t heard of it. So there is a temptation to ignore it. Steve Cox of the Better Business Bureau says, “Business identity theft is a very real concern in today’s marketplace. From a criminal’s perspective, it’s significantly more cost-effective to steal business identities than consumer identities.:
The criminals act quickly. They know they only have a short period of time before the act is discovered. The Ponemon Institute says that 84 percent of the cases money was stolen before the fraud was detected by the bank.
Many small business owners don’t think they have much that a thief can take from them. But the truth is that you don’t have to have more than a good name. The thieves can use it to get loans, order products and ruin the businesses good name. Dun and Bradstreet’s Senior Risk Analyst Robert Strezze states, “What is particularly disturbing about this trend is the significant dollar amount involved. It’s not unusual for the losses to be in the mid-six figures by the time the criminal activity has been detected.”
The unfortunate truth is that most businesses don’t take the time or steps to safeguard against the crime. Most are too busy doing the daily activities to keep the business going. It isn’t until the damage is done that a business realizes the trap it fell into.
What are the keys to business identity theft prevention?
There’s good news for businesses who are willing to put some time and effort into business identity theft prevention. Many times preventative measures can mean big savings and a better image in the community. There are three keys where a business can lessen the likelihood that identity theft will happen:
The first key is to establish a position on the leadership team that is in charge of monitoring for business identity theft, establishing procedures for data breach prevention, and protect against other criminal activity. This officer could be called the Chief Security Officer, for example, and should have the power to check banking, credit card and other key accounts. The officer would be wise to establish “best practices” for information security including employee training, password protection and more.
The second key is to set up monitoring services that watch your back for you. A businesses pers