Most of us are well aware of the risk of personal identity theft, but what about business identity theft? There is no doubt that criminals have found identity theft to be very lucrative, especially when compared to the low risk involved. As a result, identity crimes have evolved far beyond petty crimes involving lost credit cards and stolen identities of individuals. In fact, identity theft has become the #1 for profit crime in the United States, and costs businesses around the world roughly US$221 billion annually! Unfortunately, criminals have now set their sights on unsuspecting businesses of all sizes as easy targets for identity theft. The potential rewards for business identity theft are often far greater than for individuals, so make sure you’re aware of the risks and take steps to protect your business!
What is Business Identity Theft?
The media often mischaracterizes business identity theft, causing business owners to be unaware of the true nature of the crime and inadequately protected. Business identity theft is not merely an information security breach, nor the loss or theft of consumer information possessed by a business. Rather, it involves a person or other entity impersonating the actual business itself. Generally, illicit gains are made by engaging in fraudulent activities aimed at creditors, suppliers, business owners, consumers, and even the government. It is important to note that no business is immune to the threat of identity theft. Criminals target businesses of all sizes and structures, including sole traders, partnerships, trusts, non-profits, corporations, LLCs, and more!
Your Business – the New BIG Target
So why are businesses becoming such a popular target of identity theft? Well, it helps to think of things from the criminal’s perspective by comparing the potential illegal proceeds of personal identity theft to those of business identity theft:
· Businesses often maintain much larger bank account balances than individuals.
· It is usually easier to get credit and open new accounts for businesses.
· Businesses usually have higher credit limits.
· Automated fraud screening systems are less likely to detect unusual spending patterns when businesses make large purchases.
· Information needed to impersonate a business is often publicly available, so criminals don’t even need to steal much information.
· It is difficult to investigate and prosecute for these crimes, especially because they often cross jurisdictions.
Protecting your Business
It should be clear by now the reasons why it is vital for all business owners to take positive action to protect their business from identity theft. Once a criminal gets hold of sensitive information, they will often rack up massive charges very quickly – and by then, it’s often too late. This can put your customers’ financial records in jeopardy damage a business owner’s credit history, and cause a multitude of other problems. So, the best cure is always prevention! Here are 5 tips for keeping your business information safe and avoiding becoming the victim of business identity theft:
1.Minimise stored information
The more data you store, the easier it Is for criminals to access your data and engage in identity theft. Therefore, you should only store information if it is absolutely necessary. If you do need to store certain types of information, it can be effective to store corresponding information in different places. For example, keep your username stored in one place and the password in another place in a way that makes sense to you. This will make it more difficult for criminals to use your information.
2. Have a data destruction policy
Eliminate information that is no longer needed. For example, delete data from files that haven’t been used for a long time and aren’t needed. Also, if you replace computer equipment, it is advised that you destroy the old equipment so thieves can’t recover the information stored on the equipment.
3. Protect paper documents
Keep all sensitive information in a safe place, such as in a locked drawer. Only trusted employees should have access to such documents and deal with them responsibly. Once confidential documents are no longer needed, they should be shredded. This will protect the business from any thieves diving through recycling bins!
4. Have password protection for everything
For every software platform or website a business uses, it should require a password to log in. It is best to make complicated passwords and to use different passwords for different log ins, otherwise a criminal could access multiple accounts with ease.
5. Implement data encryption business-wide
Technologies are available to prevent business identity theft. By using a data encryption system, any information leaving your business can be kept secure. This technology uses an algorithm to convert normal text into indecipherable mumbo-jumbo (in layman’s terms) so it cannot be understood by unwanted parties.
Take Action Today!
Business identity theft is a serious problem which is rising in popularity due to the huge potential profits and the relatively small risks. Therefore, business owners must be proactive in their fight against these crimes. Implement the 5 tips above to minimise the risk to your business!
If you would like any further information regarding your business, please don’t hesitate to contact me.