Identity theft affects more than 12 million people in the United States each year, and that number continues to climb at an unsettling rate.
Identity theft happens when someone’s personal information is illegally accessed or stolen, typically for the purpose of committing fraud. But the targets aren’t exclusively individuals. Criminals are also targeting businesses. It is estimated that financial fraud that results from identity theft costs American businesses upwards of $56 billion yearly.
With business identity theft, criminals hijack a company’s identity using confidential company information such as its employer identification number (EIN) or federal tax identification number and exploit that information to obtain lines of credit with banks or vendors using the company’s name. The identity thieves then use the credit to purchase consumer electronics, household materials, gift cards, and other valuable items that they eventually flip for cash.
When the theft is uncovered, it’s often too late for many victims with the damage already inflicted. Consequences can include direct financial losses, ruined credit ratings and hundreds of lost hours dealing with the problem, among others.
So what can you do to keep your business from becoming a statistic? Start with these steps:
Develop and implement a security plan – With limited resources and tight budgets, it’s easy to see why many business owners prioritize developing business plans over creating a security plan. As a result, many businesses become vulnerable. Make sure that you have a security plan in place to protect your confidential business information. Having a contingency plan ready in case of a breach will also help to contain the damage and limit losses.
Keep a close eye on your company’s credit and activity reports – A good way to detect potential identity theft is by monitoring your business’s credit report. Subscribe to a credit monitoring service if possible and take advantage of online billing when available. Some states offer an email notification service to business owners that alert them of any activity involving their business. By constantly auditing and reconciling your accounts, you will be able to promptly spot and report any unusual activity on your accounts before anyone can do substantial damage to your business.
Safeguard your company’s sensitive documents and information – Limit the number of ways ID thieves can access your company’s confidential information by keeping all of your documents and records in a secure location and by properly disposing of all information you no longer require. That means shredding all printed information and destroying or securely wiping all storage devices like hard drives and discs before disposal. Also, avoid sharing your company’s federal tax identification number, employer identification number, bank statements and other sensitive information with anyone unless absolutely necessary and always verify requests for such information. The same is true when transacting with third parties such as banks and vendors online. If you have to fill out a form on the web, only do so via encrypted connection, which is indicated by a padlock icon and “https” in the website’s URL.
Implement safe data practices – Identity thieves steal your data in many ways. Some do it the old fashioned way by going through your company’s trash or intercepting your mail, while others use more advanced methods like hacking and phishing. By following safe data practices such as proper information storage and disposal, and keeping your network and workstations protected and updated, you make your company much more difficult to target.
You have made considerable investments in terms of time, money and resources to growing your business. Don’t let it all go to waste. Make sure that you put in the same amount of effort and resources in keeping your company secure from identity theft and against a host of other threats.
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