How to Prevent and Detect Business Identity Theft
by BusinessCredit, Guest Blogger
- Created: April 23, 2012, 9:00 am
- Updated: January 9, 2013, 9:19 am
Identity theft is a crime that impacts the lives of more than 10 million consumers every year-and the numbers are increasing. It’s hard to imagine that one out of every 20 consumers is at risk of being a victim this year alone.
The cost of identity theft among consumers costs businesses worldwide an estimated $221 billion a year, according to the Aberdeen Group.
However, consumers are no longer the only ones being targeted by these criminals. Now business owners have a new kind of threat to be concerned about that can cause a whirlwind of devastation to a victim’s business.
Business identity theft is the newest threat to small businesses all across America. In the case of a business, a criminal will seize a company’s identity and use it to acquire credit in the company’s name.
Once they successfully obtain these credit accounts, the criminals will go on a spending spree buying electronics, office equipment, gift cards, and any other items that can be purchased and sold for cash.
The damage inflicted can cripple a business, prevent it from acquiring any credit, and even threaten its very operation while a victim is trying to clean up and recover from it.
The following five strategies can help you prevent and detect business identify theft:
- Develop a protection plan – While most businesses focus on developing business plans to grow their company, little attention is paid to developing a protection plan. Design a step-by-step plan to protect your company’s identity at the same time putting in place an action plan in the event that you do become a victim.
- Protect company documents – Keep all your company documents and records in a safe and secure location. Dispose of any unnecessary information by using a micro cut shredder for the highest level of security. Also, never provide your company’s federal tax identification number, financials, or bank statements to anyone unless you have made the initial contact. Finally, consider using a prepaid business credit card for employees as opposed to a traditional business credit card. With these cards you can set limits, deactivate a card in real time, and even limit the merchants for which the card can be used. If a criminal happens to steal a company card from an employee, you can quickly take action.
- Protect company information online – One of the surefire ways to put your company at risk is by using sensitive information such as an employer identification number (EIN), account numbers, financial documents, or personal information via email or the web. If you must provide this information for a specific reason such as applying for credit, make sure the site is secure and its security certificate is up to date.
- Monitor business credit reports – One of the fastest ways to detect a possible identity theft is to monitor your company’s profiles with all three major business credit bureaus. You can accomplish this by subscribing to their monitoring services which give you access to your files 24/7. Take advantage of email alert notifications so you can be notified of any new activity occurring on your company credit files in real time.
- Avoid the “master” user – You should avoid creating any type of “master” user account and password where an employee or individual can gain access to all your company information.
Taking the following precautions can dramatically improve your chances of avoiding business identify theft. If you believe your business is a victim of identity theft, contact your local law enforcement agency, the business credit bureaus, as well as your company’s credit and bank providers to report the theft.
As a business owner, you should always remain vigilant in protecting your company’s identity. You’ve worked hard to build your business to where it is today and you should work equally as hard in protecting it.
About the author
Marco Carbajo is CEO of the Business Credit Insiders Circle (http://www.businesscreditblogger.com), a step-by-step business credit building system providing credit recovery, lines of credit, business credit cards, trade credit, and funding sources.
About the Author
Marco Carbajo is CEO of the Business Credit Insiders Circle (www.businesscreditblogger.com), a step-by-step business credit building system providing lines of credit, trade credit and funding sources.
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