I have heard a lot about individual identity theft, but is business identity theft really that big of an issue?
Absolutely and it is getting worse. Identity theft is a crime that is on the rise and that affects over 9 million people and costs over $56 billion to the economy every year, according to the Better Business Bureau. Business identity theft impacts many companies around the country and the world and can severely impact the business’s reputation, cash flow and overall enterprise value. Individual consumers are no longer the only targets of identity thieves and such thieves are becoming increasingly more sophisticated with the use of technology and well funded global cartels.
Business identity theft is one of the newest developments in the criminal world. In the case of a business, a criminal will steal a business’s identity and use that identity for a variety of criminal acts, including acts on a wide continuum from sending out false invoices using your company’s logo or letterhead to establishing temporary office space and/or merchant accounts in a company’s name, ordering merchandise or services with stolen credit card information, establishing lines of credit with banks or retailers and using these accounts to further fund their criminal enterprise.
As you may expect, the damage caused by such criminal activity can be devastating to the business. The cost to clean up and correct the damage can be hundreds of thousands of dollars as well as a significant impact to a business’s reputation and overall operational issues.
What can be taken? As with any crime prevention program, no method or system is 100% guaranteed, but there are steps that a business owner can take to head off potentially devastating effects of such activity.
- Create and design a security plan that makes sense for your specific business. Not all systems fit all businesses.
- Take immediate steps to investigate and report suspicious account activity. Ensure your business has adequate fraud alert systems and backup.
- Work only with reputable business partners to ensure they take their security system as serious as you do.
- Make sure your entire company has security policies and procedures that all employees can understand and have access to should they have any questions.
- Maintain only those records and documents the company must have to run the business and keep all records in a secure location.
- Once the security system is in place, be vigilant to keep the system up to date and review the systems on a regular basis.
- Lastly, work closely with law enforcement agencies to keep up to date on best practices. Report matters that arise to law enforcement.
For more information about establishing a security measures for your business, contact Lommen Abdo Attorney Dan Young, at email@example.com or 612-336-9343.
Other resources include: