How to Prevent and Protect Yourself from Business Identity Theft

Have you been the victim of identity theft or do you know someone who has? The risk of personal identity theft is so great these days, but did you know that your business identity could be stolen, too?

Business identity theft is a growing problem, but unfortunately, most business owners are unlikely to discover that their identities have been stolen until a lot of damage has already been done.

Business Identity Theft Poses Significant Risk

Stealing a business identity is easier than you might think. For example, thieves could access your business bank account information and then make purchases or withdraw money from your account. Identity theft criminals are smart. They know how to use your money a little bit at a time so you’re less likely to notice and they’re less likely to get caught.

Identity thieves don’t always take money from your existing business bank account or credit card account. Sometimes, they use your information to open completely new accounts. It’s not until you have a problem getting new credit or you receive a communication from the financial company that manages the fake account that you discover your business identity has been stolen. Imagine how much damage will have been done by then!

Preventing Business Identity Theft

Identity thieves typically get private business information in two ways: through paper hard copies or through digital data. You must be vigilant about protecting both your paper and electronic business records and information. Make sure your office and technology are set up appropriately to minimize the possibilities of identity theft. Here are some ways to do it:

  • Paper: Shred all paper that has any personal, private, or sensitive information on it. You can either purchase a shredder or hire a reliable shredding service to do this.
  • Digital: Purchase software to secure your computers and mobile devices, and hire an information technology professional (either as an employee or consultant) to help you set up a safe digital office and storage system.

Detecting Business Identity Theft

Of course, the first thing you need to do is try to prevent identity theft from happening to your business by following the tips above, but don’t stop there. You should also make sure you have a solid detection process in place that will enable you to detect identity theft very early. Here are some ways to do it:

  • Credit Report: Check your credit profile with Dun & Bradstreet and the three main credit bureaus (Experian, Equifax, and TransUnion) regularly. Look for any unauthorized activity.
  • Accounting: Make sure your business records and accounting are up to date, particularly your accounts payable.
  • State: Regularly contact your state office that registers businesses (usually the secretary of state) to verify that the information the office has on file for your business is accurate. Identity thieves often make changes to business registration information so they can pose as an authorized representative of the company in the future. This way, they can steal from the business’ bank accounts and credit lines or open new accounts and credit lines.

Protecting Your Business from Identity Theft

Protecting your business from identity theft is absolutely essential. The risks are simply too great to ignore!