It is a dog eat dog world out there, and every day, schemers are looking for new ways to prey on innocent people and steal their assets. Schemers are becoming smarter and smarter, which means you must be more vigilant and keep up to date with all of the potential ways you could have your identity stolen. As a business owner, you not only have to worry about protecting your personal assets, but your business assets and identity as well.
What is business or commercial identity theft?
Business or commercial identity theft occurs when a scammer or thief uses the name and details of an existing business to obtain credit, bill customers, or otherwise act as the business owner for fraudulent activities. This activity poses obvious dangers to businesses in the way of losing money and losing credibility with current or potential customers. An event of fraud could taint a brand reputation, even if the issue is resolved, that may result in the brands reputation being soiled forever.
This kind of fraud is not only dangerous for the business, but the customers as well. Well meaning customers may end up sending their money straight into the pockets of these fraudsters and may never see that money again.
How does business or commercial identity theft occur?
There are many ways that this kind of fraud may occur, but fraudsters often steal the social security number of a company’s officer or representative, or obtain the Tax Identification Number (TIN) of the company in question. Business identity thieves are often former employees of the business or even current employees or executives who have unfettered access to a company’s records, documentation and other sensitive information.
Unfortunately, business identity theft can go for years undetected. Because of the hidden nature of business and commercial identity theft, many businesses are unaware they are the victims of such activity until they notice that they have accumulated significant loss built up over years and years of identity thieves siphoning funds. A business may realize that it is too late when they are undergoing an audit as well.
How can you avoid being the victim of business or commercial identity theft?
In order to avoid becoming the victim of identity theft, it is important for a business to continuously and carefully monitor all financial accounts and billing cycles in order to detect any unusual activity. If unusual activity is suspected, it is important to freeze the account immediately and report the theft to the authorities.
It is also important to limit access that your employees have to sensitive information and monitor their activity and behaviour closely. Critical business information should only be accessed if absolutely necessary and under the observation of the business owner. Other strategies include having two employees oversee the books instead of one and hiring a private investigator (PI) in the event that you are suspicious of your employees. Because business and commercial identity theft is almost always an inside job, a PI can discreetly monitor your employee activity to alert you should there be an issue and guide you through the process of confronting the employee and bringing them to justice.