While personal identity theft is widely recognized and has a long history, business identity theft can also be very costly to victims, and the threat should be taken seriously.
Business identity theft happens when thieves pose as representatives of the business to gain access to cash, credit, or loans. Thieves get this access by stealing bank account, credit card, or business information. These thefts often go unnoticed until significant damage is already done, which can take a lot of time to repair.
Some ways that thieves might get the information they're looking for include:
There are multiple things that thieves might do with the information they obtain such as opening bank accounts, credit cards, or loans in the business's name, obtaining temporary office space, and ordering merchandise or services. To prevent such identity theft, you can protect your business information, raise awareness within your organization, and monitor your business's credit.
Monitor Your Credit
It is important for small businesses to track their credit information because 60 percent of business that are victims of identity theft will close within one year, and to understand the differences between consumer and business credit reports:
It’s important to monitor your business credit report for information that doesn’t look right, such as accounts that you don’t recognize. These may include high balances or a period of missed payments that can affect your company’s legitimate credit history.
In addition to the major consumer credit bureaus, there are other agencies that report only on business credit, such as Dun & Bradstreet. Business credit reports are not provided for free, but like consumer credit reports, each agency provides a potentially different report.
To get started, you can purchase reports or monitoring services directly from reporting agencies, or from the companies offer small business credit monitoring services. With the risks of identity fraud increasing, it is important that you use every means available to protect your business.
If You Find Fraud
If you discover unauthorized activity on your business credit report, it’s critical to notify the card issuer or lender, rating agencies and law enforcement immediately. Being able to demonstrate an active effort to resolve the situation, and working with police, will help as you explain to lenders that you’ve been victimized, and will help prevent you from being held responsible for the unauthorized purchases.