Business identity theft has recently emerged as a major threat to small businesses. Learn how to protect yourself and what to do if the worst happens.
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by Rick Downer
Marketing professional with broad expertise and experience as a strategist, writer, editor, journalist, content produ...
Updated on: November 8, 2023 · 3 min read
While personal identity theft grabs headlines, corporate or business identity theft is an increasingly common crime that can wreak havoc on your livelihood. Thieves often steal a business' federal tax ID, Employer Identification Number (EIN), and use that information to open lines of credit, file fraudulent tax returns, and worse.
Statistics vary by source, but they all point to a rising trend in incidents of business identity theft. And small businesses are particularly at risk since they often lack the cybersecurity resources of larger organizations. But when a business' information is stolen, it can be difficult to correct the record.
Similar to personal identity theft, criminals often pose as business owners, officers, or employees to steal cash, take out credit, and apply for loans, leaving the business with the debts. Perpetrators tend to cash out quickly and disappear, often going unnoticed until bills and collection letters arrive.
When the schemes are discovered, victim businesses must devote extensive time and resources to repairing the harm done to their finances, credit profiles, and reputations.
Identifying ongoing business identity fraud can be challenging, primarily because of the multiple strategies criminals employ. But knowing some of the schemes can give you a head start. Criminals will often:
The best rule of thumb to protect yourself is to be aware of your vulnerability, stay vigilant, and take nothing you spot for granted.
The best defense to preventing business identity theft is to have a strong offense. To thwart would-be thieves, consider:
You should also plan to spend time learning all you can about the current state of business identity theft activity. The National Association of Secretaries of State maintains a comprehensive business identity theft website, businessidtheft.org, that you should keep on hand for easy reference.
If you find yourself in the unfortunate situation of being a victim of business identity theft, speed is your best defense. Take action to:
In the end, being proactive may be the key to preventing criminal enterprises and their attacks on your business. Consider investing in business identity theft protection and stay one step ahead of the crooks.
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