flevyblog

Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.
MANAGEMENT & LEADERSHIP STRATEGY, MARKETING, SALES OPERATIONS & SUPPLY CHAIN ORGANIZATION & CHANGE IT/MIS Other

Understanding Business Identity Theft – Best Online Protection Tips

If you thought identity theft only hits individuals, think again. Thieves are targeting businesses like yours wreaking havoc to finances and threatening its very existence.

And numbers don’t lie. Data from the IRS shows that the number of business identity theft cases increased from a mere 350 in 2015 to a staggering 10,000 cases in 2017, causing losses amounting to $137 million.

With such statistics, it’s clear that identity theft is a threat to businesses. In this article, we’ll delve into the crux of business identity theft and explain the measures you can take to protect your business online.

What Is Business Identity Theft?

Business identity theft is a form of identity fraud that involves the illegal impersonation of business for criminal gain. Business identity theft can take any of these forms.

  • Financial fraud
  • Tax fraud
  • Trademark ransom
  • Website defacement

Each of these frauds can have significant financial consequences and can cause damages to a company’s reputation and relationship with key stakeholders. For example, fraudsters can use your business info to open new credit cards or make payments to other criminals.

Why Are Identity Thieves Targeting Businesses?

Identity thieves are shifting their focus from individual consumers to businesses. One of the reasons for the change of taste is that businesses have far larger accounts and better credits than individual consumers so the reward is larger.

The other reason is that it’s easier to steal a business identity than an individual’s identity. Important business information such as tax IDs, addresses, and license numbers are readily available online, so it’s easier for fraudsters to access this information.

Last but not the least, unlike businesses, most individuals have registered their accounts in leading credit monitoring services, so their accounts are always monitored for any fraudulent activities. For more info on this, check out this article on how to protect your identity.

How Can You Protect Your Business Online?

Here are a few tips that will help to keep your business safe from identity thieves.

1. Follow Digital Security Best Practices

Today’s identity thieves are tech-savvy and will quickly identify flaws in your systems that can be exploited to gain access to your sensitive information. To be on the safe side, follow these digital security best practices.

  • Secure wireless networks
  • Set up a firewall
  • Install antivirus and antimalware programs on all company computers
  • Encourage use of VPN for outside access
  • Use encryption on all computers

Additionally, make sure to educate your employees on the importance of data security and the various avenues fraudsters can use to access sensitive company data.

2. Monitor & Reconcile Your Business Accounts Daily

Frequent account monitoring and abrupt reporting of suspicious activities can help to protect your business from identity theft.

While online banking is not without risks, it has the advantage in that it allows you to quickly log in to your bank account and view transactions at any time. Through online banking, you can also eliminate paper statements and reduce the risk of exposing your business-sensitive info to identity thieves.

3. Establish Good Internal Controls

Any business with employees needs to pay extra attention to security. That said, you should have controls in place that will ensure sensitive information is well protected. Such controls should aim at the use of passwords and access to customer files.

Also, ensure clear protocols are in place that will guide your employees on what to do in the event of a security breach.

About Shane Avron

Shane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.


Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]   This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]
We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]   We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function

  

  

  

  

  


The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most articles have been contributed for management consultants and industry executives with over 20 years of experience. If you would like to contribute an article, please email our editor David Tang at [email protected].

Flevy (https://flevy.com) is the marketplace for premium business documents, such as management frameworks, presentation templates, and financial models. Our documents are of the same caliber produced by top tier consulting firms, like McKinsey, Bain, Accenture, BCG, and Deloitte. Learn more about Flevy here.


Connect with Flevy:

   
  


About Flevy.com   /   Terms   /   Privacy Policy
© 2020. Flevy LLC. All Rights Reserved.