Business Identity Theft Part I: How It Happens

Think businesses are safe from identity thieves?  Think again.

Did you know that businesses are just as susceptible to identity theft as individuals? Businesses have a lot at stake when it comes to securing themselves – proprietary information, branding, patents, trade secrets, bank records, and more. How can business identity theft happen and what can you do to protect your business entity?

EINs are the Social Security Number of Your Business

Never provide an employer identification number (EIN), social security number, financial information, or personal information to anyone unless you have initiated the contact and have confirmed the requesting business or the person’s identity. Unfortunately, EIN’s are not protected in the same manner as social security numbers, and finding an EIN is relatively easy for a business identity thief.  Stolen EIN’s are used for fraudulent tax refunds and are very common, as most business owners are unsuspecting of the danger.

Closed Businesses Can Be a Goldmine for Thieves

Did you know that most states allow a company to be reinstated for a period up to two years? That means an identity thief has a decent window to use your business for fraudulent gain. If you’ve recently dissolved your business, make sure that all credit accounts and bank accounts are reviewed on a monthly basis. Have secure storage for sensitive documents. Check the registration, filings, and credit reports for the period of time that your state allows businesses to be reinstated.

Your Trash is a Thief’s Treasure

Going through a business’ trash and recycling bins for account numbers and other sensitive data is a great way for thieves to steal your business identity. Make sure that all sensitive documents are stored properly and securely, and when it’s time to clean them out, shred them.

Steps to Take to Secure Your Business

Protect your sensitive business information as carefully as your sensitive personal information. Here’s how you can protect your business identity:

• Secure paper documents in locked cabinets and electronic records in password protected files.
• Establish business data security policies and limiting employee access to sensitive business and client information and assets.
• If you must provide sensitive business information over a website or via email, ensure the transmission is secure.
• Shred sensitive business records and financial statements before discarding them.

Something as simple as having a plan and keeping a close eye on your business credit profiles will help immensely. But why does business identity theft happen at all? Stay tuned for our next post on why thieves are after businesses big and small.

Related Articles:

• Identity Theft Statistics – ID Theft Hits All-time High in 2016
• To Shred or Not to Shred? Don’t Let Employees Decide
• Can Your Identity Be Stolen From the Trash?

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