Business identity theft is one of those things that you’re never fully prepared for. It can strike at any time and without any warning, and it’s always inconvenient and time-consuming to solve the multitude of problems it can lead to. Identity theft is something all business owners need to understand and know how to mitigate. After all, any organization, no matter its size or industry, is a potential target.
What is business identity theft?
Firstly, let’s start by understanding what business identity theft isn’t. Identity theft is not the same thing as an information security breach, and it generally doesn’t have anything to do with staff or customers directly. Rather, business identity theft is akin to personal identity theft, in which someone illegally impersonates someone. In this case, we’re looking at cases where people masquerade as a representative of a particular business.
Why does it happen?
Business identity theft is almost invariably carried out for financial gain. However, since businesses operate at a much larger scale than individuals, the stakes are far higher, and they make much more attractive targets to social engineering scammers. Thanks to their higher credit limits, large bank accounts, and the value of their digital data, businesses are proverbial treasure troves for identity thieves.
By impersonating a representative of a legitimate business, an identity thief may, for example, carry out a spear-phishing attack. These social engineering scams are the most dangerous, since they target specific individuals and are conducted based on extensive research into the would-be victim. Thanks to today’s era of hyperconnectivity, there are now more opportunities than ever for identity thieves to build an intimate profile of the business they’re impersonating.
What are the consequences?
Business identity theft costs the American economy billions of dollars every year. There are many risks and consequences, with the most obvious being loss of income. Other problems include state and federal tax disputes, fake invoices, and damage to business reputation. Personal liability is also a problem, since any criminal breach of information security could put the business at risk of litigation. In the end, victims are often held accountable for any losses, including those incurred by their customers, employees, and stakeholders, especially if it’s found that a breach of regulatory compliance was also a factor.
How to protect yourself
Identity thieves prey on companies of all types and sizes, with the risks being greater for small and medium businesses, especially those which are relatively new. Such organizations often present themselves as easy targets, since they tend to lack the sophisticated security systems and infrastructure of established corporations. That’s why many businesses outsource a layer of security to a managed services provider and obtain round-the-clock support to fill the gaps on demand.
To protect against business identity theft, leaders must educate their teams on the suspicious signs to look out for. These include things like invoices for services or goods never ordered or received, unrecognized payment card processing fees, unauthorized wire transfers, and fees for services that no one ever ordered.
How to recover from business identity theft
If your organization has fallen victim to identity theft, the first thing you need to do is collect as much information as you can. You’ll also need to initiate takedown procedures for any online accounts being used for carrying out scams against your business and its customers. If, for example, you find a website masquerading as one belonging to your business, you will need to report it to the domain registrar for illegal activity.
For fake social media profiles and other public-facing online accounts, the platform will usually provide built-in reporting features for you to flag illegal activity. You’ll also need to alert the credit bureaus to place a fraud alert if you suspect you’ve become a victim of identity theft.
Tech Squared offers more than just technical support. We provide the services and solutions today’s businesses need to reduce stress and add value. Give us a call today to find out how.