You have likely heard of identity theft in the past and may even know someone who has been a victim of identity theft. Did you know that businesses may also fall victim to identity theft? Businesses have more money and the ability to acquire loans more easily than the average person, making them a higher value target for identity theft. With so much to lose, are you doing everything you can to protect your business from identity theft? Here is what you need to know about business identity theft and what you can do to avoid it.
What is business identity theft?
Business identity theft, also known as corporate or commercial identity theft involves the impersonation of a business or employee for criminal gain. Impersonation is the key component here. Business identity theft often happens on a much larger scale than consumer fraud or personal identity theft and can have large scale impacts, affecting employees and even customers. Business identity theft can happen to a business of any size or legal entity.
What Business Identity Theft is Not
When trying to understand what business identity theft is, it greatly helps if you understand what it is not. Business identity theft is not a security breach, or the loss of sensitive information held by the business, employee theft, or consumer theft. By understanding what business identity theft is not, we are better able to understand what it is and how to better protect the identity of your business.
Why does it happen?
Business identity theft happens for the same reason that consumer identity theft does, for the financial gain of the thief. Due to the large scale of a business’s operations, it makes businesses a preferred target for identity thieves. Because businesses deal with large transactions and higher credit limits, they are an appealing target for any identity thieves. The advent of the internet also makes it easier for a thief to steal the identity of a business. Much information about a business is available to anyone at any time with an internet connection.
Identity theft can be extremely destructive to your business, especially if it is a newer business. Business identity theft is going to cause you to lose money, but on top of that there are many other negative things that come with business identity theft. Some of these things include the late payments due to loss of income, negative credit reports, tax problems, business reputation, and personal liability for the owner of the business.
What to Keep in Mind About Business Identity Theft
Business identity theft is liable to happen to businesses of any size, although it is much more common among small business as they are the ones that likely have not invested in business security measures. Any small lapse in security could lead to a potentially disastrous situation, which is why as a business owner, security should be your top priority. Given all of the consequences associated with business identity theft, it is in your best interest to take proactive measures to protect your business’s identity.