Identity Theft: It's Not Just a Consumer Issue

Nearly everyone is aware of the threat of identity theft, thanks – or no thanks – to the frequent data breaches affecting retail stores, credit reporting companies, service providers and social networks. When news of a breach breaks, we typically think about our personal information first, but often business owners don't stop to consider their business identity can be stolen as well.

The impact of identity theft on a business can be devastating. For example, criminals will steal the business’ information and set up new lines of credit to purchase items that can easily be resold, such as computer equipment and electronics or gift cards which can act as quick cash. Fraudulent activity that goes unnoticed and unresolved can negatively affect a business’ credit rating, leading to significant issues in securing additional funding the business may need to operate down the road.

Many of the same tips we follow for preventing consumer identity theft can be applied to a business:

• Protect your account numbers and tax ID numbers the same way you would your Social Security. Do not share with unknown sources or send them via email.
• Keep checks and statements in a secure location, not easily accessed by people who do not need to use them.
• Report lost or stolen debit and credit cards immediately.
• Shred any materials that have private information that could be stolen (e.g. tax ID numbers, bank and credit card statements).
• Use your credit union or bank’s bill payment feature when possible instead of sending printed checks through the mail. This applies to payroll as well: Pay employees with direct deposit instead of checks. 
• Review your monthly bank and credit card statements thoroughly and immediately report suspicious items to your bank or credit union.

BANKING FOR ENTREPRENEURS

There are a few additional items business owners can practice to monitor and prevent identity theft. According to the Colorado Secretary of State, businesses registered with the state should also:  

• Assign a trusted person to be responsible for maintaining and monitoring your business record with the Colorado Secretary of State; periodically check your business details on the Secretary of State’s website yourself.
• Limit the number of people who have access to information and accounts and avoid creating “master” users who have complete access to all of the business’
  sensitive information.
• Sign up for e-mail notifications about changes to your business record.
• Sign up for Secure Business Filing, which provides optional password protection for your business record. By creating a Secure Business Filing account, you can control who is able to make changes to your record.
• Note your renewal/reporting dates in your business calendar and file on time.
• File any changes to your business in a timely fashion (e.g. address change, registered agent, name changes, etc.) to prevent anyone with former access to your information from conducting fraud.
• If changes have been made without your permission or knowledge, report the fraud to the Colorado Secretary of State immediately and correct your business record. See the “Checklist for Victims” for additional steps to protect your business.
• Dissolve your business on the Secretary of State’s website if you determine that you will no longer be doing business. However, do not unsubscribe from e-mail notifications so you can continue to monitor the business record for unauthorized activity.

As a business, it is as important to secure your customers’ information the same way you would protect your own. If your business is selling goods to customers, maintaining Payment Card Industry (PCI) compliance is a requirement. IT Business Edge also recommends companies select a payment provider that supports end-to-end encryption (E2EE) technology, and refrain from storing customers’ credit card information. Above all, if a data breach occurs and your customers’ information is compromised, dealing with the issue quickly and keeping open lines of communication will go a long way in maintaining goodwill with customers.

Corporate identity theft is certainly not inevitable. By following these recommendations, business owners can protect themselves and their customers from the costs, time and anguish associated with managing a stolen identity.

Candice Aragon is the vice president of marketing for Bellco Credit Union.