Identity theft affects all of us in one way or another, so we wanted to give you a few ideas on this topic. We put together four reasons why you need to protect your organization from this evolving crime. Let’s start with a few basics.
Reason #1: Identity Theft Defined.
Governments generally define consumer identity theft as an event in which one person uses the personal information of another person without his or her permission in order to defraud or to obtain loans, services, or credit based on the stolen identity.
Corporate or business identity theft is a new wrinkle in the crime of identity theft. It occurs when a criminal steals a business’ identity and uses it to contact banks and other businesses to create lines of credit. So identity theft is no longer limited to consumer crime. Business identity theft is much more lucrative for criminals due to the significant amount of the dollars the criminals steal.
- Impersonation of the business. Business identity theft occurs when a criminal uses the business’ identity by stealing business identification codes or other credentials. Criminals make up false business records or create false business filings to defraud investors, business owners/officers, banks and other financial institutions, suppliers, consumers, and government agencies.
- Note: This type of theft is not a security breach related to consumer information. This is not the theft of consumer identification or sensitive consumer financial information held in the care of your business.
Reason #2: Identity theft is a growth industry.
In this cyber crime age, identity theft against businesses is much more lucrative than consumer identity theft. Banks and other merchants want to open accounts for businesses because businesses spend more money than consumers. The ease with which criminals can establish business accounts plus the amount of money generally kept in an enterprise business’ account make this a very lucrative activity for criminals. In addition, businesses enjoy more latitude with respect to payment terms, higher credit limits (it’s not unusual to have $25,000 to $100,000 or more), and can make larger purchases through the stolen identity with far less critical inspection than consumers.
Reason #3: Cyber criminals can target any size business.
Corporate identity theft is the popular term for this kind of identity theft but that term muddles the issue. Corporations aren’t the only businesses that can have their identity stolen. Criminals can target any size and any type of business: from sole proprietors to partnerships, from non-profits to municipalities, and even school districts just to name a few.
Large corporations typically have large IT departments and trained security staff who can catch early warning signs of business identity theft — if they stay alert. Small businesses often do not have the luxury of a large IT staff. In either case, it’s important to keep IT staff aware that they must not leave network security updates undone in the crush of conducting every day business activities. Security patches for operating systems and software are on the first lines of defense.
Reason #4: Business information available to public.
Often a government’s system to promote the public’s access to business information means that business’ readily make public many of their organization’s personal identifiers in reports available for free to the public. Unfortunately, many identity scams only need the business’ name, identification number, and address to open new accounts so criminals can start stealing.
In addition, there is a growing internet black market that deals every day in the sale of business identity information derived from hackers and other cyber criminals.
Protect Your Business. There are things you can do to protect your business against identity theft. Take smart steps to take stock of your risk for identity theft:
- Secure your network and all mobile devices, including staff personal devices.
- Keep a file of your business’ ID information offline.
- Set up monitoring for all business accounts for unusual activity (such as credit line increases the business office did not request or new accounts that the business office did not open.)
- Identify quickly any unauthorized changes in your business’ identification information that you did not make (such as changes of address or contact person).
- Take action immediately if something looks suspect.
- Use security freezes and monitor all fraud alerts.
- Review business insurance contracts to confirm whether identity theft is a covered event.
Even if you do all these things, it is possible your organization still will suffer from identity theft; however, your best protection is preventive measures like those above to forestall cyber criminals. Insurance for identity theft will help allay the loss.
If you would to like to discuss your options for business insurance please call us at 561-732-9305 our quoting hours are Monday through Friday from 8:30 AM to 5:30 PM. In addition, you can request a quote online. Please remember, We Handle All the Work, While You Save!
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Rob Macoviak is the President of Oyer, Macoviak and Associates. Oyer, Macoviak and Associates is the oldest independent insurance agency in Boynton Beach and has been in business since 1953.