Business Identity Theft: A Significant Threat to Corporate
Business identity theft occurs when criminals steal or misuse information about their identities for personal gain. The criminal may steal the sensitive information of business owners, officers, or employees to do illicit funding or suspicious activities. Identity theft can target any type of business, including sole proprietorships, partnerships, LLCs, trusts, non-profits, and corporations. Businesses with lax privacy laws usually become the victim of identity theft. The criminals may obtain cash, credit, and loans and leave the victimized business with the debts. The cyberattacks directly affect the financing and reputation of the partner companies.
What is Business Identity Theft?
Business identity theft occurs when the fraudster gains access to the company’s vital information and then uses it illicitly. One of the significant crimes that criminals conduct using the business entails carrying out Illegal funding through credit cards and bank accounts of the respective firm. One of the risks is the possibility of loan issuing using the data of the victimized partner companies. Tax evasion can also be undertaken in the form of stealing a federal employer identification number.
Consequently, the victim company faces financial loss and fraud and is subjected to sanctions. In addition, the fraudster’s cyberattack abuses the copyrights, trademarks, patents, and other property gain of the company.
Types of Identity Theft
The essential types of identity theft are discussed below:
- Tax Identity Theft: A common type of illegal issue in which the business’s tax details are stolen to file a tax return and claim a refund.
- Physical Identity Theft: When the business address, beneficiary passport, or physical documents are illegally used by other companies, it is called physical identity theft.
- License Identity Theft: Beneficial owners’ information, especially their driving licenses, needs high-level security. Companies can steal this information to access services and open bank accounts.
- Bank Identity Theft: Business identity theft occurs when the account information is stolen for illegal activities.
- Account Takeover (ATO) Identity Theft: ATO refers to taking over the existing business account by changing information or stealing passwords.
Tactics of Business Identity Theft
These days, identity theft can occur in various ways, and thus, criminals are developing more intricate means of conning businesses. Although imitating a company’s letterhead or even sending fake correspondence, better practices are still being developed even to this day. Some of these include
- Phishing scams are real-looking and sounding emails, such as banks asking for additional details to be provided about the account, etc. The idea here is to get the account numbers, passwords, banking details, or addresses so that the scammer can steal their money or identity.
- Stealing into the executive’s email and forwarding emails that look like an emergency request for an immediate transfer to a foreign bank account
- Setting up an unsecured Wi-Fi hotspot with the intention of having it placed in or near an office with an employee is likely to get hooked into the network. This situation means that their system is open and exposed, and the data loss makes sense.
- Fraud is another reason why the improper dissolution of a business complicates the danger of identity theft. Criminals look for corporations that are no longer trading but are listed on government websites; they can be easily resurrected.
Measures for Business Identity Theft Protection
Business identity theft has become a serious problem for the market and greatly affects the loss of the victim company. If a business wants to save its credit score and reputation, there are the following steps that it must take.
- A company has to know how to avoid certain trends in identity theft protection for business, and its members must be informed about such possibilities.
- Keep an eye out on the business credit report from time to time.
- You have to subscribe to the digital notification system with the bank and other business partners.
- Some specific activities carried out while carrying out this function include studying the bank statements and reporting suspicious funding.
- All business data and documents must be protected. Keep data, such as EIN, account number, and any other sensitive information about the employers, safe.
- Use standards of cybersecurity and get cybersecurity insurance.
- The photographs or sensitive information should not be sent via email or any web-based service.
Track Business Identity Theft
The threats of business identity theft are emerging, and companies require the best solutions for this emerging threat. The fraudsters obtain the company’s details, and as such, they use them to access bank accounts, loans, and other credit facilities. Thus, the theft of the corporation’s records has to be controlled by developing specific rules within the company. Businesses must continue the policy of using end-to-end encryption for the company’s. This means that the best cybersecurity practices also assist in the prevention and even the monitoring of cyber-attacks. Moreover, it maintains healthy relations and reputation in the market when the business identity is intact.
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