How to help protect your business from identity theft

David Pollino
Posted by David Pollino

One of the newer security threats to your business is business identity theft. This occurs when criminals pose as business owners, officers, or employees to illegally get cash or credit.

200248714-001Thieves can steal a business’ identity by gaining access to bank accounts and credit cards or by stealing sensitive information such as the business’ Tax Identification Number, Employer Identification Number or the business owner’s Social Security Number.

Criminals — such as current or former business employees — may use the stolen information to establish lines of credit with banks or retailers to purchase goods and services such as commercial electronics, home improvement materials, gift cards, and other items. Or they could set up a bank deposit account in the name of the business and steal receivables checks, then delete invoices to cover up the fraud.

Here are several ways to help protect your business against identity theft:

  • Regularly check your business bills, business bank accounts, credit cards, and accounts receivable and accounts payable and be alert for suspicious or unauthorized transactions or charges. Utilize a purchase order system that requires a valid purchase order for expenditures.
  • Monitor your business profile with major credit bureaus such as Dun & Bradstreet, Equifax, Experian, and TransUnion for irregularities.
  • Establish security policies and share sensitive business and client information only on a need-to-know basis with authorized employees, vendors and advisors, such as bookkeepers.
  • Use locked cabinets and password-protect computers, electronic files and devices such as mobile phones, tablets, flash drives.
  • Shred or securely dispose of paper, electronic records and electronic devices such as mobile phones, tablets and printers that contain confidential or sensitive information.
  • Install cameras in areas where financial transactions, including cash transactions and check processing, are conducted.
  • Separate key duties and responsibilities such as payables and receivables activities by assigning them to different employees. Assign a second person, such as a supervisor, to regularly review such activities.
  • Protect your receivables by utilizing a U.S. Post Office box with limited access or a lock box service. Limit the ability of receivables staff to modify or delete invoices.
  • Perform background checks prior to hiring employees and advisors such as bookkeepers, accountants, and technology providers.
  • Find out if your insurance policy covers fraud. Many business policies do not cover employee dishonesty.

Security threats to your business can take many forms. Business identity theft is just one of those forms, but if you take a few preventive steps you can reduce the risk of fraud and financial loss to your business.

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