Small Business Reading Room

Tuesday, March 01, 2011

How To Protect Your Business From Corporate Identity Theft

Identity Theft - Is Your Company At Risk?

While most publicity regarding identity theft centers on crimes against individuals, corporate identity theft also can cause havoc within a company. A business is an even more appealing target for a criminal, due to the larger scope of financial transactions that occur routinely.

Most of corporate identity theft recently has been done through the Internet. Information is flowing globally, 24 hours a day. Because most people do not have criminal minds, they do not think of the ways the World Wide Web can be used to commit crimes, but rather see only the advantages that it truly offers. However, chilling scenarios involving corporate identity theft occur every day. For example, a business owner could start his or her day with the realization that some thieves have managed to change the names of a company's executives as recorded officially by government offices, and even the mailing address of the company as stated on the business website, then proceeded to order illegal payments to themselves from the company, or have goods fraudulently shipped to their own address.

Precautions That Should Be Taken

In order to let business flow normally without a constant fear of corporate identity theft, certain routine procedures should be put in place to achieve a sense that a company is being operated securely.
1. Officers should know about everywhere their company information appears online, and check frequently to ensure that everything is accurate.
2. If ever there is an incidence of corporate identity theft committed against the company, people should notify the police rather than trying to resolve the matter themselves. An insurance company will want to see the record of the police complaint.
3. Although people may have a tendency to become more secretive for fear of criminals, it actually is better to leave the company open to communications by publicizing the business email address so that customers and anyone who has contact with the company can notify it instantly of anything suspicious they may notice.
4. Use of a shredder to destroy documents containing bank account numbers and other confidential information is recommended.
5. Keeping the company's computer system securely protected against invasions is vitally important.
6. Investigating any websites of companies with names very similar to one's own business is advisable.
7. Making sure all employees know not to divulge certain information is a necessity.
8. Frequently checking state and local licensing agencies to ensure that official information on file concerning the corporation, its name, officers, and address, are all accurate, and similarly checking with the Better Business Bureau and other local organizations, is a good practice.
9. Routinely keep an eye on bank accounts for any unauthorized withdrawals or payments.
10.Knowing who the other people and businesses are, who share residency in the same building or have mail boxes there, adds to safety.
11.Check with insurance companies and banks about protection programs they can offer.
12.Have a set procedure in place so that the company has a definite checklist of things to do as soon as there's evidence of a corporate identity theft.
13.Check the company's credit rating frequently for any sudden change for no apparent reason.
14.Likewise, be suspicious of any mail that mysteriously does not arrive, but should have.
15.Make sure that the building is physically secured against trespass, breaking and entering. The Goal is Peace of Mind Without becoming paralyzed with fear and paranoia, a company can continue its daily operations with a sense of security as long as all employees adhere to these common sense precautions against the possibility of corporate identity theft.

This article was written by Martin McMahon, an expert in the Business Security category at


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