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How to Protect Your Business from Identity Theft

How to protect your business from identity theft

Image credit: ID Theft Protection | Flickr

Small businesses face a range of security threats on a daily basis and can often be more vulnerable than larger organizations. Of all the security threats that companies face, identity theft is one of the scariest since it has the power to damage a company’s relationship with its customers and stakeholders.

Worst of all, the ripple effects of identity theft can threaten the very existence of a business—causing it to close down or file for bankruptcy. That’s because business identity theft can negatively impact cash flows, cause problems with creditors and suppliers, and even taint a company’s reputation. Protect your business from identity theft by following these tips.

1. Switch to Digital Statements

Going paperless can go a long way in protecting your business from identity theft. Those mail envelopes and old bank statements might not mean much to you. But to an identity thief, these documents are akin to a gold mine.

Minimize vulnerability by switching to digital statements.

Paper documents—bank statements, credit card bills, HR files contain information that can be used to attack your business. Updating your processes to digital and requesting financial institutions to be sending digital copies of statements and reports can help to protect your business from identity theft.

2. Monitor Business Credit Reports

For two years in a row, credit card theft continues to be the most common type of identity theft reported to the Federal Trade Commission.

One measure you can take to prevent business credit card theft is to regularly check your company’s credit card report for unusual activities that might hint to identity fraud.

To stay safe and vigilant at all times, you might want to consider enrolling in a credit monitoring service. Such services will constantly monitor your accounts for any suspicious activities and send you timely alerts so you can take the necessary actions.

3. Protect Sensitive Data

Switching to digital statements is the first step towards protecting your business from identity theft. Next, you’ll want to keep your digital statements and all the customers’ data safe from hackers and cybercriminals.

So how do you do that?

First, use encryption to store and transmit your customers’ data including credit cards, bank details, and personal information. Secondly, install a firewall and ensure all the computers have antivirus and antimalware programs installed, and are updated to the latest version.

4.  Be Wary of Phishing Scams

Phishing scams send emails that “impersonate” reputable entities like credit card companies or government institutions and are meant to trick the recipient into sharing confidential information.

Cybercriminals will send phishing emails to you or your employees to trick them into sharing confidential business information such as account number, EIN, SSN, etc. Note that legitimate financial institutions and government agencies will never request you to provide or verify this information via email.

5. Educate Your Employees

Cybercriminals are more likely to approach unsuspecting employees so educating your employees about the common means hackers use to steal business information is paramount.

For instance, your team might not realize that scammers can use your business EIN to establish corporate credit card accounts or commit fraud. Educating your employees will help them to better safeguard your company’s data and stay vigilant at all times.

To Sum It Up

No business is immune to identity theft. But if you follow these tips, you will be able to prevent identity theft or mitigate its impact in the event your business is compromised.