Businesses like banks, credit unions, and e-commerce retail stores that take their customers’ personal information as part of their operations need sophisticated security, fraud risk, and prevention management systems to avoid cybercrimes such as identity theft.
While identity theft is a common type of fraud, many businesses are not always aware of how it works, often leaving them vulnerable until it’s too late.
What is Business Identity Theft?
By its basic definition, business identity theft involves the impersonation of a business. This occurs when a person with malicious intent poses as a company representative and acts on its behalf to commit fraud—for instance, abusing the business credit card and getting loans under the business name, leaving the business with massive debt.
Business identity theft is different from personal identity theft, as the latter targets sensitive information of one person and impersonates them for financial gain. In contrast, the former targets an entire organization and gains access to its bank accounts, credit cards, or other sensitive company assets.
Falling victim to identity theft can damage your reputation and affect the cash flow of your organization. In addition, since there are payment terms, it gives thieves a window to steal cash with less or zero risk of early detection. That’s why it’s crucial to have strong identity theft protection and prevention strategies.
6 Ways to Protect Your Business from Identity Theft
While it’s almost an insurmountable challenge to entirely eliminate fraudulent behavior, here are some ways to prevent it.
Set up strict business protocols
Establishing a set of rules for better communication and security is crucial for identity theft prevention. Examples of this are as follows:
- Restricting employee access to sensitive information, passwords, and other files (e.g., customer lists and accounting files)
- Changing passwords every quarter
- Storing business records in locked file cabinets or encrypted repositories
- Shredding old records
- Determining who is granted access to specific information and who is responsible for monitoring and regulating business-related information
- Revoking access to the company information immediately after an employee leaves
Educate employees in best cybersecurity practices
Understanding fraud protection and cybersecurity practices should start from the top down. Once you have internal controls in place, the next step is to train your employees to become aware of cyber threats and fraudulent behaviors, including their activities and procedures.
Some of the most essential identity theft prevention practices to teach should involve business protocol implementation, fraud identification, password management, secure internet browsing, email phishing, and how to report cyberattacks, among others.
Protect the whole computer network
Another way you can protect your business from cyberattacks is by upgrading your computer systems, encrypting and backing up all data, and installing a robust firewall with anti-malware software for good measure. You can also explore automated fraud screening systems to spot any unusual purchases, purchasing locations, and spending made under your business name.
Use data protection systems to protect sensitive data
Keeping essential business files on employee laptops may expose them if the device gets lost or stolen. To address this, use the password protection feature of the software or apps you use within the organization.
You can also add a layer of security to the company’s systems and records by using multi-factor authentication methods. Moreover, remind your employees to use strong passwords to deter hackers from gaining access to their devices.
Check business accounts often
Review all business account statements, registration information, credit reports, supplier information, and other pertinent business data. This way, you can spot any suspicious account activity, such as dubious updates, withdrawals, and unexplained charges on business credit cards, which can cause your credit rating to drop.
You can set up email alert notifications from monitoring systems of your account to receive real-time alerts of any activity happening across your company’s accounts.
Secure your online and offline files
If your business needs to keep paper documents that can be used to compromise your employees, customers, and organization, make sure to secure those records and that they don’t fall into the wrong hands. Place it somewhere safe where only authorized people can access it.
For online files, make sure to use a secure cloud or online storage system and have password protection. Most cloud-based data storage systems let you see who accessed files and if they have been shared. In addition, you can scan your offline records to have a digital backup.
Build a Strong Defense Against Identity Theft
Stopping fraud before it even happens is the best and easiest way to fight identity theft. Regardless of how big or small your business is, you must employ good internal controls and security practices to safeguard your organization from identity theft and other cyberattacks that may bring down your business.
Are you looking for ways to enhance your business security to protect your and your customers’ data? Q5id offers data management services that can stop identity theft dead on its tracks. Get in touch with Q5id now for reliable identity management solutions.