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Understanding Business Identity Theft

Think that identity theft only hits individuals or the elderly? Think again. Thieves and criminals are targeting small and medium sized businesses all across the UK and the USA for quick and easy profit, with devastating consequences. In an age where digital information is freely available it’s a serious risk, so you need to know the facts before your business becomes the next victim of corporate identity theft.

What Is Corporate Identity Theft?

Identity crimes have evolved far beyond a crime of opportunity by petty thieves and drug users – it’s now a preferred criminal activity turned big business with more profit rolling in every year. Criminals ranging from street gangs to drug cartel to organised crime syndicates have actively embraced identity theft and cybercrime as key money making enterprises with low risk. Through this, thieves have learnt that business identities can also be stolen, and unsuspecting businesses can be very easy targets. But before we explain how corporate identity theft works, we need to explain exactly what it is. You see, just because a business has suffered a data breach doesn’t mean that their identity has been stolen. Data breach doesn’t automatically mean identity theft. Instead, like it’s consumer counterpart, corporate identity theft involves actual impersonation of the business itself. In fact, the term ‘corporate identity theft’ is misleading in itself, as corporations aren’t the only business entities victimised by this crime. Any type of business or organisation of any size or legal structure, from sole proprietorships, to partnerships and limited companies, government bodies, schools, trusts and non-profits can all be targeted by identity thieves.

Why Businesses Are Good Targets

When it comes to identity theft, criminals are faced with 2 avenues – individual or corporate. For most, the individual route is left to small time thieves, while the more professional, ambitious breed will go after corporates, non-profits and businesses.  But to understand why businesses make good targets for identity theft, you need to look at the gains and profits from the criminals point of view. For example, businesses tend to have:

Bigger Bank Accounts 

Business customers routinely maintain much larger bank account balances than your average consumer, and for good reason. Cash flow is a huge issue for all businesses, so the smart business owner will build up a buffer of cash in reserve. The average small business account may have between £5000 and £10,000 in it at any one time, with larger businesses sometimes keeping tens or hundreds of thousands of pounds in their accounts. When you compare this to the average consumer account of around £200-£500, it’s not hard to see why businesses make an attractive target. 

Flexible Payment Terms 

Because of their larger purchases, many businesses enjoy flexible payment terms or credit, allowing them to order and obtain goods or services before paying for them at a later date. For a criminal, this means they can make large purchases without paying a thing and disappear before the payment is due. They can also avoid the risk of early detection that comes with using a stolen credit card of cheque when the order is placed. 

Minimal Security

Small businesses are especially vulnerable, as many don’t have the most robust security in place. If they don’t have their own IT department, or they are overrun with tasks, keeping up the security needed can be challenging, and that’s what criminals are counting on. Targeted attacks exploit holes in the software smaller businesses use, while intercepting or stealing information in letters can give them all the information they need to start imitating your business.

Easily Available Information

The scary thing is, business identity thieves don’t even need to steal much of the information they need to impersonate a business, because so much of it is freely available now. Just go to Companies House and see how much information is freely available about your business thanks to the information age. All a criminal has to do is steal a few pieces of specific, targeted information and they’re away.

 

One of the ways corporate identity thieves get those last pieces of information is by accessing documents that have been thrown away or improperly stored. Bank details, for example, that have been put in the wrong place present an enormous risk, which is why it’s so important to stay on top of your secure document disposal. If you need help handing your shredding get in touch with us today for a free consultation.