Is your business vulnerable to identity theft?

According to data company Dun & Bradstreet, business identity theft increased more than 250% in the first half of 2020. You can thank the pandemic — and the government’s release of relief and recovery funds to qualified U.S. businesses — for this remarkable number. In a more typical year, crooks use stolen business identities to file fraudulent tax returns, apply for credit and empty bank accounts. However they might try to use your company’s information, there are steps you can take to reduce the risk.

Protecting sensitive information

Thieves often use malware to infect computers and gather sensitive data from businesses. They also create fake websites that trick employees into entering login and password information. To protect against these tactics, deploy patches when prompted and maintain up-to-date security software. Store all sensitive digital files such as financial statements, invoices, bank statements and aging schedules in secure, password-protected locations.

Also, secure paper documents in locked file cabinets. When you no longer need sensitive paper documents, destroy them using a cross-cutting shredder. If you need to shred a significant volume of paper, hire a reputable service to destroy documents on your premises.

Regularly review records

So that you can act on suspicious activity before it leads to financial losses and reputation damage, monitor official records and other public information. For example, keep an eye on your business credit as well as the personal credit reports of owners. Also regularly review business records and professional license information with state, county and city registrar offices.

Bank accounts deserve special attention. Reconciling bank accounts daily is your best bet. If a fraudulent transaction posts to your business’s account, you must notify your bank within a certain time period to not be liable for the transaction. Also note that criminals often use wires to move stolen money overseas and beyond the reaches of U.S. law enforcement. If you never send wires, instruct your bank to block that capability from your accounts.

Don’t forget employees

Finally, don’t forget to involve employees in your fight against business identity theft. Coach everyone from executives to rank-and-file workers about the threats facing your company and how they can do their part to ensure sensitive data doesn’t fall into the wrong hands. Contact us for help strengthening your internal controls.