It's important to make a name for yourself in business. However, having other people use your small business' name or sensitive information is less than ideal.
According to PwC’s 2022 Global Economic Crime and Fraud Survey, 46% of organizations experienced some form of fraud in the last two years. Business identity theft is a serious issue for both small businesses and their employees. Find out how identity theft can impact your business and how you can protect yourself in the future.
How Does Identity Theft Affect Businesses?
Identity thieves can target your business in several ways – by attacking your company directly or targeting your employees. While one method is a more direct attack on your business, both forms of theft will end up hurting your business and costing you time and money.
Examples of business identity theft
There are multiple ways that fraudsters can use your business’ identity against you. Corporate identity theft scams include:
- Fake invoices
- Phishing emails
- Fake social media accounts
- Lookalike websites
- Tax information abuse
- Trademark ransom
All of these forms of fraud are used to gain access to something – your back account, personal information, and more. Stolen money and information are just the beginning for the problem. Business identity theft can lead to credit score drops, IRS audit penalties, and a hit to your company’s reputation.
Examples of employee identity theft
There are several different ways that identity theft can wreak havoc on your employees’ personal lives.
- Stolen debit cards, credit cards, or checks
- Fraudulent change of address
- Social security number fraud
- Passport abuse
- Drivers license misuse
- Hacked email accounts
It’s also important that attacks against your employees can impact your business in multiple ways. The most obvious issue is the personal toll that identity theft takes on your workers. According to Allstate, it can take up to 200 hours to resolve identity theft. That’s a lot of time and energy, and your employees may need to take time off to deal with the fallout caused by identity theft.
There’s also the emotional impact of identity theft. The Identity Theft Resource Center reports that 86.7% of identity theft victims felt stressed, 90% couldn’t sleep properly, and 36.7% suffered from panic attacks. That level of emotional distress will distract your employees and most likely impact work performance, which is why safeguarding them from these issues can directly benefit your business.
How To Prevent Identity Theft At Your Business
Identify theft can happen to anyone, from a single person to a major corporation. However, that doesn’t mean you can’t take measures to prevent identity theft. Use the following measures to defend your business and employees from future identity theft attacks.
Add extra security measures
Protect your business by making it harder for fraudsters to access your information. One of the most common ways for people to steal a business’ or an employee’s identity is to access their private accounts – emails, social media accounts, and more. The following steps can help secure these accounts and shield them from intruders:
- Use multi-factor authentication to log into accounts
- Regularly change login information
- Set password policies to dictate password strength and prevent password duplication across platforms
- Store sensitive login information with a secure password management system
Keep any software or computer systems up to date
Outdated software and other tools can be targets for identity theft attempts. Make sure your business has an updated firewall, anti-virus software, anti-malware software, and pop-up blockers. Any other online tools that you use, such as customer relationship management software, should be as up-to-date as possible. If you have any virtual private networks (VPNs), double check that they were implemented correctly for any individuals accessing information offsite.
Train employees
The more prepared your employees are to spot potential identity theft attacks, the better. Conduct cybersecurity training to educate your employees about what to look out for during and outside of work. Teach employees how to spot phishing emails, scam texts, and other attempts.
You should also highlight standard security protocols and best practices such as your password policies, how to set up multi-factor authentication, and more. Finally, let them know how to report questionable messages and other warning signs so that you and the rest of your business can stay safe.
Offer identity theft protection benefits
While you can take measures internally to defend against data breaches, there’s only so much that you can do to prevent identity theft outside of your business. Your employees are still at risk for data security attacks and stolen identities can still have major impacts on your employees’ personal lives and production on the job.
Offering identity theft protection benefits can help safeguard your employees. These benefits can help protect your employee’s finances, social media accounts, and more during attacks. Identity theft protection also helps employees limit potential damage and quickly resolve the situation.
What To Do If Your Business Identity Is Stolen
Despite your best efforts, there are times when your business may be a victim of identity theft. The good news is that there are additional steps you can take if someone has stolen sensitive data and personal information from your business. The IRS recommends taking the following actions if your business information is compromised:
- Contact the IRS as soon as you believe someone is using your Employer Identification Number.
- File a police report with the local police department.
- Review and reconcile any account statements as soon as you receive them.
- Review all business registration information online and look for suspicious activity in bank accounts, online accounts, and any other pertinent sources.
- Contact one of the three credit reporting companies – Equifax, Experian, or TransUnion – to place a 90-day fraud alert on your credit reports. Once you contact one company, it must tell the other two to do the same.
- Request a credit freeze from each of the three reporting companies.
- Close any accounts that may have been compromised or tampered with during or after the attack.
- File a complaint with the Federal Trade Commission.
- Stay on alert for suspicious activity and conduct regular business credit reviews every year.
Protect Your Business From Identity Theft
Between on-site safety and online security, it’s vital to make your small business as safe as possible. That’s why GMS helps employers protect themselves and their employees from identity theft.
Our goal is to make your small business simpler, safer, and stronger. In addition to providing expert payroll, benefits administration, and other HR management services, we provide clients access to GMS Connect. This cutting edge software allows users to securely access all their employee data online. We can also help you offer additional benefits such as identity theft protection to protect your employees and enhance your benefits package.
Contact GMS today to talk to one of our experts about how GMS can save you time and protect your business through benefits administration and other services.