Think identity theft only impacts individuals? Think again!
Business identity theft, also known as corporate or commercial ID theft, is a very real threat for business of all sizes. In the case of a business, a criminal will hijack a business’s identity and use it to establish lines of credit with banks or retailers. This gives thieves free reign to purchase objects or gift cards that can then be exchanged for cash or sold.
As a business owner, what’s important to understand is that liability in business ID theft is much higher for businesses than for individuals.
While consumer banking accounts are covered under Consumer Financial Protection Bureau regulation that requires banks to provide reimbursement for certain fraud losses, this regulation does not apply to business accounts.
Instead, business and commercial bank accounts are covered by the Uniform Commercial Code (UCC), which means business account holders have shorter reporting timelines, less protections and significantly higher liability for fraud than consumer banking customers.
As a result, it’s even more important to protect your business from identity thieves. Here are some actions our team of business bankers recommend taking to help prevent ID theft:
Put together a plan
Just like all other things when it comes to operating a business, planning is critical. Take the time to identify what steps you will implement to prevent and deal with ID theft. Having a security strategy for ID theft will not only help put your mind at ease, but will also allow you to act swiftly if your business is targeted.
Establish clear internal controls
Try to avoid establishing a “master” user account and password where an employee or individual can gain access to all your company information. In addition, establish a clear protocol to follow in the event of a data breach, including assigning someone to manage the breach and outlining what actions are needed to be taken.
Store your documents in a secure location
Any documents or records that you need to run your business should be maintained in a secure location. You should also limit the amount of mail and paper with financial information printed on it to reduce the chance of criminals stealing it. If possible, you should consider signing up for electronic statements for bank accounts, credit cards and bills whenever possible.
Be smart about sharing and storing important information online
Using or sharing sensitive information such as an employer identification number (EIN), account numbers, financial documents or personal information online is a surefire way to put your business at risk of ID theft. If there is no way around providing this type of information, make sure the site is secure and its security certificate is up to date.
Take advantage of the tools available to businesses that make it easier for you to ensure you’re operating online in a safe manner.
One such tool is IBM’s Trusteer Rapport service that MidWestOne makes available to all Online Cash Manager customers. Trusteer Rapport plugs into your existing web browser and blocks any malicious software (malware) that may be on your computer from interfering with your secure online banking session.
Keep an eye on your company’s credit report
Just like individuals, businesses have credit reports, too. By monitoring your company’s profile with all three major business credit bureaus (Dun & Bradstreet, Experian and Equifax) you can quickly identify possible identity theft. You can do this by subscribing to their monitoring services which gives you access to files at all times. You should also take advantage of email alert notifications so you can be notified of any new activity occurring on your company credit files in real time.
Don’t forget about your vendors
Protecting your business goes beyond your own four walls. You must also consider the vendors you work with on a regular basis. Ask about their security practices to ensure you’re not putting sensitive data in the hands of a company that doesn’t adequately protect it.
If you are looking for more information about how to protect your business from commercial ID theft, please reach out to your local MidWestOne banker.