While personal identity theft is widely recognized and has a long history, business identity theft is lesser known and relatively new. That said, business identity theft can be very costly and the threat of it should be taken seriously.
Business identity theft happens when thieves pose as representatives of the business to gain access to cash, credit, or loans. Thieves get this access by stealing bank account, credit card, or business information. These thefts often go unnoticed until significant damage is already done, which can take a lot of time to repair.
Some ways that thieves might get the information they're looking for include:
There are multiple things that thieves might do with the information they obtain such as opening bank accounts, credit cards, or loans in the business's name, obtaining temporary office space, and ordering merchandise or services. To prevent such identity theft, you can protect your business information, raise awareness within your organization, and monitor your business's credit.
Monitoring Your Credit
There are several differences between consumer and business credit reports. Consumer credit reports are based on information primarily provided by lenders and can only be accessed by businesses (such as banks or potential employers) once the individual has granted permission.
Business credit reports include information from creditors and in some instances supplemental information from businesses themselves. Business credit reports can be accessed by anyone without the permission of the business. In addition to the major consumer credit bureaus, there are other agencies that report only on business credit, such as Dun & Bradstreet. Business credit reports are not provided for free, but like consumer credit reports, each agency provides a potentially different report. It is important for small businesses to track their credit information because 60% of business that are victims of identity theft will close within one year.
To get started, you can purchase reports or monitoring services directly from reporting agencies. Information can be found using these links: Dun & Bradstreet, Experian, Equifax. Of course, a variety of companies offer small business credit monitoring services as well. With the risks of identity fraud increasing, it is important that you use every means available to protect your business.
The information provided is not intended to be legal, tax, or financial advice or recommendations for any specific individual, business, or circumstance. TowneBank cannot guarantee that it is accurate, up to date, or appropriate for your situation. Financial calculators are provided for illustrative purposes only. You are encouraged to consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.