Uncovering Business Identity Theft
While the majority of identity theft schemes prey upon individuals, small-businesses and organizations are increasingly becoming targets. Business identity theft is a serious threat, but it mostly flies under the radar simply because companies are embarrassed to discuss.
Although most companies are protected by copyright, patent and trademark laws, smaller companies lack the higher IT security measures that large companies have. According to recent studies by Javelin Strategy & Research this makes them 25% more likely to be victims of business identity theft over larger businesses. Not only do small businesses and business owners typically have larger lines of credit open than an individual, but they are unlikely to detect the fraud for six to eight months making them a prime target.
Business Identity has not been completely defined yet, but it definitely has been stolen. California has become the leader in offering identity rights to organizations and in 2006 they expanded the definition of ‘person’ in identity theft laws to include associations, organizations, partnerships, businesses, trusts, companies, and corporations. These types of amended laws have proved to deter business identity theft and provide greater assistance to those companies that have been hit.
Most commonly criminals assume the name of a business, rent out office space in the same building and order everything from corporate credit cards to hundreds of computers and equipment. In one instance the culprit billed a law firm for $70,000 in purchased equipment, hired a moving truck and disappeared from the building before the fraud was ever detected. This has been not only costly, but timely. If businesses had the same protection as individuals this would have been quickly resolved and the victims would have moved on. Credit card companies have also followed suit and began to remove the distinction between business identity theft and individual identity theft.
The lack of publicity on this type of Identity theft is solely due to a lack of reporting by companies. Businesses are required by federal law to notify consumers who’s personal information has been hijacked, but not if their businesses identity has been stolen. In order to save face, most business owners would rather not own up to such a breach to avoid looking like the pawn in a criminals scheme. Without incentives and assistance to a company who has experienced this type of transgression there is little reason for them to come forward.
Until businesses and their owners come forward to help uncover business identity theft there will be less laws in place to deter criminals and small businesses will remain vulnerable.
For more information on this issue check out BusinessWeek.
John Sileo provides identity theft training to human resource departments and organizations around the country. His clients include the Department of Defense, Pfizer and the FDIC. To learn more about having him speak at your next meeting or conference, contact him by email or on 800.258.8076.