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The Growing Threat of Business Identity Theft and How to Guard Against It

September 30, 2023

Posted in Uncategorized

Legal Services That Clients TrustWith identity theft consistently making headlines, many people are aware of the dangers it poses to individuals. However, what about businesses? Business identity theft is a real and growing concern, and it’s critical for business owners to understand the risks and how to mitigate them.

Understanding Business Identity Theft

In simple terms, business identity theft involves criminals posing as business owners or key personnel to obtain credit, loans, or even cash. This usually leaves the business grappling with unanticipated debts, potential damage to its credit, and a tarnished reputation.

Once these impostors gain access to business bank accounts, credit cards, or vital information like tax identification numbers, they can open new lines of credit or loans. The worst part? Many businesses remain unaware until debt collectors start making calls.

How Does It Happen?

The California Secretary of State highlights several methods by which thieves exploit businesses:

Setting up temporary offices or merchant accounts under a company’s identity.
Using stolen credit information to order goods or services.
Phishing scams targeting employees to snatch banking or credit details.
Dumpster diving for account numbers and sensitive data.
Submitting fake documents to alter a company’s official registration details.

Preventative Measures

To protect your business, consider the following precautions:

Periodically review company records, especially financial ones.
Ensure records with the Secretary of State are up-to-date. You can easily check this for free through their online portal.
Opt for secure communication methods with the Secretary of State.
Monitor your business’s credit profile regularly.
Limit access to sensitive company information and use password protection.
Properly dispose of business records.
Consider investing in business insurance for identity theft.

What If Your Business Falls Victim?

If you suspect identity theft, act quickly to:

Notify your bank, creditors, and credit card providers.
Report the incident to credit reporting agencies and law enforcement.
Correct any fraudulent changes with the Secretary of State.
Consult with your insurer and legal counsel.

In the end, vigilance is your best ally. Be proactive in securing your business’s identity, just as you would your own.

Protect Your Business Today!

Don’t wait for disaster to strike. If you need advice or legal guidance on safeguarding your business or addressing potential identity theft, schedule an appointment with our expert business litigation law firm today!