The Emerging Business Identity Theft


The digitization of the world has raised some serious concerns not just for the individuals but for businesses as well. Every day, a new scam is brought to light that leads to millions and billions of losses for the organizations and has a bad impact on the reputation. Running a business is itself a difficult task and the entrepreneurs have to be prepared for all the unexpected that might come in their way. The increasing trend of business fraud has raised quite a challenge for business owners to fight with fraud using effective identity verification solutions.

In this modern era of innovation, technology is rapidly changing making fraudsters sophisticated ever than before. The businesses will need to be proactive with a complete understanding of the rising risks of fraud that can land them into serious problems. According to the Association of Certified Fraud Examiners (ACFE), the small businesses having less than 100 employees face a median loss of approximately $154,000 due to fraud. This number is relatively higher for small businesses as compared to large enterprises. The reason is small businesses often stay oblivious of the fraud and have a misconception that the fraudsters only target well-developed organizations. 

In small organizations, most of the time the employees and customers are the one that takes advantage of the vulnerabilities in the businesses since being the insider they are more aware of the loopholes. Here are some most common fraud taking place in the business right under the nose of employers. 

Business Identity Theft – Causes and Prevention

Business identity theft is totally different from consumer identity theft. In this type of fraud, the person can impersonate the business to gain a monetary advantage. Most of the time people steal company credentials and information and use it to access company credit. Sometimes it happens that a person shows himself the employee of the company and open bank account and credit card using the business names. Doing so gives the fraudsters an advantage of high credit points and the loan from bank can be easily taken. 

This is all possible in a case if a person gets a hold of the company’s financial statements or tax number. By the time, business owners identify the fraud, it has already been quite late. It is critical for businesses to regularly check credit reports and keep sensitive information safe and secure. The employee access to the company’s sensitive information must be restricted. Moreover, the employees must be screened and verified regularly to identify the black sheep carrying risk potential. 

The perpetrators are always looking for opportunities to break into business accounts. Sometimes, the fraudsters can access the business bank account if the employees lose their paychecks. The company’s paycheck are quite sensitive since they contain business routings and bank account numbers. It is also a matter of concern for the employees who’s paycheck is lost. For, the fraudster can withdraw the money using the check. To eliminate such risks, it is recommended that businesses should limit the paychecks and deposit the salaries into employee accounts directly.  

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