Identity thieves seem to be working overtime these days at the expense of both consumers and businesses.
In 2017, there were 16.7 million victims of identity fraud amounting to $16.8 billion stolen from the wallets of consumers. AV-TEST, an independent research institute for IT security, registers 350,000 new malware programs every day. The number of data breaches in 2018 alone is staggering with major companies like Facebook, Google, Saks, Lord & Taylor, Panera and Orbitz reporting stolen data.
While much attention is paid to consumer identity theft, the danger to small business owners can be even more perilous as both their personal and business identity could be at risk.
Small Business Owners Face Multiple Threats When it Comes to Identify Theft
As individuals, small business owners are just as susceptible to having their personal identity stolen as anyone else.
According to Experian, identity theft can have the following devastating effects on victims:
Monetary: 40% of identity theft victims incur an average $600 out of pocket expenses (even after banks and credit cards absorbed ID theft losses). Losses from debit cards may include the entire amount stolen by criminals.
Time: It could take an average six months to recover your identity—time spent from your job or business.
Lower Credit Scores: ID theft criminals opening new credit accounts in your name can negatively impact your credit. It’s also time-consuming for you to dispute charges made on a fraudulent credit account.
Emotional: 75% of ID theft victims reported being severely distressed over the misuse of their personal information. Feelings include fear, embarrassment, powerlessness & helplessness. In some cases, victims had suicidal thoughts.
Arrest: ID theft criminals could conduct illegal acts under your identity, leading to police knocking on your door. An unjustified arrest record could take months to resolve.
As a small business owner, you’re especially enticing to business identity theft criminals. Businesses generally have:
- Larger bank accounts
- High credit limits
- Business information readily available online
- Multiple vendor accounts
- Employees with access to all of the above information
Basically, identity thieves don’t have to work as hard to steal valuable and vital business identity information for the amount of wealth they can access. Plus, they are less likely to be noticed before they can do substantial financial damage to your business.
Beyond business identity theft, small business owners could be more susceptible to the data breach threats larger corporations face. According to Verizon, 58% of malware attack victims are categorized as small businesses.
Most small businesses do not have the same resources and larger corporations to prevent data breaches—a fact criminals frequently exploit. The sensitive information they can obtain can impact the small business’ customers and employees alike.
Data breaches can leave small businesses open to:
- Costly legal issues
- Time-consuming efforts to resolve customer credit issues
- Damage to their reputation and lost business
How Small Businesses Can Avoid Being an Identity Theft Victim
Unfortunately, if any part of your small business is online or you conduct business electronically, you’re open to identity theft.
However, there are steps you can take to minimize your risk of identity theft.
Use Security Software: Make sure your business uses the latest security software, firewall, and anti-virus protections.
Update Operating Systems and Software: Make sure your computer is using the latest operating system and software patches. Hackers are busy looking for vulnerable systems to attack and outdated operating systems and software can be their ticket into your business.
Update Business Registration Information: Your registration information is online. Keep your registration information up-to-date. Identity thieves are constantly looking for suspended or inactive companies for their illicit activities.
Encrypt: Be sure to encrypt all of your sensitive information such as tax records, client and vendor information.
Monitor: Check your bank and credit card accounts regularly for fraudulent transactions. Also, don’t forget to check your vendor accounts.
Avoid: Clicking on phishing emails or responding to unexpected phone calls from “officials.” Verify the authenticity of phone calls, standard mail, faxes or emails of questionable origin before responding.
Train: Take time for you and your employees to get educated on how identity thieves operate. A trained employee could stop an identity thief from damaging your business.
Too Busy? Delegate Your Tasks
We understand that small business owners have a lot on their plates already—especially if they have to keep looking over their shoulders for potential identity theft risks.
A virtual assistance firm like Business Solutions Unlimited can help take some of those tasks off your plate.
Feel free to give us a call at (904) 429-4588 and let’s see how we can help you with your business.