Avoiding ID Theft with Your Small Business

Are you completely safe from small business ID theft? Regardless of how safe you think you are, you are never completely immune from the possibility of small business ID theft, fraud, or data breach event. What would your business do if it faced fraudulent activity based on ID theft? How would you respond to customers or clients if their private information was breached? And most importantly, how can you prevent any of this from happening?

What is Small Business Identity Theft?

Personal ID theft happens frequently where someone uses another’s social security number to obtain fraudulent credit cards, loans, bank accounts, and other fraudulent financial access.

Identity theft in small business is similar, but more could be at stake. A breach in security could reveal your small business information or your clients’ personal information. This information could be used to:

  • Create unauthorized financial activity in the business’ name
  • Begin fraudulent activity with clients’ personal information

Either of these instances could result in significant dollars lost and drops in credit scores. Small businesses with less than 100 employees seem to be more at risk. According to the Association of Certified Fraud Examiners (ACFE), the median amount of loss from a small business identity theft is $200,000, and most losses take up to two years to discover.

How Can You Avoid ID Theft?

Avoiding ID theft means starting and enforcing strict security policies. Here are a few identity theft tips to help you implement a security policy:

  • Give Personal Info Access To Only Trusted Employees – Much of small business identity theft happens on the inside. An employee with access to personal information, such as credit card numbers, driver’ license numbers, social security numbers, and bank account information, can use the information for their own personal fraudulent activity or sell it to others who intend to perform fraudulent activities.

    Make sure you secure your client data. Only specific individuals should have access on computer databases, and hardcopy files should be sealed and stored in a secure location.

  • Secure Your Technology – You most likely have private information stored on database files that can be found on company servers, as well as other laptops, smartphones, PDAs, etc. Establish strict internal controls over what data can be transferred. Keep all data secured with password software. Encrypt data when necessary to prevent hackers from seeing internet data.

  • Monitor Your Credit – Make a regular check of your small business credit file with all the major credit agencies. Once a year should be the minimum, but preferably at least twice each year. Keeping track of your credit activity will help you spot irregularities and stop fraud in its tracks.

  • Increase Awareness – Another way to avoid ID theft is by creating safety awareness among all your staff and employees. Create a data security policy and make sure everyone within your business knows how to handle private information. Also, inform them of what to do in a security breach situation.

These identity theft tips are only a few of the things you can and should do. Avoiding ID theft is possible, and the steps you take will ensure that your business information remains secure and private.