Business identity theft is a relatively new form of identity theft that has been in the news recently. A criminal can steal a business’s identity much the same way that they can steal an individual's identity: by getting hold of critical identifying information for your business and behaving as though they are the business owner acting on behalf of the business. The criminal can revive a dissolved business entity, or assume the identity of a going concern. They may file change of address information with the State or simply file a change of address with the post office.
Once the criminal has established a stolen business identity, they use that identity to establish lines of credit with banks or retailers, then use the credit to buy retail goods that can be bought and exchanged for cash or easily sold.
The damage can be devastating to your business. The damage to the your credit history can lead to denial of credit and operational problems. The cost to clean up and correct the damage can be hundreds of dollars and hours of lost time.
Part of your business planning strategy should be a business security plan, including a fraud prevention and identity theft prevention plan. Protect your business's sensitive information, such as bank records and tax returns, by shredding copies of these documents that you do not need, and storing the documents you keep under lock and key. Keep an inventory of the physical documents that you keep on hand: knowing what you have is a great way to ensure that nothing goes missing.
Consider limiting the amount of mail and paper with financial information printed on it to reduce the chance of criminals stealing it. If possible, you should consider signing up for electronic statements for bank accounts, credit cards, and bills. Business tax returns can be e-filed, and you do not need to print every receipt you get or keep. Keep electronic records private, and be careful about who has access to those records, how and where they are stored.
Protect your business's online identity by keeping passwords confidential and making them strong (using capital and lower case letters with numbers and symbols). If you use Cloud Computing services, look for Verisign, McAffee Secure or Truste security certification on your systems.
Also, be very careful with owners' information, such as social security numbers, company credit card numbers, and driver's license information. You want to keep this information away from the prying eyes of your employees as well as outside parties.
While it is impossible to keep your employer identification number (EIN) completely private - it is, after all, provided to employees on their W2's, to independent contractors on their W9's and is readily available online via Sunbiz.org - you should never provide it to anyone without good reason. There's no point in doing the criminal's work for them! Likewise, never give social security numbers, financial information, or personal information to anyone unless you initiated the contact, have confirmed the requesting person's identity, and have a good reason for disclosing that information.
If a credit or debit card is lost or stolen, cancel the card immediately. Also, if a check is not processed in a reasonable amount of time, contact the payee and consider canceling the check.
Finally, if you dissolve your business, be sure to promptly file Articles of Dissolution with the Florida Department of State. To be extra cautious, notify the credit reporting bureaus that you are closing your business and will no longer be applying for credit.