Protecting Your company Against Identity Fraud

Protecting Your company Against Identity Fraud

Today, many businesses are facing a huge threat daily. One of which is identity fraud. Identity theft is a case of impersonation where an identity of a person is stolen without their knowledge. Anyone’s identity can easily be stolen and used for fraudulent purposes so there are no really specific category of people affected.

It often requires personal and financial information which may include your social security number, your bank account number, your address history, credit card information, among other things. The identity thief may use those information to purchase stuff, apply for credit, loans and mortgages.

Just imagine the potential financial and credit rating damage that would do to your business. Our focus today is corporate identity fraud. This type of fraud involves an individual or group of people stealing a company’s identity and using it to buy goods and services by establishing lines of credit with banks or retailers (without their authority), personal information can easily be exposed online.

The criminal performs the schemes under the name of a well-established organization. This crime affects both employees, employer’s credibility and customer’s service. In most case, this happens as a result of negligence or poor security practices of the company. Many people’s finances could be affected by this mere negligence.

There are 500 reported cases of identity theft in the UK daily, Some Business have losses each year due to identity fraud. Yet, there is still very low awareness of corporate identity theft among CEOs to remind people of being security conscious even while running a business.

So, this is a situation you should be aware of so that your company will not fall victim. You just might be able to avoid a future harmful situation somewhere down the line. The consequences can be damaging, especially for small business owners.

Sometimes, fraudsters would hijack a company’s details and change every piece of information to their advantage. These criminals make use of the company’s Name, company Official logo, Employees’ names, director’s details, Federal Employer Identification Number (FEIN), Credit card information, Mission statement and Banking information and also Information about the company’s finances, credit, suppliers, owners and officers, and general business activities.

This information can be used to gain access to your bank account to make bank withdrawals, line of credit, file taxes and tax refund, seek medical aid under company’s name or dubiously use customers’ and employees’ information by pretending to be you. These acts can damage a person’s credit status, and cost them some serious time and money just to restore their good name.

Any organization can be at risk of being defrauded, even Schools, hospitals, Legal entities other than corporations. The companies or organizations that are easily targeted are those with bigger account balances, financial operations, higher credit limits and who make large payments.

Corporate identity fraud can negatively impact the cash flow of a company, cause problems with creditors, distributors and suppliers and even affect the business’s reputation.

There are a lot of tactics these fraudsters use in gaining access to one’s files. Some of the tactics they use in operation are phishing emails, fake invoices, and tax filing.

  • Phishing Emails: This requires the fraudsters to send out an email to the company’s employees or clients pretending to be you. In the email which might even have similar information and logo as your company, they request for the recipient to send some personal information, call a number for specific inquiry or even refer them to a link where they would drop the needed details. The links could have virus attached to it, which could allow the fraudster hack into your internal systems and steal important information from within. They are designed in a way that they appear to be from the original source.
  • Sending out Fake Invoices: The fraudsters send out fake fabricated invoices requesting some payments from customers.
  • Tax Filing: The fraudsters could steal your company’s identity and information filing for a fake small business tax return, to receive tax refunds which for you could amount to lots of tax penalties and an audit.

They can also:

  • Gain access to existing company’s financial accounts and simply stealing your money. Businesses, which may have large amounts of cash or credit are often targets. They make purchases with a credit card or company’s bank account number; identity thieves can make purchases until the fraud is noticed and accounts are frozen.

One of the effects of identity fraud includes:

  • A damaged reputation
  • Late payment on necessary utilities
  • Tax debts
  • IRS audit penalties
  • Damaged and Drop in credit score
  • Unexplained charges on your small business credit card
  • Withdrawals from your business bank account
  • Could lead to a criminal case
  • Huge loss in money
  • It takes time to resolve

Signs to look out for in identity fraud

  • When you notice you stop receiving mail from your bank or utility provider
  • When you apply for state benefit, financial services, credit loans or loans and you are not eligible because you already applied without your knowledge
  • When you receive receipts for goods and services you never requested for or purchased.
  • When you are requested to pay a debt, which was registered in your name or your company’s name that you were not aware of
  • When your bank and credit card statement begins to show signs of inconsistencies you are not familiar with.
  • Protect your company from identity fraud

As a small business owner, the safety of your data and risk of identity fraud should not be taken likely, because a lot could be at stake. There are a couple of steps you can take to protect your company from being targeted:

Protecting Your company Against Identity Fraud UK Hacker
  • Invest in software installation and constant update that can assess risks and help identify fraud or suspicious activity, make use of security or anti-fraud software. Like strong firewalls, VPN for outside access, antivirus, secure offsite data storage, software updates, secure wireless networks, among others and Multi-factor authentication which also helps to ensure that your online accounts are protected even if your username and password leaks out (Ensure to use strong and different passwords that cannot easily be guessed for each site).

It usually requires that you use at least two devices or accounts to log into an account. Get professional advice to help you implement those systems that could prevent and manage security breaches. Always make sure you review your privacy settings and the personal information that exists in the public platforms.

  • Train fraud investigation teams within your employees. Encourage cybersecurity training among your employees. By teaching your employees things to look out for especially when it has to do with identifying phishing emails and instructing them to report such directly to either you or your IT department. Your employees are a big asset so you need to Protect them at all costs too along with your assets.
  • Monitor and review your account regularly, checking your company’s credit report, account statements, business registration information and financial files for unusual activity that might indicate patterns of identity fraudulent transactions. A fraudster could slowly move money out of your account or credit cards which could take months and you might not know. That is why you need to monitor it strictly.

The earlier you notice the irregularities, the easier it will be to control the situation, and there are chance of preventing damaging losses. When you plan on disposing financial files of your company, it is best you shred them into pieces before disposing them. Performing a monthly bank statement reconciliation helps you compare your bank statement to your accounting books. It would then be easy to notice transactions on your bank statement that do not match with your books.

  • All documents with your company’s personal information and all customers and employees should be kept in a very secured place.
  • Do not give away important information on social media
  • Limit the amount of those who have access to important company Data, giving each authorized employee their own username and password, which remains private.
  • Do not share any private and sensitive detail about your business online or any public platform that could put your organization at risk of identity fraud. Companies who show off their assets and directors who put a public show off their status (or evidence of wealth like bank statements) online are most likely to attract the attention of fraudsters.

If you operate as a ltd, contact Companies House to report and reverse any unauthorized changes to your company’s records. Also, report the matter to your professional body, the police and to Action Fraud, the UK’s national reporting center for fraud and cyber-crime, and follow their advice.

What to do if you are a victim

The best thing for any victim is to act quickly to ensure there are no financial losses. Most times in such cases, round might not be able to handle the issue yourself. Like trying to investigate who the identity thief is or how the individual gained access to important areas of your company. You might even end up with more issues than intended. The best thing is to get HELP. A victim could:

  • Report the theft of personal documents like such as passports, driving licenses, credit cards and cheque books to the organization that issued them immediately it goes missing and suspicious credit applications to the police department and ask for a crime reference number.
  • Inform your bank, building society and credit card company of any unusual transactions on your statement.
  • Request a copy of your credit file to check for any suspicious credit applications.
Protecting Your company Against Identity Fraud in UK

You can also Contact CIFAS (the UK’s Fraud Prevention Service) for protective registration Application on Or visit them at:

CIFAS – The UK’s Fraud Prevention Service
6th Floor
Lynton House
7 – 12 Tavistock Square

To conclude on this, the effects of identity fraud can last between a few days and several years depending on the type of fraud it is and how early you are able to notice it. That is why it is always better to be on the lookout. It is easier to protect your company as a limited company or even a sole-proprietor than having to go through the process of facing the consequences of the damages it could do to you.

Identity theft can happen to anyone, including small start-up. Protect your business today against identity theft by taking all the necessary security precautions. When you do notice any form of fraudulent activity, make sure you report immediately and take actions. Most times, it runs deeper than we can see. Keep private data PRIVATE, work with your IT department and also raise awareness of identity fraud in your establishment so others can also be vigilant.

We at SURE FORMATION care about the growth of your business and we do hope you find the resources here helpful.

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