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As a citizen, every person is aware of how destructive identity theft is. Each year, identity theft causes considerable losses in psychological and monetary terms. Identity theft not only affects individuals but businesses as well. Each year the number of identity theft-related complaints increases staggeringly. Small business identity theft that involves stealing a business’ identity for more frauds – is a prospering business for fraudsters.
What is identity theft?
By definition, identity theft is the act of swindling a person’s details with the sole intention of committing more frauds. These frauds generally involve applying for credit or purchasing goods illegally in the actual person’s name. One common type of identity theft is tax fraud, where a fraudster uses an individual’s information to file a tax return and then claim refunds.
As a business owner, these identity thefts could prove devastating. If the thieves take out credit on your or your business’ name, it could be challenging to prove that it wasn’t you who took out the credit or buy an item.
Even if you can prove that your identity was stolen, your credit score would have been destroyed. It would mean that you or your business cannot get a loan or borrow money in the future. If this wasn’t it, fraudsters could commit employment identity theft where fraudsters apply for a job using someone else’s information.
What business information do identity thieves look for?
Most business identity thieves try to steal crucial business credentials like federal tax employer identification numbers. They can use this information to file false business filings and imitate the business at other places. When these identity thieves finally do get hold of the information, they can open a chain of credit, negotiate with vendors for better terms, and even apply for a loan. Once a thief gets a business credit card with a credit limit close to $100,000, they can buy anything, and the small business would be charged with the bill.
iDenfy offers identity verification solutions for businesses and organizations to create a safer, faster and easier customer onboarding process. With faster onboarding, customers enjoy a satisfactory service while the companies secure legit data.
The big fishes that fell prey
Even today, you can find new headlines stating large-scale data breaches at big firms. Among these were the cyberattacks against video conferencing company Zoom. In April 2020, news reports reported that more than 500,000 Zoom accounts were on sale online.
Sometimes, a data breach can destroy your business. If a data breach occurs and your customers realize that your negligent attitude led to the breach, they can take legal action. One example of this is British Airways who were fined £20m ($26m) by the Information Commissioner’s Office for a data breach that took place in 2018 and affected more than 400,000 customers.
Concluding note
Even though we constantly hear about identity theft and why we must keep our guards up, it is not enough. If we are familiar with the definition and how they operate, it can help business owners develop a much more effective way of protecting the business from identity theft.
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