Protect Your Business and Customers From Identity Theft: Five Steps You Should Take Now

Identity theft impacts more than nine million Americans every year and costs the economy an estimated $56 billion in losses. While thieves tend to target individuals, they aren’t the only victims. Your New York or New Jersey business is also at risk.

In fact, business identity theft (also know as corporate identity theft) is steadily growing. Common frauds include creating counterfeit checks using your company’s bank account number, sending correspondence purporting to be from a bank or an official government agency in order to obtain financial information, purchasing merchandise or services with stolen credit card information, and sorting through trash or recycling to obtain sensitive data.

To protect your business from these and other prevalent threats, it is imperative to have proper safeguards in place. Below are five key tips to consider:

• Employ anti-counterfeiting measures, such as difficult to replicate logos, watermarking, and nonstandard paper, for all of your important corporate documents.
• Verify the identity of the person or company requesting information, before proving your employer identification number (EIN), social security number, and other sensitive information. Be particularly careful when online, and only provide the minimum information required and verify that the site is secure.
• Securely store all sensitive documents. For paper documents, this means keeping them in a locked fine cabinet and limiting access to only those employees who absolutely need it. Password protection and data encryption should be used to protect electronic documents.
• Properly destroy business records. Documents should always be shredded prior to disposing of them. Many identity theft scams are surprisingly low-tech, such as rummaging through recycling bins and trash dumpsters.
• Regularly monitor your company’s credit profile and bank accounts for signs of fraudulent activity. If a credit or debit card is lost, stolen or potentially compromised, cancel it immediately. In addition, if it takes an unusual amount of time for a check to clear, follow up with the recipient and consider canceling the check.

Businesses should also check to see if their current insurance policies offer identity theft coverage. If not, this is something you may want to consider, as recovering from a hacking attack or data breach can often be a long and costly process.

If you have any questions about this post or would like to discuss how to protect your company from identity theft, please contact me, Fernando M. Pinguelo, or another member of the Scarinci Hollenbeck Cyber Security & Data Protection Group. For more information on Cyber Security and Data Protection, visit eWhiteHouseWatch (www.eWHWblog.com)