Whether you’re opening your first ever business and are the only one in the entire company or you’re running a small business with a few dozen employees, there is one thing that you’ll need at all times: capital. The words for “silver” and “money” are the same in at least 14 different languages; and while silver is great to possess, a business of any kind needs cold, hard, cash.
In fact, according to a U.S. Bank study, 82% of companies that fail do so entirely because of cash flow. Hopefully, you’re getting the hang of running your own business, are offering quality products and services, and are keeping your clients happy at all times. Unfortunately, even if you’re doing all of that, your company is still in jeopardy of being deprived of its cash.
Identity theft is a serious problem across the U.S., but so is business identity theft.
Compared to how much we think about personal identity theft, organizational identity scams can feel like an afterthought — but they need to be taken seriously.
The Internal Revenue Service (IRS) reported a 250% increase in business identity theft cases from 2016 to 2017, resulting in roughly $137 million in total damages.
“Fraudsters are stealing as much as $1 billion a year from small and mid-sized businesses in North America and Europe, and the numbers are only going to increase,” said Mike Gross, director of product innovation for global fraud and identity at Experian. “Because the largest institutions have sophisticated fraud prevention solutions in place, the latest fraud attacks are looking to exploit the next tiers of businesses that are typically not as well defended.”
Here are some great tips that will help you protect your small business from commercial identity theft:
- Utilize an EIN system — Employer identification numbers (EIN) are essential for businesses hoping to remain secure. It’s a much better idea for sole proprietors to use an EIN, which can easily be obtained through the IRS’s website.
- Be careful of individual scammers — Criminals are very sophisticated and innovative, but that doesn’t mean they’ll stop looking for quick and easy ways to access a company’s network. Rather than developing an intuitive process of hacking into a company’s mainframe, they can get everything they need from simply grabbing a wallet off you or an employee. The magnetic strip on a credit or ID card can store up to 60 characters magnetically and hold all kinds of valuable information. Make sure to remain vigilant during the workday and beyond.
- Don’t use personal devices at work — Though it might be much more convenient to simply use a laptop or access files on your cell phone throughout the day, it’s not recommended. Bringing your own devices into the workplace will introduce all kinds of extra risks for your business.
“The risk is definitely real with mobile payment solutions, and account takeover fraud should be an immediate concern for small business owners,” added Gross.
Whether you’re in the office getting work done or back home relaxing, you should always be aware of what’s going on with your company’s digital information. If you notice the IRS rejecting any kind of document from your business, that could mean an identity theft has occurred and you need to look into it.