Is Your Business At Risk?

Cindy Schroeter Graham

May 2006

Personal information is not the only target for identity thieves. Criminals are targeting large and small businesses as well. Any person or entity that has a name and a tax number is at risk of becoming a victim of fraud and identity theft.

Identity thieves target businesses because the financial reward appears greater. A corporation with good credit and large assets can provide a thief with hundreds of thousands of dollars in products or services.

Business identity theft can result from the same low tech means of obtaining information as individual identity theft. It can also be accomplished through diligent searches of corporate filings, patent filings and other public information. Business identity thieves usually work with accomplices. These thieves are diligent, taking the time to create the illusion of authority on the part of their targeted victims.

The range of theft varies depending on the business targeted, from document theft, counterfeiting, impersonation, forgery and theft. These acts can result in changes to the corporate structure including the principals, the company address, the corporate minutes, real estate holdings and asset transfers.

Document theft can be a big source of information. It comes in two types: corporate espionage and identity theft. Corporate espionage doesn’t need James Bond anymore. It can be accomplished by going through a company’s trash. High tech methods are also used to obtain information as well as create false documents, corporate IDs or bank documents.

Time to Get Suspicious

Business thieves can pose as legitimate representatives from your business or industry to make large purchases or obtain credit. This could include new computers, office equipment and corporate credit cards. Thieves establish credit with the vendors, place their orders and have the merchandise delivered to a new location. Never having been paid for the merchandise, the vendors will eventually come to you for payment.

Companies have discovered unauthorized product purchases, unauthorized agreements to connect or disconnect services, unauthorized real estate transactions such as selling the company owned real estate, and the unauthorized use of private client or employee information.

This could also mean that an imposter has changed your company’s current information on your accounts to redirect correspondence directly to the thieves. By doing this the thieves establish a relationship with the vendors, and the vendors are less likely to take notice of any red flags as the thieves proceed with their schemes to defraud your company.

Unexpected calls could be your first alert that something huge is brewing. Don’t ignore the underlying issue. Find out who authorized the change in service and the reason for the change request. The reason for the change given to the utility service could be the underlying target of fraud. One of the most common reasons for a change in utility service by an established company is due to the pending sale of property. This could be your wake-up call to investigate deeper. Here are some red flags to alert you of potential problems:

- Invoices for unfamiliar goods or services.
- Unexplained or unauthorized charges on business credit cards.
- Unexpected notice from a collection agency about an unfamiliar debt.
- Unusual telephone charges.
- Unexpected or unexplained change of your address.
- An unexpected decrease in the number of calls you usually receive from your usual vendors or bank.
- Unexpected calls from new vendors.
- Unexpected calls from utility services.

Are You a Victim?

If you suspect your company is a victim of business identity theft, you should obtain as much information as possible from the source of the suspected transaction. Get names, dates, phone numbers—whatever information you can as to who authorized the fraudulent activities. Make sure you keep a log containing the name and phone number contacts you talk with.

Just as in personal identity theft cases, a police report is an important first step. A police report will help to reestablish your good business name and credit with the companies defrauded by the criminals. The more information you can obtain from the source of the unauthorized activity, the more complete the police report will be. Make sure the police take the time to make a full report of your incident.

Prompt action on your part can help limit the negative effects of identity theft. In the event you, an employee or your business becomes a victim, follow the checklist below.

Contact the credit bureaus. For business identity theft, contact Experian, PO Box 2104, Allen, TX 75013, www.experian.com, and Dun & Bradstreet, 103 JFK Parkway, Short Hills, NJ 07078, www.dnb.com.

For personal identity theft, contact the three major credit agencies: Equifax, (800) 685.1111, www.econsumer.equifax.com; Experian, (888) 397.3742, www.experian.com; and TransUnion, (800) 888.4213, www.transunion.com.

File a police report and contact the Federal Trade Commission at 877-IDTHEFT (438-4338).

Contact your creditors. This includes all credit card companies, mortgage companies or banks. Also, any company where you have loans, credit cards or lines of credit. This includes vendors.

Stop payment on any stolen checks and close unauthorized or compromised accounts.

Contact your state’s public utilities commission and remove fraudulent cell phone charges. The Federal Communications Commission can be reached at (888) CALL.FCC (225.5322).

Report stolen Social Security numbers to the Social Security Administration, (800) 772.1213.

Notify your local department of motor vehicles to make sure someone doesn’t attempt to get a driver’s license or register a car using your identity or your business identity.

Obtain copies of corporate filings from the Secretary of State where your business is registered. Look for any new filings or amendments that may contain information that could lead to the discovery of the criminals involved.

Business identity theft is a growing crime. It may be more prevalent than we think. No business wants the public to know that its information has been compromised. Loss of time and money to recover, loss of integrity and client trust could all be side effects of being a victim of business identity theft.

Protect yourself, and your business.

About the Author
Cindy Schroeter Graham is an author, speaker and expert on identity theft prevention, providing secure information handling evaluations and implementations to businesses nationwide. Her book, Who Else Is You?, outlines strategies for reducing the risk of becoming an identity theft victim. To book Cindy for your next event or to schedule a consultation, call (970) 285.1581 or visit www.whoelseisyou.com.