There are many stories of identity theft coming in the media. Most of these stories are focused on individuals whose identities are stolen. However, no one seems to be interested in understanding the impact of identity theft on small businesses.
Surveys have shown that one in sixteen businesses is attacked by identity thieves.
Most of the small business owners are interested in developing their business and making profit. In the process, they tend to neglect the security aspect. This is more likely in case of newly started businesses. Many established businesses also do not have a plan to react to such theft.
It is important to understand how identity thieves can harm the security of your business.
1. The thieves can get access to your company’s checking accounts as well as business credit cards and take away the money.
2. Some smart thieves can open a new checking account and obtain credit in the name of your business. This credit can be a big risk to your business.
3. The employee information or client information of your business is also at risk. Theft of such information may lead to serious consequences. Such information may be sold to other thieves, and it will increase the risk tremendously. If the identity details and other personal information of the customers are stolen, customers may sue the business for damages.
4. There may be some other risks to your business. Someone may change the name of your business or address of your business to capture important incoming letters. It may result in large unauthorized purchases, difficulties in credit ratings and damage business credibility in gentle. If it is your personal business, your entire financial life is in danger.
5. There is a new law introduced recently – Fair and Accurate Credit Transactions Act (FACTA) which deals with the security of identities of customers and employees of all businesses. If any business is negligent about securing this information, it can be liable and can be prosecuted for heavy penalties.
Identity theft is no more a civil matter. Businesses can be prosecuted for criminal charges if they are negligent in securing the information of their clients or employees.
By: Chintamani Abhyankar