Banks can't afford to lose small business to ID theft

According to a study released earlier this year by Javelin Strategy & Research, 4.1 percent of small businesses were victims of identity fraud in 2010, compared to 3.5 percent of consumers, the Salt Lake Tribune reports. Furthermore, the average amount of fraud per small business was $4,851, compared to $1,574 out-of-pocket costs for the average individual. The news source suggests that because small businesses have larger amounts of money to steal and bigger lines of credit, they become easier targets for fraudsters. Entrepreneur magazine adds that these companies typically engage in a high volume of transactions that could put their information at risk, and their personal and business accounts can sometimes overlap. "The business owners better be paying attention because there are few protections for them, and it's going to impact them personally," said Jami Harrison, CEO of risk management services company Invisius, as quoted by the Tribune. Philip J. Blank, managing director of Javelin, recommends that banks and credit unions do what they can to protect small companies, as financial institutions tend to lose business when their clients become ID theft victims. Approximately 20 percent of small firms end up switching bank and credit card accounts after an incident, while 32 percent revert back to writing checks instead of banking online.