Feb 04, 2013 Dave King
Business identity theft has been an increasingly complex issue in recent years, especially as more companies begin to store and manage data in digital formats. As consumer identity theft has also intensified in the years following the Great Recession, corporate executives need to ensure that their companies are protecting employee and customer data to avoid potential hurt reputations and lost revenues.
Proactive and informed preparation is key to ensuring proper ID verification practices and protection against identity theft. Many experts believe that identity theft is an avoidable crime, yet it still affects millions of individuals and thousands of businesses every year. The cost of these crimes is estimated to exceed $1 trillion in the United States each year, and thieves are only becoming more capable of stealing funds from unsuspecting victims.
While data security software is a crucial component of protection in the digital age, more traditional processes such as shredding sensitive paperwork and safeguarding physical information are still essential. Many cases of identity theft stem from improper disposal of documents, and this issue can be avoided almost entirely through better practices.
Businesses can avoid thieves
Management Today recently suggested several ways in which businesses can avoid corporate identity theft, which continues to intensify as a result of the global economic recession. Crime always spikes in times of hardship, and unrelenting turbulence in a variety of regions is leading to higher rates of identity theft than ever before.
According to the news provider, a study from Dunn and Bradstreet revealed that corporate identity theft comprises 15 percent of total commercial losses among businesses in the United States. Credit checking and regular assessments of corporate policies are among the best and more efficient ways of preventing identity theft in the enterprise.
The most devastating cases of corporate identity theft are often the ones that go on for years undetected. These are also the very same instances that could be avoided when companies ensure responsible employees are monitoring credit scores, accounts payable and receivable and other financial matters.
The source explained that one company lost nearly $750,000 as the result of identity theft, and was targeted by fraudsters because of its strong credit history. Management Today noted that this case was only brought to light because of a credit checking agency that believed some of the figures in the company's accounts receivable were suspicious.
Had the credit checking agency not discovered this issue, the crime could have accounted for even higher losses. The news provider stressed the importance of investigating any customers who request new lines of credit, and thoroughly evaluating all entities associated with the business processes. Additionally, several ID verification strategies can help defend against this crime.
Management Today asserted that all companies should look into recent changes of addresses for any entities they intend to do business with, while ensuring personal communication regarding all transfers of funds. Executives and managers should be on the look out for any suspicious activity of clients and associates, while cross referencing the information they give with public records from trusted federal or state agencies.
ID verification made easy
Protecting a company from identity thieves is not an impossible task, and can be efficient when approached in a proactive and informed fashion. Business executives should always research the best practices and compliance requirements as outlined by regulators such as the Federal Trade Commission, Better Business Bureau and Consumer Financial Protection Bureau.
Additionally, any businesses that do not feel entirely comfortable with the responsibilities associated with ID verification should consider hiring a firm that specializes in the processes. This way, companies can protect themselves, their employees and all clientele from the damaging effects of identity theft.