10 Reasons to Know How Identity Theft Impacts Businesses

10 Reasons to Know How Identity Impacts Businesses

In doing my research I found that identity theft has a huge impact on businesses and business owners aren’t of it, particularly small business owners, everything from their vulnerabilities…to the laws that govern their business.

Here ten main reasons why business owners, presidents, CEOs and key company personnel of any size business, large or small, need to understand identity theft and how it impacts their business:

1) Business owners must understand the seriousness of the identity theft because it is reaching pandemic levels. 1 out of 10 Americans are victimized each year and that is just the ones that are reported.

Identity theft isn’t just some nuisance crime. Victims can spend countless hours and sometimes hundreds or thousands of dollars trying to straighten up the mess criminals leave when they assume the financial identity or character identity of someone.

2) Anything that seriously affects a business’s employees, directly affects a business. If employees have to deal with a serious issue such as identity theft it affects their performance on the job. It can take an average of 600 hours for a victim to straighten out the mess that identity thieves leave.

That is equal to 15, 40 hour work weeks. The majority of the work they have to do to restore their identity has to take place during business hours, dealing with banks, creditors and other affected or involved organizations making phone calls, get affidavits notarized, etc. This means they will take more time off of work and if they are at work they may be thinking about what they need to do next to restore their identity.

Besides lost time the business owner has to be concerned about reduced productivity, deteriorating quality of work and diminished quality in customer service.

3) Businesses are holders of protected information. Businesses compile a wide variety of records including:
1. Human resource records or personnel files
2. Customer and client account records
3. Vendor account information
4. Business account information

4) If a business’ customers are victims of identity theft it could impact the business. Aside from affecting the businesses reputation, the business could be held financially responsible.

5) The creditworthiness and viability of the business can be impacted if the business owner’s identity is stolen.

6) When business owners understand what is happening they can act proactively rather than re-actively. It is to a business owner’s advantage to see the trends. In recognizing the trends in identity theft they can be proactive in protecting their employees, customers and their business.

7) Businesses have more responsibility, and criminal and civil liability, than ever before and government agencies are increasing it. Government entities (law makers & the FTC) are recognizing that a lot of identity theft is happening because of the negligence of businesses. They are putting new guidelines, regulations and restrictions in place which is creating more problems and responsibilities for businesses. These rules also leave the door open for class action lawsuits with no cap.

8) Business identity theft is on the rise. The media’s primary focus is on individual consumers who are victims.

The FTC states, “Identity theft occurs when someone use your personally identifying information, like your name, Social Security number or credit card number, without your permission, to commit fraud or other crimes.”

By this definition, identity theft is a personal crime. However business identity theft is becoming a problem.

Business are becoming targets more than individuals because

• the payoffs are bigger
• generally higher credit limits
• make larger purchases than consumers

Small businesses in particular make bigger targets because they may be less savvy about protecting information than big companies. Bigger companies can afford to hire dedicated privacy officers.

A lot of times small business owners are just too busy to worry about identitytheft … until it happens to their company. The worst thing a small business can do is think of themselves as a small business. They must adopted a Big Business mentality.

Business identity theft takes different forms. What it comes down to is business information is stolen and used to initiate activities in your business’s name. 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.

9) There are 10 things that thieves know that business owner’s should know. Such as many businesses don’t always carefully scrutinize employee charge card billing statements before they are paid, particularly on accounts with multiple cards issued for it.

10) Ultimately the business could be lost because of identity theft.

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Angie Boecker provides this information, and more, in a 20 minute speech. In the full version of this training for businesses owners and key company personnel she expands on these 10 reasons and she covers:

• how information is stolen or compromised
• some risk reduction tips
• who the victims are and the impact identity theft has on the victims. Understanding who the victims are and the impact identity theft can have on them helps business owners start seeing the trends.
• Law enforcement and identity theft
• What to expect from the victims and how to assist them
• Laws that affect businesses- GLB – The Gramm-Leach-Bliley Act - HIPPA – Health Insurance Portability & Accountability Act- FCRA – Fair Credit Reporting Act- FACTA – Fair and Accurate Credit Transaction Act

In addition Angie provides training participants with a checklist of things the business owner needs to do when they leave the training.