According to the Bureau of Justice Statistics, identity theft affects more than 17 million Americans each year. Financially and reputationally, a company can suffer the same damage as a person when identity theft occurs. Also, unlike with individuals, a targeted attack on a corporation has the potential to jeopardize the livelihood of many others who depend on the company for their own survival. Here are some of the best measures you can take to protect your company from identity theft fraud and keep your hard-earned reputation intact.
Have An EIN Number
A freelancer or small business owner can use their Social Security number to file taxes as a sole proprietor even if they employ other people, in contrast to a corporation or limited liability firm, which must have its own EIN.
What is an EIN number? EIN stands for employer identification number, and although you don’t have to have one, as mentioned above, it makes sense to organize one, and it’s actually highly recommended for sole owners because it helps you keep your financial accounts separate from those of the business.
Why is this important? It’s because separating corporate and personal funds helps reduce the risk of fraud and identity theft. That safeguards the owner of the company because your personal information won’t be linked to the company in the event of identity theft. Plus, when you have an EIN, it’s much easier to apply for a company credit card, which will help you keep your business and personal funds separate.
You don’t have to give everyone in the business access to every piece of data and document that is made. Putting limits on access makes a lot of sense, especially when it comes to identity theft or employees who are leaving and aren’t happy with the company. Whether your data is physical or digital, make sure that you need usernames and passwords to access it. This way, you will always know who did what and when.
Educate Employees About Cybercrime
Starting from the top down is the best way to learn about fraud protection and cybersecurity. Once you have internal controls in place, the next step is to teach your employees about cyber threats and fraud, including what they do and how they do it.
Some of the most important things to teach to stop identity theft are how to use business protocols, how to spot fraud, how to manage passwords, how to browse the internet safely, how to avoid phishing emails, and how to report cyberattacks.
Have Good Internal Controls
It is crucial to password-protect or otherwise limit employee access to sensitive files like client lists and financial records, as we mentioned above. However, in the event of a data breach, you should have a clear process in place, stating who will be responsible for handling the breach and what steps will be taken.
Mail theft is a popular and easy way for thieves to gain access to a company’s sensitive data. Mail such as bank and credit card accounts, bills, and human resources information can be used to attack businesses and their customers. Theft of mail can be prevented by simply not allowing any more mail to be delivered.
Although most organizations cannot go totally paperless, converting to electronic delivery of financial statements takes only a few minutes and plugs a critical security hole. With today’s advanced technology, electronic statements are more secure than paper ones. In addition to helping prevent identity theft at your company, moving to paperless bookkeeping and billing procedures can yield significant cost savings, and it’s better for the environment, which is something customers are very keen to see.
Regularly Check Your Business Accounts
Take a look at your company’s financial records, paperwork, credit reports, and supplier details. In this manner, you can keep an eye out for any unusual behavior on your company credit cards, such as unauthorized updates, withdrawals, or charges that could potentially hurt your credit score.
Email alert notifications can be set up to be sent from your account’s monitoring systems, allowing you to receive instantaneous notice of any action occurring across your company’s accounts.
Take Care Of Your Social Media Accounts
Anyone who wants to steal your business identity might be very interested in your social media passwords. A social platform could be used to reach out to all kinds of clients and customers, but it could also be used to post negative or hurtful things that could potentially harm your reputation. Make sure that passwords are kept safe and that only a small number of people know them.