As a small business owner, the risk of loss arising out of theft is something you are well aware of. You may have purchased insurance to protect yourself against the dangers of theft. However, there is one kind of theft that is lurking around all of us all the time. The sad part is we are very often blissfully unaware of the risks associated with another potentially serious and damaging theft, popularly known as “identity theft”.

Identity theft
photo credit: Clint Chilcott

Identity theft: The silent business killer

Yes, the most common type of identity theft is that of financial identity theft. In this form, criminals impersonate an individual’s identity to obtain money or goods. This can be extended to business identity theft where criminals clone your organization for financial gains. Another type of identity theft is called “Jackal fraud” this involves using a dead person’s passport or birth certificate.

The risks associated with losses incurred by business owners on account of identity theft and failure to dispose of information in an appropriate manner are many. Loss of critical information not only puts you but also your business at risk. With increasing unemployment particularly among the educated youth, financial information is worth a lot more if it ends up in the wrong hands. Illegal immigrants often use this route to make a quick buck.

Nearly three quarters of identity theft cases reported worldwide involve stolen bank or credit cards. The best way to handle this sort of theft is to report the loss of your card immediately. The bank will in turn freeze the card and ensure that no further transactions take place. Timely reporting of card losses is the best thing you can do to prevent the occurrence of fraudulent transactions.

The scale of identity theft is mind-boggling

In the UK alone identity theft costs more than 3.3 billion pounds every year. CIFAS (UK’s fraud prevention service) records 221,000 cases of identity fraud in 2013.

The damages caused by the theft makes recovery challenging. It usually takes victims of identity theft anything between 3-48 hours to unravel the damage caused by the theft. In a case of ‘total hijack’ involving 20-30 organisations, it can take a victim more than 200 hours to get everything back to normal. Imagine what if small businesses have to face such scale of identity theft. Going out of business is one of the logical next step for the victims.

It’s not all dull, though; the good news is, fraud levels decreased by 11 percent during 2013, thanks to the increased investments in fraud prevention systems, as reported by CIFAS. Hopefully, the Government will push more initiatives to protect businesses, small and large.

But relying solely on the Government is not ideal. You, as the business owner, need to take action. You need to be proactive in preventing identity theft, and keeping your identity safe should be your entire organisastion’s endeavour.

Shredded documents
photo credit: Bill Couch

Takeaway: Tips for helping you protecting your identity

Here are some tips to help you along the way – be sure to turn these into good habits:

  • Keep all documents relating to bank and financial information safely in one place
  • Shredding your confidential documents is mandatory. However, today, you need to do more than that. Use services offered by reputable companies, like TDS Safeguard, for secure document destruction.
  • Do not carry more documentation than what you need
  • Maintain confidentiality with regard to passwords and security information
  • Beware of cold callers
  • Destroy all non-essential mail
  • Do not open emails that come in from unidentified senders
  • Do not reply to unsolicited mails
  • Ensure that you empty your cache before proceeding with net banking transactions
  • Do not download information or software from unknown websites
  • Ensure that you have anti-spyware installed on your computers, laptops and mobile phones. Installation of firewalls and appropriate hardware/software goes a long way in this regard.