Business identity theft has become one of the most prominent challenges for companies over time. Fraudsters use several tactics, such as impersonation attacks on businesses, and try to get a profit by exploiting their brand reputation and success. This eventually leads to severe damage to business reputation and financial losses.
There was a dramatic rise in the use of digital payment methods and a decline in face-to-face consumer contacts as governments throughout the world implemented stay-at-home orders and other steps to contain the virus. Cybercriminals exploited the increase in digital transactions. Even if cybercrime is becoming more common, there are cutting-edge safeguards that can keep your company and personal information safe.
What Is Business Identity Theft?
The term business identity theft refers to the practice of criminals unlawfully obtaining sensitive information, such as a company’s license number, social security number, credit card number, or PIN, by taking advantage of security flaws. They then apply for loans and other services that involve opening lines of credit using this information.
While some forms of business identity theft have been around for a while (e.g. impersonating a legitimate company to get personal info, or digging through garbage to find financial documents), cybercriminals may get far more sensitive information and it’s far more difficult to prevent online identity theft.
Unfortunately, most of us are now familiar with the common warning signs, such as bills from unknown service providers, rogue accounts opened in our name, or unusual transactions on business bank statements. The goal of each of these strategies is to let fraudsters access accounts that are susceptible to their attacks.
How Business Identity Theft Impacts Businesses?
Corporate identity theft is an unfortunate but ever-present danger to organizations. Nearly half of the companies surveyed have dealt with some kind of economic crime in the last year, including fraud, business identity theft, and various other crimes.
Severe consequences for businesses may result from these incidents. The percentage of organizations reporting fraud incidents with a financial effect exceeds losses of millions. Furthermore, new dangers keep cropping up. To provide only one example, since COVID-19 altered trade patterns, supply chain fraud has increased.
Companies of all sizes also suffer greatly from tax fraud, money laundering, theft of intellectual property (IP), unlawful trade, and misappropriation of assets.
Challenges Companies Face Due to Business Identity Theft
When it comes to safeguarding your perimeter, knowing the kinds of business identity theft that fraudsters use to attack organizations is crucial:
- Financial Information Theft
A prevalent kind of cybercrime is financial identity theft, in which a criminal gets access to a company’s financial information and uses it to open new accounts, loans, and services in their victim’s name.
- Tax Information Theft
False tax returns submitted for the purpose of obtaining a refund constitute tax identity theft.
- Identity Cloning
Cybercriminals engage in identity cloning when they unlawfully acquire personal information in order to masquerade as a victim and hide their own identity.
- Social Media Identity Theft
A kind of identity theft known as “social media identity theft” involves impersonating a person or company’s social media accounts in order to trick their online acquaintances and friends.
- Synthetic Identity Theft
In synthetic identity theft, the perpetrator uses both genuine and fraudulent information, such as a social security number and a license number, to establish a new identity and avoid detection by anti-fraud systems.
In Summary
More and more companies are relying on business verification services to help prevent fraud. These services help to verify the identity of individuals and businesses, as well as provide background checks and credit reports. Corporate verification service providers have made it easier, safer, and more secure to sign, notarize, and save documents by connecting users with data that is accessible 24/7. Companies make sure that they are secure and protected from the risk of business identity theft.
