It’s bad enough if your personal identity is stolen. But for small-business owners, identity theft can also harm their companies.
Imagine a thief walking off not only with your personal credit card and bank account information, but also with your business credit cards and business bank account numbers. The level of havoc wreaked on your life could be double.
Although most people fear identity theft online, new research shows that paper-based identity theft is even more of a threat. That means you should take precautions in the real world as well as the virtual world.
“Identity theft continues to be a very serious threat. One in 23 adults will be victimized this year, with a total loss exceeding $50 billion. To prevent the misuse of our personal information, survey research shows we should be as safety-conscious in our home and office as we are on the Internet,” says Ken Hunter, President of the Council of Better Business Bureaus, Inc. (BBB).
The 2005 Identity Fraud Survey report, recently released by the BBB and Javelin Strategy & Research, showed some results that might surprise you. The survey found that the most frequently reported sources of information used to commit identity fraud are not computer-based. Other findings:
A lost or stolen wallet, checkbook or credit card was cited by almost 29 percent of the victims who knew how their personal information had been obtained
Eleven percent cited friends/acquaintances and relatives
Another 8 percent blamed corrupt employees with access to personal information
Computer crimes accounted for 11.6 percent of the perpetrator sources known by victims
Among cases where the perpetrator’s identity was known, half of all misuse of personal information was committed by a friend, family member, relative, neighbor or in-home employee
“Too often, we think of our home or office as a comfort zone, where we can let down our guard. Unfortunately, that is not the case with our personal information,” says Hunter.
The first step to protecting yourself and your business against identity fraud is to prevent the theft of information. Here are five things you can to do today:
Store records safely. Even in home offices, lock up sensitive records or rent a safe deposit box. Records you should keep out of reach include anything containing Social Security numbers, statements from financial service companies, checks and past tax returns. If you’re unsure about which records to put under lock and key, err on the side of caution.
If you receive checks in the mail from customers, remove your mail from your mailbox immediately. If you’re frequently away from your office when the mail arrives, rent a post office box.
When mailing checks to suppliers or invoices to customers, drop your letters in a Postal Service mailbox. Don’t leave them sitting for hours unattended in your home mailbox.
Before you give an employee access to business credit cards or to your bank account information, run a background on the employee. Bookkeepers have been known to embezzle. Employees have been known to run up credit card charges and then disappear.
Destroy sensitive information. Use a crosscut shredder that makes confetti out of your paper documents. Be sure you wipe clean your computer’s hard disk before you throw away or give away your old equipment.
After you’ve taken the necessary steps to protect access to your personal information, the BBB suggests you take preventive measures that will help you detect any unauthorized activity on your accounts.
“Our survey research found that a majority of identity fraud crimes are self-detected. And the losses were lower if the victim was using electronic review of their transactions, statements and credit reports to detect unauthorized access,” Hunter says.
Monitor account balances and activity at least weekly. Use e-mail account alerts to monitor transfers, payments, low balances and withdrawals. Consider moving to online statements and bill- paying.
“Of course, if you do bank online, take the necessary safety precautions. Place a password protection on your computer and your sensitive files. Ensure that your computer has a firewall to protect from Internet attacks. Install good anti-virus and anti-spyware software on your computer and regularly update it. And, keep the security features of your computer’s operating system current,” Hunter advises.
(Posted March 2005)
>>Back
to Focus Workshop
