We all have some level of awareness about identity theft through personal experience or the media.
Businesses are becoming an increasing target market for identity theft, with business identity theft up 100 percent in 2019 and estimated to have grown 258 percent so far in 2020 (according to Dun and Bradstreet).
Unfortunately, we can thank the COVID-19 pandemic for some of this increased fraud. The influx of funding opportunities in the form of government grants and loans has encouraged criminals to use their identity theft skills to take advantage of vulnerable businesses.
Identity theft occurs when someone gains access to your personal information, through either a breached email account or database, and then pretends to be you. Typically, the predator will open credit accounts in your name, for example, small retail credit card accounts or even a mortgage, and you won’t know this has happened until you apply for a loan and are denied or receive a call from a creditor.
Why is business identity theft so prevalent? Here are some of the top reasons:
- Businesses typically receive higher credit limits than individuals.
- Businesses do not have the same level of protection consumers have.
- With COVID-19, businesses have access to new financial opportunities.
- Dormant or closed businesses means fraud could go undetected.
- Unlike your personal information, most business information is publicly available.
What makes business fraud tempting? Business information is accessible through secretary of states’ websites, websites like Opencorporates.com, and professional networking sites like LinkedIn, and it is easy for the criminally minded to build a fairly accurate profile of a target business and its people.
With some simple forged documents, for example tax documents or updating false information with a Secretary of State’s office, it isn’t difficult to assume a business’ identity.
Sometimes criminals even rent fake office space, create websites, or use other tactics to make the business’ identity seem more legitimate. Business fraudsters have also taken the extra step to register with Dun and Bradstreet to get their 9-digit DUNS number, which is often what banks and other business’ use to verify identity and credit-worthiness.
So what can you do? Assuming your business is listed with Dun and Bradstreet (a free online business registration company), you can check your business’ credit via their Credit Signal (bit.ly/dnb-credit-signal). Their email alerts for changes in your business’ credit report, ratings, and scores could help as an indicator something is amiss.
If your business is asked to extend credit to another business, engage in the following ‘Five C’s of Fraud’ as recommended by Dunn & Bradstreet:
- Confirmation: Make sure the company or person truly exists.
- Condition: Check if the company has the hallmarks of a normal, functioning business.
- Consistency: Assess whether the stated facts about the business are consistent with other sources of information.
- Character: Discover whether any past issues could impose risks on the transaction.
- Continuity: Determine whether the company’s operational status has changed and might be posing new risks.
Help is Available Fighting Cyber Threats in Challenging Times`
Contact your local Wyoming Small Business Development Center (SBDC) Network adviser at wyomingsbdc.org if you need more cybersecurity tips, assistance from our government contracting team while navigating registrations and contracts, or advising on any business topic.
All Wyoming SBDC Network services are completely confidential and offered at no cost.
For the latest COVID-19 assistance, resources, news, and upcoming business assistance programming opportunities, visit our regularly updated COVID-19 Resources for Small Business page at wyomingsbdc.org/covid19.
Jim Drever is an SBDC regional director for Albany and Carbon counties. He can be reached at (307) 766-3505 or at email@example.com.