We often hear about issues with personal identity theft, and the havoc it can wreak on your credit and reputation. Less discussed, though, is small business identity theft, and how it can affect your company. Here are five things business owners need to know.
Small businesses are liable for their bank accounts
If someone steals money out of your personal account, chances are your bank is going to cover that. But if a small business account gets drained, small business owners are on their own.
Banks typically won’t cover these types of losses. Sometimes, a computer crime endorsement on your business insurance policy is available, and may cover some of your losses. With nearly all banks offering online access to account information, experts recommend you regularly monitor your accounts.
Most hacks take a year or more to discover
In nearly all cases, it’s going to take over a year for a business owner to discover they’ve been hacked. Too many business owners take the stance of “wait and see,” assuming if they don’t see anything wrong, everything’s okay.
The fact is, nearly all hacks targeting small companies are stealthy – the truly effective ones don’t announce their presence.
Security assessments don’t find human mistakes
In many cases, the security assessment process is broken. Consider this example: A government contractor is working remotely at a coffee shop. The user left his system to visit the restroom, leaving his screen visible.
The confidential information, accessed through a secure VPN, was open and accessible while he was away. Assessments don’t find these kinds of breaches, although they happen every day.
The good stuff is in the trash
Hacking can be low tech, too. Someone ravaging through a trash receptacle outside your office can use unshredded documents, mail, and other items to convince banks and other creditors that they are the legitimate business owner.
Once the bank is on board, criminals can take out loans and open other accounts using the business owner’s identity.
60% of identity theft happens at the small business level
Studies show that more than 60% of identity theft cases involve a small company or small company owner.
Fifty percent of these hacked companies will go out of business either from the financial damage done by the theft, or the disclosure and negative publicity once they disclose the breach (which is something they most likely will have to do, particularly if the breach involves credit card or health information). If you don’t disclose it and the media gets word – the damage to your business’ reputation multiplies.