Home > Business Scams > Business Identity Theft: What is it and How Can I Avoid It?

Business Identity Theft: What is it and How Can I Avoid It?

By: Sarah Clark (ILEX) - Updated: 31 Jan 2013 | comments*Discuss
 
Scam Business Fraud Business Identity

We’ve all heard the scare stories about identity theft – sales of home shredding machines have risen since the issues have been highlighted, and we’re all getting savvier about protecting our personal data, passwords and important documents. But how does this advice translate to businesses?

What is Business Identity Theft?

Business Identity theft is exactly the same in essence as personal identity theft, although in some cases the amounts of fraud involved can understandably be that much higher. A Business Identity Theft happens when scammers get hold of enough information about you and/or your business to be able take on your business identity and use it to get hold of credit, goods and services. It’s a widespread fraud and one that all small businesses (and large ones) need to be sure that they take steps to avoid.

Personal Information Security

To scam-proof your business, it’s vital to set a security policy that’s adhered to at all times by yourself and your employees. Have a set of strict guidelines in place that set out the types of personal information that must never be revealed, especially by e-mail or electronic communication.

Basic rules include:

  • Always keep the personal details of employees or the businesses financial details out of emails.
  • Be suspicious of any e-mails from sources you don’t recognise – and have a good spam filter in place.
  • Never open attachments, or click links in e-mails from people you don’t know.
  • Make sure that you report any suspicious emails to the appropriate authorities - Trading Standards, Business Link or in some cases the police.
If a fraudster can get hold of enough information about your business, they could obtain a corporate credit or debit card and spend your money without you knowing about it – so all of these measures are vital parts of your staff training.

Company Hijacking Scams

In recent years, scammers have worked out how to get hold of complete corporate identities – the scam is called' company hijacking' and it’s a serious fraud which is said to cost an estimated £50 million a year. The reason that fraudsters manage to get hold of this information is because businesses are able to get forms from Companies House that change important details about a business, including the registered address, the company secretary or director.

As you can imagine, if this happens to your business it can lead to some pretty horrendous problems, when the newly appointed ‘directors’ of your business apply to open new bank accounts, run up overdrafts and credit in your business name, or have goods delivered to the ‘new’ business address. It can leave your business with debts, and a ruined credit rating.

There is a way that this sort of scam can be avoided, and that’s by using the Companies House Protected Online Filing (PROOF) electronic filing scheme. You can find out more information about this from the Companies House website.Frighteningly, Companies House says of the 500,000 paper documents each month, around 50 are fraudulent. They simply don’t have the manpower to be able to check every change of personnel or address with the previous company secretary, so when these forms are lodged, even by fraudsters, they are taken at face value.

The Latest Business Identity Scam

As if that didn’t make it hard enough, it’s also been reported that recently scammers have been calling businesses, posing as officials from Companies House to ask them to verify their passwords. As any Internet savvy individual knows, you much never ever give out password details over the telephone, and no reputable organisation would ever ask you to do so. The same applies if you receive an e-mail asking you to ‘log in’ to the site using a link contained in the e-mail. This is Phishing and is exactly the same as the Phishing e-mails that are sent from bogus banks asking you to log in.

Companies House state that they never contact companies by telephone asking for passwords or similar information.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • Wmy
    Re: Vishing Scam
    AEAC0155408 has been used here in Nigeria to scam my sister. Please be careful.
    16 July 2018
  • WomenHelpingWomen
    Re: Scammed by a Holiday Romance?
    Hi, I work for a women's magazine weekly and we are trying to raise awareness during the time of travel so no more women fall as…
    5 July 2018
  • Le Tissier Pearson
    Re: Vishing Scam
    Scam messages can be a nuisance and the fraudsters can go to jail.
    22 June 2018
  • eggreig
    Re: Sky TV Scam
    Just had a call from a lady could hardly understand her but she said I was due a refund but didn't believe her it was a mobile number 07158655859
    19 June 2018
  • dai
    Re: Sky TV Scam
    had a call today,could hardly understand her . due a refund from sky caller no 01212023289 which could pass for a birmingham no.. sort it out sky!!
    5 June 2018
  • Mr.R.Hillman
    Re: Mystery Shopper Scam
    Unfortunately,I,also fell for the "mystery shopper" routine!I gave my address.if I get a did cheque in the post I shall inform my bank and…
    8 May 2018
  • aroldee
    Re: Safe Travel Gigolos
    I met Sammy, a 43 year old charming spiritualist man who like smiling with very sharp eyes. He usually like to stand or pose with one leg at…
    29 September 2017
  • Underestimated4sure
    Re: Safe Travel Gigolos
    You definitely have to be very aware of these gigolos. In the end it cost me a little less than $200 cash but most of all my health and the…
    27 September 2017
  • Jack Jones
    Re: Builder's Scams
    Northumberland Trading Standards and Northumbria Police failed to take any action against a builder who was preying on elderly and vulnerable…
    15 September 2017
  • norman
    Re: Sky TV Scam
    just had a indian rang us on 0777657349 to tel us we have a problem with our box but as we do not have sky this must be a con
    25 July 2017