Protect Your Small Business From Credit Card Fraud & Identity Theft
As a small business owner, your life is busy. Whether you have employees or not, it can feel like a host of problems fall to you for solving. Because of this, your company’s security often falls on your list of priorities.
Protecting your business needs to be a top concern. If it isn’t, you leave yourself and your business at risk. That risk can mean loss of both time and money, especially if you catch the attention of criminals and hackers. People are looking for the opportunity to steal your company credit card, and even its identity. Not only can this create a major headache in the future, it could prevent your company from being financially flexible when you need it.
Table of Contents
Small Business Identity Theft
Did you know that your business’ identity could be stolen, just like anybody else? Identity theft has become the top profit crime, according to the US department of Justice because it is a low risk but high reward crime.
What’s truly frightening though is that, unlike consumers, most of the information a criminal would need to impersonate your business can be acquired legally and for a low cost. With the normal consumer and identity theft, identification information like social security numbers are protected. Similar information for company’s, like a business ID number or sales tax number, are openly available on public records. For example, anybody can purchase a company’s credit report that contains tons of identifying information.
With that information, criminals can then impersonate the business and try to profit off of it. That includes opening up lines of credit or securing credit cards in the company’s name, or even getting access to the company’s bank accounts. Often, things like business credit cards and accounts are easy to open as banks are eager to do work with businesses because they often spend more than a singular consumer. That means less scrutiny and security to make sure a person is actually with the business.
Criminals like to target businesses because their credit limits are typically much higher than a single person. While a person’s identity could get them a credit card with a $1000 limit, a business could secure up to $10,000 to $50,000.
Protecting Your Business From Identity Theft
While huge amounts of information is publicly available,that doesn’t mean you don’t need to focus on security. Protecting your business from data breaches is essential to preventing identity theft. The more information a criminal has, the easier it is to fool others. Have all sensitive information, online and offline, protected at all times.
Next, set-up alerts and actively monitor both your existing accounts and your company’s credit reports. That way, if something seems wrong, you can catch it early and prevent further harm. Establish protocols in your company for who can open company credit cards, has access to financial accounts, and how they report their activities to the business. One thing criminals hope for is that a company just assumes that strange activity is the work of an employee and not look into it.
Small Business Credit Card Fraud
Unlike identity theft, credit card fraud is when a criminal gets ahold of a company credit card, physically or digitally, and starts making purchases. They don’t open up a new card, they use an existing one. Remember, businesses often get very high credit limits on cards, so having a card stolen could mean a major payday for a criminal.
Preventing Credit Card Fraud
It all starts with what kind of credit card you get for your business. Each credit card provider has their own rules and securities for their cards, so you need to choose one that is right for your needs. Lowering the chance of fraud needs to be a deciding factor with who you choose.
Utilize all of the security features on the card you choose. Some, you can require a person to show ID when making a purchase to ensure the name matches the cardholder. Others limit purchases to specific websites or zip codes. Certain cards even call the cardholder after a purchase for an extra authorization.
Next, educate anybody at the company with access to a company card on shopping with it securely. Teach them what kinds of websites to avoid, protocols for where the card stays when not being used, and how to spot scenarios where a card can get stolen. If you are afraid of giving employees access to a card, consider simply reimbursing them for purchases made.
Finally, monitor purchases used on company cards. Fraud isn’t limited to outside criminals. Employees and card holders could do credit card fraud by making personal and unauthorized purchases. Don’t just trust your employees, make sure everything purchased with a company card is legitimately for the business.
What to Do If You Suspect Identity or Credit Card Theft
If you think that your company has fallen victim to identity theft or credit card fraud, it’s time to delve into your records. If you suspect identity theft, start with your company’s credit reports.
Contact the major credit bureaus and get credit reports. Then, pour over them and see if there is any inaccurate information. Inaccuracies, especially those around credit cards and loans can be a sign of identity theft. If this is the case, contact all of the credit bureaus and put a freeze on your credit. Then, contact institutions that have open lines of credit and close those you didn’t open.
Credit card fraud means closely monitoring your credit card records and bills. Matchup whose credit cards made what purchases, and see if there are any unaccounted for transactions. It’s also smart to gather up all of the cards physically, to make sure none are missing. If you find that your card has been stolen, cancel them immediately and get new ones sent.
Prevention can go a long way to protecting your company’s identity and assets, but sometimes, you just fall victim to criminals. Actively monitoring your records and doing what you can to prevent theft can make sure you catch a problem early on.
Image Source: https://depositphotos.com/
Ben Allen is a freelance content creator and digital marketer who believes in helping small businesses succeed. He spends his free time bragging about his two daughters, eating stuffed crust pizza, and playing video games.
This post was updated December 11, 2017. It was originally published November 29, 2017.