Business Identity Theft: What Is It and Tips to Prevent It

The internet offers a multitude of advantages for businesses. Entrepreneurs can use it to promote their products or connect with prospects. While technology is advancing rapidly, it has also allowed fraudsters to find innovative ways to scam people and businesses.

 

FraudTrac wants consumers and businesses worldwide to remain safe from all kinds of scams. Let’s dive deep to examine the impact of business identity theft and ways to keep an eye out to protect your business from the nuisance.

What’s Business Identity Theft?

Business or corporate identity theft involves the unlawful impersonation of an organization. The victim could be any type of business with a tax identification, ranging from small businesses to individual proprietorships to multinational corporations.

 

According to data from PwC, business identity theft has increased drastically over the past year; nearly 46% of businesses worldwide have experienced fraud of some type in the past two years. Scammers carry out impersonation attacks on businesses to make illegal profits from a renowned brand’s success, leaving the victims with damaging repercussions.

 

In today’s world, it’s indispensable for business owners to take prompt action when they suspect identity theft. The first step is knowing the different tactics cybercriminals use to steal corporate identity information, their consequences, and what can be done against it.

Tactic #1- Counterfeit Social Media Accounts

Scammers create fake social media accounts with images, logos, names, or other identifying information of brands, persons, and businesses for fraudulent purposes. Sometimes the newly created accounts go undetected. Infringers disguised with stolen identities often exploit these visibility timeframes to target potential clients with fake campaigns.

Tactic #2- Look-alike Sites

Impersonators also sometimes replicate the complete design of well-established corporate websites. People unknowingly come across these duplicitous websites through emails, social media campaigns, and search engines.

Tactic #3- Phishing Emails

Implementing a brand’s name or logo in emails sent to employees is another way fraudsters access the company’s personal or financial information. Malware is sent through phishing emails that enable cybercriminals to use the information for financial frauds, such as obtaining credit cards, loans, or credit lines in the company’s name.

Tactic #4- Tax Information Abuse

Cybercriminals sometimes use the information published by companies online to get details about their business license number, sales tax number, and so on. Identity thieves use stolen company information to file fraudulent tax returns for refunds.

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The Grave Impact of Corporate Identity Theft

Business identity theft can potentially harm any brand’s reputation. Since reputation is one of the most crucial fragile assets of any company, being targeted by identity thieves can change the way business partners, creditors, and customers perceive your brand dramatically. It leads to significant dents in profit margins.

Loss of clientele trust can also result from the trap of fake websites people end up buying from. When customers don’t receive the products they paid for or aren’t satisfied with the quality or customer service, they’re left deflated from the unpleasant experience. This may make them opt for another brand next time. Complicated tax disputes and loss of financial revenues are also common occurrences businesses face because of identity theft.

How to Prevent Business Identity Theft?

With hundreds of companies falling victim to business identity theft leading to costly outcomes, the goal is to take prompt action. If you’re an entrepreneur, protect your reputation from tarnishing by registering your business on the online digital directory for scam watchers.

FraudTrac’s fraud tracker is used by customers to verify whether a local business is trustworthy. It helps improve online reputation, maximize consumer base, build positive public relations, boost brand awareness, gain more traffic, and connect with current and prospective customers looking for high-authority business listings.

If you’re a consumer who has experienced fraud, Partner with us to promptly report malicious activities, consumer fraud, pension scams, credit card frauds, auto dealer frauds, and more. You can also find business profiles at our online scam tracker website to verify whether the company is authentic or in the market to scam people.

Report online fraud and file scam reports via FraudTrac to help us fight fraud!

 

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