Safeguarding your business: simple and effective steps to mitigate corporate identity theft

Identity theft is often thought of as a crime that only affects individuals. However, businesses of all sizes, including sole traders and large corporations, are also at risk. Corporate identity theft is becoming increasingly common, with scammers conducting thorough research on their targets before striking at the right moment. The consequences of such crimes can be catastrophic and potentially result in significant job losses. So, what measures can be taken to combat corporate identity theft?

What is corporate identity theft?

Cybercriminals are becoming increasingly sophisticated in their tactics to infiltrate corporations and organizations. While hacking for industrial secrets and ransomware attacks are common methods, they are now using other techniques that target the weakest link in every computer network: people. By exploiting the human element, these cybercriminals are able to gain access to sensitive information and systems. 

One of the most common outcomes of this type of attack is corporate identity theft, also known as business identity theft. Cybercriminals can gain access to a few basic company details or spend time mining data from key individuals in order to impersonate the company. This can result in financial loss, damage to the company’s reputation, and even legal action. It’s important for corporations and organizations to be vigilant in protecting their sensitive information and educating their employees on how to identify and prevent these types of attacks.

Why are businesses often targeted?

One of the main reasons for identity theft in the business world is the amount of money involved. Businesses often have a significant amount of cash at their disposal, which criminals can easily repurpose. For example, criminals can pose as a legitimate company and purchase goods in bulk, such as computers or other hardware, which can easily be resold for profit. The criminal can do this without being detected until it is too late, leaving the legitimate company with a significant financial loss.

One of the reasons why large purchases made under a company account are more susceptible to fraud is that they are less likely to be treated with suspicion. Automated payment monitoring services can help individuals avoid credit fraud, but they are less effective for corporations with huge balances and regular purchasing. This makes it easier for criminals to make fraudulent purchases without being detected, as these transactions are less likely to be flagged as suspicious by payment monitoring systems.

Overall, businesses need to be vigilant and protect themselves from identity theft, such as implementing fraud detection mechanisms and regularly monitoring their financial transactions.

How they do it

What approaches do identity thieves use when targeting corporations?

SIM card swapping: thieves can gain a foothold using this scam. All it requires is to call the mobile network provider to cancel a SIM card and transfer data to a new SIM. Any two-factor authentication protection on corporate accounts sent by SMS can be intercepted.

Whaling: this is a form of phishing targeted at businesses and organizations. We usually think of phishing as a scam targeted at domestic settings over the home phone or email. However, larger targets with a far more significant potential windfall are increasingly pursued. For example, fake emails, spoofing websites, and identity theft have been used to access business accounts.

Business Email Compromise: targeting executives and employees concerned with finance and wire transfers, this scam requires careful research by the cybercriminal. All it needs is to gain access to an email account and arrange the diversion of funds under the auspices of an “urgent” payment or transfer. Successful execution can involve phishing and impersonating CEOs, attorneys, high-level personnel, or keyloggers.

 Typical effects of identity theft on a business 

What happens when a business is struck by identity theft? While seen as a “victimless crime” by the perpetrators, this doesn’t tell the whole story. Businesses hit by the identity theft can struggle, resulting in:

• Lost alary: loss of income can result in difficulty or inability to pay employees, contractors, stakeholders, and partners. The fallout from this can often be redundancies.
• Tax disputes: tax may be unaffordable. Alternatively, if a business identity is used to file a fraudulent return, the tax department will penalize it.
• Lost reputation: once hit by a business identity scam, it can be challenging to be taken seriously in the future. Further, any crimes or underhanded behavior carried out under the business’s name will be treated with disdain. As a result, the company could be destroyed.

Further, small business owners can be hit by personal liability. With typically smaller cybersecurity budgets, this can prove devastating.

How to reduce the impact of corporate identity theft

Dealing with corporate identity theft brings many challenges.

1. Increase awareness

Easily accessible information such as revenues, profit margins, company records, and tax IDs can be used to subvert a company’s identity. These details cannot be hidden or suppressed in usual circumstances, resulting in an attack vector that cannot be defended. The best solution here is to increase awareness at all levels, particularly those that handle financially sensitive emails and logins.

2. Initiate procedures and stick to them

Corporate identity theft typically involves an email or phone call requesting the transfer of funds. Anything can happen once the system is breached, which is why initiating agreed procedures and protocols for monetary transfer is vital. This way, you reduce the likelihood of a third-party diverting valuable company funds.

3. Enhance system access with biometrics 

Biometric information can step up system security and add an extra level of authentication. While this may not reduce faked emails demanding an urgent transfer, it can help reduce unauthorized access to a network system, e.g., from a third party illegally accessing a procurement system.

4. Reduce who has access to the purse strings

Corporate identity theft often affects businesses with vast budgets across countless directors and senior personnel. No one knows where the money is kept, but they all have access to it, with individual departmental budgets and free rein on spending. Cybercriminals love confusion, and this is the perfect opportunity. 

5. Double-check everything

This is as important for giant corporations as it is for small businesses. Ensure that every email, phone conversation, and bank and business transaction is made with a verified contact. Doing so can considerably reduce exposure to corporate identity theft. Make things too tricky, and cybercriminals will move on to a new target.

Protect your colleagues from corporate identity theft

Corporate identity theft is a serious risk that can have devastating consequences for any business. It involves the theft of a company’s identity, often through the use of fake emails or other fraudulent means, with the aim of stealing sensitive information such as financial data, customer records, and trade secrets. If this information falls into the wrong hands, it can cause significant harm to the company and its employees.

The consequences of corporate identity theft can be far-reaching. Entire departments may need to be shut down, operations may need to be paused, and in extreme cases, the company may even collapse. It can also result in loss of trust and reputation damage, which can be difficult to recover from.

It’s important to remember that protecting against corporate identity theft is not just the responsibility of the IT department. It requires a group effort from all employees, as one wrong click on an unsolicited email can unravel everything. This is why it’s essential for companies to provide regular training and education to their employees on how to identify and avoid potential threats, as well as implementing strong security measures to prevent any unauthorized access to sensitive information.A risk to everyone you work with, corporate identity theft could result in entire departments being closed, operations pausing, or even the complete collapse of a business. One wrong click on an unsolicited email can unravel everything.

Protection against corporate identity theft is a group effort, so be vigilant, attend regular network security training, and encourage your colleagues to protect themselves and each other from suspicious emails and other phishing techniques.

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