“Identity theft is a huge issue right now,” says Nancy Stachnik, vice president, retail marketing manager at MB Financial Bank in Chicago. Defined as the act of deliberately assuming another person’s identity, identity theft is a crime that finds crooks rummaging through garbage cans to find old bank and credit card statements, stealing personal information in computer databases, and thieving information from organizations that store large quantities of personal information.
On the Internet, identity theft frequently takes place through e-mail, with schemes like “phishing” taking hold when an unsuspecting consumer or business owner gives out sensitive information to a party that looks or sounds like a legitimate firm, such as a bank or government agency. “They try to get you to give up personal information,” says Stachnik, a past victim of identity theft herself, “and it’s difficult to tell which are legitimate, and which are not.”
Smart Business spoke with Stachnik about what companies can do to protect themselves and their employees from identity theft scandals.
Why do businesses need to be concerned with identity theft?
Identity theft is one of the fastest-growing consumer crimes, and it applies to businesses as well. The indirect effects can be particularly damaging. Take for example the firm that accepts a credit card from someone who is using a stolen card, or someone who is impersonating another individual. Not only does the victim feel the negative effects, but the business also does. The crimes aren’t always computer based, nor do they have to take place in the online world. In fact, most of the identity theft that’s out there right now happens in decidedly low-tech environments, like mailboxes and garbage cans. Regardless of where it takes place, the fact that it’s a growing problem for both consumers and businesses makes it a problem that shouldn’t be ignored.
How can a business protect itself from identity theft?
A business has to protect its information just as closely as a consumer does. Tax identification numbers, for example, need to be guarded carefully and should only be released under controlled access. Credit card statements should be reviewed on a regular, and timely basis to ensure that they match up with actual receipts. If you’re using a business debit card, you’ll want to compare them to your bank statements to make sure that there are no unapproved charges on them. If your bank provides check images, check through them to ensure that no one has hijacked your checking account number. And remember that vigilance is your best weapon against criminals who will use Tax ID numbers, account numbers and other means of stealing identities and using them illegally.
Businesses also need to be vigilant in protecting their own records and those of their customers from identity theft. You don’t want people going through your trash and stealing information. Shredding, rather than just throwing away, sensitive documents is one way to ensure that they don’t get what they’re looking for. Guarding customer records is equally as important, since your company’s livelihood relies on their repeat business.
What other strategies should a company consider in its attempt to thwart identity theft?
The best defense is to have controls in place to protect any and all critical information. A trusted employee or colleague who has access to important passwords, for example and who is given autonomy in signing important documents could at some point turn dishonest and use that information to steal from the company. Business owners need to remain extremely vigilant, and not let their guard down, when it comes to protecting critical information and monitoring the types of reporting that would unveil a fraud right up front. A large sale to a new customer, for example, may turn out to be a fraud if that customer is using a stolen identity to make the purchase. To avoid falling prey to these schemes, be sure to check identification and credit before getting too enthusiastic over the size of an order.
Where can a business go for help with these issues?
There is quite a bit of information available online, as well as in other media, to help consumers and businesses protect themselves and respond accordingly to identity theft. There’s also a lot of resource material available for victims, or those who are trying to head off being a victim. There are also a couple of Web sites that serve businesses of all sizes to ensure they are not victimized by identity theft, such as The Identity Theft Center (www.idtheftcenter.org/busrisktest.shtml).
Will we see more identity theft schemes in the future?
This isn’t going away, and it’s something that we’re going to have to learn to live with. As companies do more business online and more business internationally, the risk of falling victim to identity theft will certainly rise. And while banks, credit card networks and other institutions scramble to put measures in place to deal with it, it’s ultimately up to the business to make sure that its own sensitive information is protected. It’s another cost of doing business.
NANCY STACHNIK is retail marketing manager at MB Financial in Chicago. Reach her at (888) 422-6562 or firstname.lastname@example.org