Protecting your business: simple and effective steps to prevent corporate identity theft
Identity theft is often seen as a crime that only affects individuals. However, businesses of all sizes, including sole proprietorships 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 time. The consequences of such crimes can be catastrophic and potentially lead to significant job losses. What measures can be taken to prevent corporate identity theft?
What is corporate identity theft?
Cybercriminals are becoming increasingly sophisticated in their tactics to infiltrate companies and organizations. While hacking industrial secrets and ransomware attacks are common methods, they are now using other techniques that target the weakest link in any computer network: people. By exploiting the human element, these cybercriminals can gain access to sensitive information and systems.
One of the most common consequences of these types of attacks is corporate identity theft, also known as corporate identity theft. Cybercriminals can gain access to some basic company information or spend time collecting data from key people to impersonate the company. This can result in financial loss, damage to the company’s reputation and even legal action. It is important that companies and organizations are vigilant in protecting their sensitive information and educate their employees on how to identify and prevent these types of attacks.
Why are companies often targeted?
One of the main reasons for identity theft in the business world is the amount of money involved. Companies often have a significant amount of cash, which criminals can easily reuse. For example, criminals can pose as a legitimate business and purchase goods in bulk, such as computers or other hardware, that can easily be resold for a profit. The criminal can do this without being noticed until it is too late, causing the legitimate business to suffer significant financial loss.
One of the reasons why large purchases made through 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 are less effective for businesses with large balances and frequent purchases. This makes it easier for criminals to make fraudulent purchases without being noticed, as these transactions are less likely to be flagged as suspicious by payment monitoring systems.
In general, businesses need to be vigilant and protect themselves against identity theft, such as implementing fraud detection mechanisms and regularly monitoring their financial transactions.
How they do it
What approach do identity thieves use when targeting businesses?
Change SIM card: Thieves can gain a foothold with this scam. All you have to do is call the mobile network provider to cancel a SIM card and transfer data to a new SIM card. Any two-factor authentication protection on corporate accounts sent by SMS can be intercepted.
Whaling: this is a form of phishing aimed at companies and organizations. We usually think of phishing as scams that target domestic institutions via home telephone or email. However, increasingly larger targets with a much larger potential windfall are being pursued. For example, fake emails, spoofing websites, and identity theft have been used to gain access to business accounts.
Business email compromise: This scam targets executives and employees dealing with finance and remittances and requires careful investigation by the cybercriminal. All it takes is to access 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, lawyers, high-level personnel or keyloggers.
Typical consequences of identity theft for a company
What happens when a company is hit by identity theft? Although this is seen by perpetrators as a ‘victimless crime’, it does not tell the whole story. Businesses affected by identity theft can struggle, resulting in:
- Alary lost: Loss of income may result in difficulty or inability to pay employees, contractors, stakeholders and partners. The consequences of this can often include layoffs.
- Tax disputes: Taxes can be prohibitively expensive. Alternatively, if a corporate identity is used to file a fraudulent return, the tax authorities will fine it.
- Lost reputation: Once hit by a corporate identity scam, it can be challenging to be taken seriously in the future. In addition, any crimes or underhanded behavior committed under the company’s name will be treated with contempt. As a result, the company could be destroyed.
Additionally, small business owners can be hit with personal liability. With typically smaller cybersecurity budgets, this could prove devastating.
How to reduce the impact of corporate identity theft
Dealing with corporate identity theft comes with many challenges.
1. Increase awareness
Easily accessible information such as revenues, profit margins, company details and tax numbers can be used to undermine a company’s identity. These details cannot be hidden or suppressed under normal circumstances, resulting in an attack vector that cannot be defended. The best solution here is to increase awareness at all levels, especially those that handle financially sensitive emails and logins.
2. Initiate and adhere to procedures
Corporate identity theft usually involves an email or phone call requesting the transfer of funds. Anything can happen once the system is breached. Therefore, initiating agreed upon procedures and protocols for money transfer is critical. This way you reduce the chance that a third party will siphon away valuable company funds.
3. Improve system access with biometrics
Biometric information can improve system security and add an additional level of authentication. While this may not reduce the number of spoofed emails requesting an urgent transfer, it can help reduce unauthorized access to a network system, for example from a third party illegally gaining access to a procurement system.
4. Reduce who has access to the wallet
Corporate identity theft often affects companies with huge budgets of numerous directors and senior staff. No one knows where the money is kept, but they all have access to it, with individual department budgets and free control over spending. Cybercriminals love confusion, and this is the perfect opportunity.
5. Check everything again
This is just as important for large companies as it is for small businesses. Ensure that every email, every phone call, and every banking and business transaction is made with a verified contact. Doing so can significantly reduce your exposure to identity theft. If it becomes too difficult, cybercriminals will focus on a new target.
Protect your colleagues against 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 data and trade secrets. If this information falls into the wrong hands, it could cause significant damage to the company and its employees.
The consequences of corporate identity theft can be far-reaching. Entire departments may have to be closed, operations may have to be halted, and in extreme cases the company may even collapse. It can also lead to loss of trust and damage to reputation, 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. Therefore, it is essential for companies to provide their employees with regular training and education on how to identify and avoid potential threats, and to implement strong security measures to prevent unauthorized access to sensitive information. A risk to everyone you work with, corporate identity theft can lead to entire departments being closed, operations being halted or even the complete collapse of a company. One wrong click on an unsolicited email can unravel everything.
Protecting against corporate identity theft is a collective effort, so be vigilant, take regular network security training, and encourage your colleagues to protect themselves and each other from suspicious emails and other phishing techniques.