How to Mitigate the Challenge of Cybersecurity Threats to Business Identity?

To protect both companies and their legitimate customers, Know Your Business (KYB) procedures and verification tools may detect instances of business identity theft. Commercial identity theft occurs when an individual or organization fraudulently obtains and uses the identity of another business. In the same way that personal information about an individual may be stolen, a company’s identity can also be stolen in this context. Let’s discover what is corporate identity theft and how companies can safeguard themselves.

Approaches to Business Identity Theft

Like other types of fraud, business identity theft is another significant challenge for businesses. Criminals may aim their attacks at companies’ sensitive data, such as tax IDs, bank account details, and trade secrets. The identity thieves then use the stolen data to create fake documents or accounts that seem official, allowing them to pose as the organization on the internet. Criminals may also fabricate a company or other business using the data they have stolen.

Using a stolen company name is a common tactic for perpetrators of financial crimes, including account opening, loan applications, transactions, and more. Since business transactions may be significantly more frequent and valuable than personal accounts, there is a likelihood for more substantial payments and an equal increase in risk.

Because of its more public nature, corporate data is easier for fraudsters to get than individually identifiable information. Since business identification and information authentication are complex and have different standards and formats across different locations, it might be difficult to discover false data.

Instances of Business Identity Theft

As would-be thieves come up with new ways to fool businesses into giving them money, the tactics utilized in commercial identity theft are always evolving.

1.    Possessed Social Media Accounts

To deceive people into giving over sensitive information, such as bank account details or social security numbers, imposters use well-known brands’ names, logos, or other identifying features in social media posts, comments, or direct messages. It might take days or weeks to detect fake accounts, and the brand could be the target of fraudsters who want to ruin its name.

2.    Phony Websites

It is nearly impossible for cybercriminals to replicate a whole website, even down to the URL. Various online marketing strategies might include connections to deceitful websites in their listings, emails, and social media efforts. These websites pose to be another business and deceive other organizations to make fake and illegitimate customers.

3.    Phishing Scams

Financial records, login passwords, and other important company information could be the target of phishing emails seeming to come from a well-known business. This may be used to apply for loans or credit cards under the company’s name.

How to Prevent Business Identity Theft?

A company’s credibility can take a significant hit in the event of business identity theft. The firm’s reputation and trust are undermined when fraudulent operations are carried out under its name, and the business may be held responsible for these consequences. The affected business may face unsavory financial and legal consequences, such as having to repay loans it disapproved of, defending itself in court, and covering the expenses of repairing its reputation and image.

Companies may lessen the likelihood of identity theft if they take precautions to secure customer data, monitor customer bank accounts closely, implement stringent verification processes, and educate employees about the risks. Should a business suspect or discover identity theft, it is its responsibility to inform the appropriate authorities, including credit bureaus and banking institutions. If taken promptly, the damage might be lessened.

How to Check Business Legitimacy?

Businesses, shops, and people may be more easily identified with the use of robust business verification at onboarding and at essential junctures subsequently. Inconsistencies or signs of fraud may be caught, and a complete view of the business can be obtained by stacking several levels of verification. One example is the availability of company data via registers. Here are the questions: Does the data match up? Is the listing for a real business or a fake one? Does it include any proof of the firm’s legitimacy? It is not uncommon for con artists to insert a fake listing into legitimate business records.

Strategies to cross-reference and validate company data from many sources provide more reassurance and data validation. Modernized approaches to due diligence include:

  • Obtaining official company documents via registration in order to verify data
  • Identifying an entity’s UBOs by verifying their Know Your Customer (KYC) details
  • Cheating on UBO and firm names with money laundering watchlists

Final Words

Confirming a company’s identity used to be a slow, costly, and low-tech operation. Nevertheless, the authentication process may include human and optimized business verification, and several operations can now be automated. Decisions about business identity theft may be made with confidence and speed using an integrated approach that incorporates several authentication capabilities, information sources, risks, and fraud signals.