The internet offers many advantages for businesses: it can be a useful tool for promoting your products or services, and is a great way to connect with prospective customers and leverage your image.
However, it’s also a prime platform for would-be scammers to pose as your brand. In this deep dive, we examine the effects of business identity theft and how to keep an eye out to protect yourself.
What is business identity theft?
Business identity theft, sometimes referred to as corporate identity theft, involves the illegal impersonation of a company or organisation. The victim may be any entity with an ABN or tax identitification, ranging from a sole trader or small business through to a large proprietary or multinational corporation.
Examples of business identity theft
The tactics used in business identity theft are constantly evolving as would-be thieves find new ways to impersonate a business to turn a profit.
Fake social media profiles
The name, logo or other identifying information of a brand or individual may be used to deceive the general public through social media posts, comments or direct messages, often encouraging the recipient to provide their financial details or other information. Thieves may attempt to tarnish the brand’s identity, and fake accounts may take days or weeks to be detected.
Impersonators may replicate your entire website, often with a similar URL. Fraudulent sites can surface in emails, social media campaigns or be listed in search engines.
Emails impersonating a brand’s identity can be sent to employees in an attempt to obtain sensitive company information such as financial statements or log in details. This can be used to open credit cards or take out loans in the company’s name.
Tax information abuse
Many companies publish their corporate documents online, and thieves can use this information to file false tax returns to claim a refund.
Bribery and ransom
If your business name or logo are not registered trademarks, then you may be at risk of business identity theft. Thieves can register your brand’s identity and hold them for ransom, demanding a bribe for the release of your business’ assets.
Thieves may not only impersonate your business to send invoices and claim payment, but they can also issue you with invoices from business partners or other organisations you work with.
Effects of business ID theft
All forms of business identity theft, no matter how small or large, can have significant implications to your brand. Here are some of the effects of business identity theft:
Your business’ reputation impacts your relationships with suppliers, customers and other organisations. If your identity is stolen, you may not always have the opportunity to rectify servered connections.
Loss of trust
Replica websites can lure customers into placing orders that they never receive. Fake social media profiles can also leave customers with a negative impression, causing them to turn to a competitor next time.
Business identity theft can impact profits when funds are stolen or the brand’s image is tarnished. Companies may struggle to pay employees or suppliers on time, and may be unable to meet their tax obligations.
You could be hit with hefty tax penalties and audits if a criminal has filed a fraudulent tax return using your business identity.
How to prevent business commercial identity theft
If you’ve fallen victim to business identity theft or you’re looking for ways to prevent it, it’s crucial to take immediate action.
Contact FraudWatch to learn about our business identity theft solutions and how your investment can protect your valuable assets.