Small Businesses and Identity Theft

How can small businesses be affected by identity theft? You might be surprised! Find out how to handle “identity theft” of your small business.

President Obama has pledged to help America “recover” from the current economic crisis. One of the many parts of the 2009 Stimulus Package; which can be found at the government website, is help for new small businesses. Obama has often argued for the importance of entrepreneurs and small businesses owners to the American economy.
As of May 2009, more small businesses are eligible for U.S. Small Business Administration backed loans. This mean broader access to the much needed start up capital for small businesses in this tough economy. At least temporarily, the SBA will recognize an alternate size standard for the 7(a) loan program. These changes are in effect until September 30, 2010. It is estimated that over 70,000 more small businesses could be eligible for SBA loans.
According to SBA Administrator Karen Mills, “This is just one more step we are taking to make sure small businesses have access to capital to keep their doors open and employees working during these tough economic times.”
These changes also make it possible for more small businesses to take advantage of benefits made possible through the Recovery Act that raised the guarantee on 7(a) loans to 90% and reduced fees for borrowers. Those Recovery Act changes were followed by an average weekly increase in 7(a) loan volume of 25%. This also made possible SBA loans by close to 450 lenders who had not made loans since October of 2008.
This is good news for small business owners and entrepreneurs interested in starting new businesses but small business owners and those starting new small businesses need to learn the facts about small business identity theft and identity theft prevention. These aren’t lessons that any business wants to learn the hard way.
While the majority of identity theft scams target individuals, businesses, and especially small businesses are also vulnerable targets.
Why would your small business be a target for identity theft?
According to a survey by security firm, McAffee, about 45% of small businesses believed that their business was to small to be a target for identity theft. But there are many reasons that identity thieves will target small businesses including:
-cash reserves
-good credit
-credit lines
-business credit cards
-computer networks
-business checking accounts
-even the company name and address
-a good reputation
One couple that owned a small transportation business was alerted that a criminal had passed forged checks carrying their company name and address. Since the account numbers did not match their accounts, the couple didn’t worry.
Unfortunately, after over $10,000 worth of checks with their company name and address were returned, they learned that the check verification companies like Telechek had blacklisted them.
The remedy to remove the blacklist included providing forms and a police report for each individual fraudulent check. The lesson here is to get concerned and take action right away, even if the money isn’t coming out of your account. Don’t let identity thieves steal your small businesses’ good name.
Businesses lose an estimated 50 billion dollars a year to identity theft. Small businesses may be even more vulnerable because they rely on local law enforcement to investigate and not all local law enforcement agencies are prepared to handle business identity theft. The FBI receives close to 300,000 complaints of suspicious activity per month and only investigates around 6,000.
Sometimes small businesses owners already feel like they do it all- the sales, the marketing, the accounting, the payroll and even in many cases the cleaning. In these tough economic times, small business owners may be getting some breaks from the federal government but identity thieves get more, not less active, during hard times so small business owners must also become identity theft watch dogs as well.