Small Business Identity Theft: How to Protect Yourself

As if small business owners don't have enough to worry about as it is, the identity thieves in this world have to add just one more flame to the circus of obstacles in the way of entrepreneurial success. Sadly, small business identity theft and phishing scams are a major problem for small business that hardly anyone ever talks about and worse yet, the law hardly recognizes.

There were approximately 8.9 business owners that were affected by such schemes with an estimated $50 billion in losses last year alone.

The problem is that small business owners are more susceptible to the scams and thievery because they are small. Most of their resources are being poured into so many other aspects of the business, that it is difficult to spend any more time or money on something else - such as identity protection, and the thieves bank on that. But don't let this get you down. There are a few things you can do to protect your business from having the thieves take advantage of it.

For starters, if you are a home based business, chances are that you receive all kinds of mail for credit cards and other offers. Thieves look out for this. Rather than steal the credit card offers of private individuals, it is better to steel from a business because the credit lines are oftentimes much higher for a business owner (the adage you need money to make money). Make sure you are getting your mail right away. Some people are lazy and let it sit in their mailbox - sometimes even overnight.

Get to know your area and your neighbors. If there is something suspicious, report it. When throwing away those credit card offers, make sure that you are shredding the information to destroy any potential theft. The same goes for people who work in shared office buildings and other such complexes. You can also go the distance and attempt to do some research into how to get your name off of mailing lists.

As far as important paper documents, keep those items stored in a safe with a lock that only you have access to. If you are a business owner with employees, make sure that your employees do not have access to this information. All it takes is one bad egg to spoil everything, and while it sounds overly cynical you can't trust anyone when it comes to your business's identity.

In California, if someone steals your identity and then runs up a bunch of charges, if the loss is under $10,000, many investigators won't even pursue it because they have so many other claims to deal with. To make matters worse, many states don't even recognize identity theft as something that could occur to a business because it is defined legally as a crime that happens to an individual. Ten-thousand dollars may seem like chump change to larger businesses, but for start-ups that could be the difference between growth and closure.

If you are a sole proprietor, you are putting yourself out there because there's no distinction between you and your business. Thus, if your business's identity is stolen, you will have to pay for whatever losses occur - not the business. If you are an LLC or Incorporated, then the law recognizes the distinction between the person and the business, which means the business's assets are separate from your own.

If you fall victim to identity theft and law enforcement is basically saying they can't do anything, experts suggest you follow the paper trail and pursue the case yourself as much as possible so that you can take the evidence back to police to get the issue resolved.

Having your identity stolen takes a lot of time and emotional stress, and the same can be said for when a business loses its identity. Take care to protect both yourself and your business by being smart about sensitive information and always have your guard up.