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What is identity theft? How to prevent and report it

New IdentityTheft Scam

Identity theft definition 

Identity theft is the use of someone else’s personal information without permission, typically to conduct financial transactions. By personal information, we mean data that institutions use to identify or recognize you: your social security number, your bank account number, your address history, and so forth.

These sorts of data points are in theory private but in practice can often be discovered in a variety of ways by a dedicated identity thief, who can then either access your own accounts or open new ones in your name. The latter practice can be particularly pernicious: with just your social security number, identity thieves can take out loans or credit cards that they never pay off — and the resulting damage to your credit rating can be very difficult to undo.

While identity theft is a very old crime, in many ways it is a defining problem of our modern digital age, in which your personal information can easily be exposed online due to your own negligence or the poor security practices of companies you do business with, and so much of your financial life rides on the accuracy of your credit rating. The damage can be mitigated, but it’s better to prevent the theft in the first place.

Impact of identity theft on business

Identity theft is most often associated with the act of stealing an individual’s identity. But as Mitt Romney once famously said, “corporations are people, my friend,” and businesses have all the sorts of “personal” data — tax ID numbers and bank accounts, for instance — that individuals have, which can be stolen and abused. We’re not talking about security breaches or employees misusing corporate assets here; we’re talking about an identity thief pretending to be someone within a company who has the authority to make financial transactions, just like they might pretend to be another individual.

In fact, a business may be an even more tempting target for an identity thief than an individual because businesses have high credit limits, substantial bank accounts, and make big payments to vendors on a regular basis. The consequences can be dire, particularly for small businesses where the founder’s or owner’s finances are deeply entangled with the company’s.

Before we move on, we should take note of a couple of ways that even the theft of individuals’ identities can affect businesses. For instance, one of the most pernicious effects of identity theft is just how much time victims have to spend calling credit agencies and financial institutions to resolve the issue; a recent study found that victims can take up to 175 hours to set everything straight — and because they need to make these calls during business hours, if your employees are victims, that happens on company time. In addition, if an identity thief makes a purchase from your business with a stolen or fraudulent credit card, the victim will generally be recompensated by the credit card company — who may then attempt to claw the money back from your company, a dynamic exploited under the name of “friendly fraud.”

Copyright © 2020 IDG Communications, Inc.

Source: on 2020-09-28 05:56:15

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