Is Your Business Safe From Identity Theft and Reputational Fraud?

Small business fraud doesn’t always mean a direct financial loss. Identity theft or reputational damage from online activity can also cause major damage to your credibility.

What is identity theft?

Identity theft happens when someone uses information about you without your permission. They could use your name and business address, credit card or bank account numbers to order products and services online, set up trading accounts with businesses, or even try to scam your vendors.
Identity thieves go after personal data including: 

• Credit card information and bank account numbers; 
• Name, date of birth and signature; 
• Mother’s maiden name (often used to verify your identity); 
• Online usernames and passwords; and 
• Business banking information.

Much of this information is already online. See how much data is available by looking at your social media accounts or conducting an internet search on your name. Some hackers may even go steal mail to find sensitive documents with payment information or invoices they can duplicate.

How can my business prevent identity theft?

There are a number of things you can do to reduce the chances of identity theft at your small business. 

• Create strong and unique passwords for all accounts; 
• Restrict access to sensitive information to vetted employees; 
• Use multi-factor authentication; 
• Always accept any updates to your computer system as often it includes anti-virus improvements; 
• Be wary of emails with misspelled common words, incorrect grammar or requests for copies of personal documents; 
• Be wary of emails claiming your computer system has a virus or threatening action if your business doesn’t pay overdue taxes; 
• Be wary of unexpected emails, or those from unfamiliar sources, that ask you to click on a link or open an attachment.

Another tip: Begin a cybersecurity training program for your employees to make sure everyone is working to protect your business from fraud.

How can my business reduce the risk of reputational damage?

Reputational risk is a threat to the brand of your business. Often starting on social media, reputational damage can spiral quickly.

What are examples of reputational risk?

•  Your business receives low ratings or negative comments from customers on their social media channels. 
• A business decides to launch a new product to market. In order to launch the product quickly, the usual quality testing processes aren't completed. The product gains a reputation for breaking easily, so sales and the business’s reputation drops. The product is relaunched having gone through a much more stringent quality testing process and is much higher quality, however sales don't improve as the brand is now viewed as cheap and unreliable. 
• Reputational risk can also occur due to events outside of your control, such as a hacker accessing all of your customers’ private information and publishing it online or a staff member handling a customer complaint poorly.

How can my business prevent reputational risk?

1. Protect against data breaches.

Make sure you back up data, secure devices and network, and encrypt important information.

2. Be vigilant about customer service mishaps.

Make sure you have customer service training for all of your employees to ensure they understand the importance of professionally (and successfully) dealing with complaints.

3. Ensure your hiring process contains thorough background checks.

Background checks and other pre-employment checks are a smart step to include in your hiring process.

4. Adopt core values into your business that your employee can get behind.

Pick four or five core values that you want your businesses to be governed by. Common values include diversity, accountability, innovation, passion, integrity and respect.

5. Have a 'crisis' communication plan.

If something does go wrong, you need to be prepared to respond quickly. Having a crisis communication plan specifically for your business is essential. It could be as simple as having a list of all potential risks with your planned response to address them listed.