Identity Theft: Protecting Your Business

Businesses are just as susceptible to identity theft as private individuals. According to the Colorado Secretary of State, reports of business identity theft have been on the rise in recent months. But there are steps you can take to safeguard your business and be vigilant against any fraudulent activity. 

The best place to start is by signing up for Secure Business Filing through the Office of the Secretary of State, which protects your business records via password protection.

How does Secure Business Filing work?

Once enabled, Secure Business Filing allows businesses to designate an email and password that provides access to their official state records. This prevents fraudulent documents from being filed without the business owner’s (or designated agent’s) knowledge. Additionally, businesses will be notified via email of any activity on the account.

Existing businesses simply need to search for their business name or ID in the state registry to initiate the process. New businesses will have the option to enable the feature when registering with the state. (Note that Secure Business Filing is per business entity, not business owner, so if you own multiple companies you’ll need to set passwords for each entity separately.)

Multiple authorized users are allowed per account, and businesses can revoke access for individual users at any time.

What exactly is “business identity theft?”

Criminals can hack an existing business by changing its information (name, address, registered agents, etc.) or by creating an entirely new business using an existing business address or name. 

In either scenario, criminals can open lines of credit with financial institutions or retailers, and then use that credit to purchase items they later sell for cash. This can result in a business being denied credit, suffering from a damaged credit rating, or having problems with government agencies like the IRS.

What else can I do to protect my business?

As with personal identity theft, there are a number of preventative measures you can take to protect your business’ name and credit. 

Start with the Colorado Secretary of State:

1. Designate someone you trust to be responsible for maintaining and monitoring your business record.
2. Verify your business details on the Colorado Secretary of State website and enable Secure Business Filing.
3. Set calendar reminders for renewal and reporting dates so that you’re never late.
4. Report changes to address, registered agents, or anything else pertinent as soon as possible.
5. If you terminate or dissolve your business, report it on the Secretary of State website as soon as possible – but stay subscribed in case anything on the record changes.

Other helpful tips:

1. Add a security strategy to your business plan and designate a top-level manager to implement that plan if you become a victim.
2. Always protect your EIN (employer identification number), business account numbers and any personal information.
3. Maintain an inventory of important documents in a safe, secure location.
4. Use a confetti-style shredder when disposing of documents.
5. Do not share sensitive information online. If you must, make sure “https” is part of the URL.
6. Provide a secure area for employees to store personal items while working, and treat employee information as carefully as your business records.
7. Use strong passwords and multi-factor authentication where possible.
8. Avoid creating master users who have complete access to all of a business’s sensitive information.
9. Report any lost or stolen credit cards immediately, as well as any suspicious bill or account activity to the institution involved.

What should I do if my business identity has been stolen?

First, don’t panic. Resolving business identity theft is a time-consuming process. If you suspect your business identity has been compromised, immediately report your concerns to the Colorado Secretary of State. You should also check your business information record and correct any unauthorized changes, as well as notify the CBI Identity Theft Unit. 

More resources and checklists to help businesses prevent and recover from identity theft are available through the Secretary of State’s office, along with phone numbers and websites you’ll need if your business is victimized.

We can help you protect your business.

Contact Hackstaff, Snow, Atkinson & Griess today to find out how we can keep your business and intellectual property safe. Our knowledgeable attorneys can help you develop policies and advise you on the best practices to keep your business secure.