The Dismal Impact Of ID Theft

Jul 28, 2021

Although identity theft should be mitigated via prevention and protection strategies, there will be times where it cannot be avoided. Personal information can be easily snatched by accessing a computer illegally. Even if you are cautious and guard your information, it is critical that you keep a close eye on your business financial accounts. 

How Identity Theft Impacts A Business

When one hears the phrase “identity theft”, what usually comes to mind is the act of stealing someone’s identity. Unfortunately, as Mitt Romney famously said, “corporations are people, my friend,” business are the designated keepers of personal information. This includes bank accounts and tax ID numbers. In the hands of the wrong people, this sensitive information can be stolen and abused.  This can include an identity thief posing as someone in the company as the one who has authority to make financial decisions. 

Businesses are also a desirable target for identity theft since these types of organizations tend to have higher credit limits. They also possess sizable bank accounts, allowing them to make substantial payments to their vendors on a steady basis. The consequences of this attack would be greatly felt by a small business owner, whose finances are deeply immersed within the company. 

The theft of an individual’s identity can also wreak havoc within the business. One of the most destructive consequences of identity theft is the sheer amount of time needed to call credit agencies and financial institutions in order to straighten things out. 

A study conducted by Ponemon Institute LLC revealed that victims of identity theft had to take an average of 175 hours of company time in order to resolve their identity theft cases. Keep in mind that these issues can only be resolved during the week and during office hours. When divided by 8 daily working hours, this results in roughly 21 days where the employee is unproductive. 

Furthermore, if an identity thief purchases an item from your business, using a stolen credit card, the owner of that card will be reimbursed that amount, once reported. This same victim may turn around and try to get that money back from your company, by way of friendly fraud

More Elaborate Schemes

Identity thieves have gone so far as to disguise themselves as a business. One way thieves approach this is by monitoring a business’s registration information. If the company forgets to renew its license or registration by the deadline, thieves will pounce in, pay a small fee and renew these for them. But, they will also take the liberty to change the company’s contact information and board of directors. This will show on official documents that the thieves are now the ones running the business. 

Another destructive scam that they can take part in is “address mirroring.” Here, the identity thieves will set up an office or a mailing address in the same building as the target business. This will create confusion and the thief will initiate contact with the victim’s vendors and banks. 

The Best Course Of Action Is Protection

Without question, a business must be armed with the right protective mechanisms to ensure or at least minimize the possibility of identity theft. 

Some of the steps you can take now to protect your business include: monitoring your credit, freezing your credit if you suspect unusual activity, monitoring your financial statements, and practicing good online hygiene by using strong passwords.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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