Seven Ways to Protect Your Business From Identity Fraud

Here's a sobering thought for you: More than a third of British small firms have been targeted by identity fraudsters and suffered financial loss as a result. Maybe you were aware of the fact identity fraud is the fastest growing crime in the UK, but just thought it was one of those things that happened to other people.

Monday saw the start of National Identity Fraud Prevention week; a concerted effort to get businesses and households around the UK to tighten up their security measures. In corporate terms, ID fraud most commonly occurs in one of two forms: Impersonation and hijacking of a company.

Company impersonation sees fraudsters setting up their own company while posing as the owners of an existing business with good credit records. Once the illicit company is up and running under the guise of the legitimate one, the fraudsters can purchase supplies and goods on credit without ever paying and more often than not are able to avoid detection.

Criminals can also hijack companies by contacting Companies House and changing details such as the company's name or office address. Supply deliveries can then be re-directed to a new location and into the fraudsters hands.

In both cases, criminals only need a few details about a business and rely on getting in and out before anyone in the victim company, or the authorities, smells a rat. Fortunately there are a few straightforward measures any small business can take that will massively boost its anti-fraud defences:

• Keep your house in order: Many instances of ID fraud originate internally. Making sure your current/ potential employees are who they say they are is the first step to minimising the threat of an inside job. Check all CV references, qualifications and past employment thoroughly.
• Get registered: Companies House provides the Protected Online Filing Scheme (PROOF) to all businesses who register with them. The scheme is designed to stop firms from being hijacked by preventing fraudulent amendments to details such as change of particulars and annual return.
• Shred the paper trail: As obvious as it may seem, the safe disposal of sensitive company records is vital in preventing fraud. A paper shredder will ensure this with paper documents. Additionally CDs, DVDs and computer hard disks should be wiped before being thrown out, and old corporate uniforms destroyed.
• Keep checking: Get into the habit of regularly checking in with Companies House to make sure no changes have been made to your organisation's details. The sooner you know about fraudulent activity the sooner you can put a stop to it.
• Clean up after you: A clear-desk policy is an easy way to reduce ID theft and promotes a professional ethos.
• Relocating?: Inform all vendors and partners immediately if your company is moving offices. Ensure the Royal Mail redirect any correspondence addressed to the old premises for at least a year after moving.
• Make yourself heard: Remind your staff on a regular basis of the threat posed by fraud and ID theft. Lead by example and ensure everyone remains mindful of their responsibilities.