Identity theft or identity fraud occurs when a person or organisations’ information is stolen and usually imitated online or used to purchase goods. It is a type of cyber crime used to gain a personal financial advantage or to gain access to expensive services. Fraudsters are as much of a threat to personal data as they are to businesses, and action should be taken in the workplace to secure employee details and prevent the leakage of account information. Corporate identity theft may occur where an offender impersonates the organisation by creating a fake website and forging invoices.
Fraudulent activity can result from people stealing personal information like credit cards from a wallet, accessing accounts online or finding tax or credit card statements at an organisation. Common causes of fraud include falling prey to scams such as those in emails or phone calls, not properly disposing of bank statements, posting too many personal details on social media and creating strong passwords for key accounts.
There are numerous kinds of fraud that may occur according to The Balance, and some of the things that can be stolen in addition to bank accounts include national insurance numbers and letters sent to old business headquarters. Criminals may also provide stolen information to the police instead of their own when they are caught for a certain crime.
It is first detected by discovering a payment on an invoice or statement that is unaccounted for by anyone in the organisation or by the account holder if it is a personal account. In a business setting, this can also take the form of multiple unsolicited loan applications. Once this has been noticed, the damage may have already been done and the situation could take a considerable amount of time to fix.
Consequences of Identity Theft
If fraudsters have access to personal or company information, they can successfully:
- Purchase goods in your personal or organisation’s name creating huge debts
- Imitate organisations or people online
- Open bank accounts linked with your personal business
- Purchase and gain access to important ID documents like passports
- Ask for more credit or bill business partners for services which they haven’t purchased
If you or your business are victims of identity theft, the ability of the company to generate revenue is jeopardised. Huge debts may also be accumulated in the short term if the fraudster purchases goods on your accounts.
However, this crime also has considerable long-term impacts that have the potential to permanently damage an organisation. Brands and reputations could be damaged if the perpetrator publishes questionable content on things like social media sites and the fake website. This means that hundreds of hours of work (between 200-600) has to be spent restoring identities, securing online information and sorting out the accounts. Not only this, credit scores will be affected meaning an individual may be refused a loan, or an organisation may lose investors due to lack of financial security.
Every precaution should be taken to secure from all types of fraud, including most crucially checking financial accounts regularly. This is especially important for organisations, as the nature of transactions is kept secretive, so fraud can go undetected for a considerable amount of time. As Cathay Bank states the consequences of fraud can linger for a very long time or subside very quickly, and so “the longer the inaccurate information goes uncorrected, the longer it will take to resolve the problem”.
If a particular party is found guilty of this charge, they can face heavy fines, imprisonment or be ordered to pay compensation to make-up for an organisations’ losses.