By now, we have all heard the warnings about identity theft. If you are not a victim yourself, you most likely know someone who has had to do battle with their own credit report. Well, now the worse news and a huge word of caution: Entrepreneurs are more than 50% more likely to the victim of identity fraud than the average consumer. Yes, 50, you read that correctly.
According to an article published today by Kate Rogers on Bloomberg Business Week, citing Javelin Strategy & Research's 2011 Small Business Owners Identity Fraud Report, a staggering $8 million of fraud took place in 2010 alone against small businesses and their owners. The article highlights some of the areas that make us entrepreneurs so susceptible to fraud. If you see yourself in any of the following, listen up:
*Tend to be smaller firms, with fewer accounting controls in place
*Tend to use online banking and purchasing with stored card accounts
*Tend to use common passwords among employees, share passwords, or have easily detected passwords
*Do not tend to maintain the most up to date software for viruses and spy ware
*Tend to have open wireless networks, allow guests access to wi-fi, and use unsecured wi-fi when travelling
While thieves tend to take the same amount from businesses as they do from consumers by transaction or case, the time and cost differential for small businesses to clean up the mess is a staggering 150% with non-recoverable legal fees paid out of pocket making up the bulk of costs. There are steps you can take, many of which are simply inversions of the statements above. For additional insight and VERY solid tips, please read the full article by Ms. Rogers on BBW.
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