Identity fraud is a B2B problem too
Thursday, August 6, 2020
Identity theft is typically associated with consumers– i.e. something that happens to people. However, less well known is the fact that businesses suffer from identity fraud too.
In fact, new figures from Dun and Bradstreet show that this is a growing issue. In the US in 2019 the organisation saw more than a 100 percent increase in business identity theft. For 2020, the company estimates an overall 258 percent spike in the crime. Already this year it has received over 4,700 tips and leads where business identity theft or malfeasance are suspected. It believes that the global pandemic is aiding and abetting business fraudsters as so many businesses are folding or sitting dormant giving organised gangs rich pickings.
B2B identity fraud is when a person or group of people run up unauthorised lines of credit in the names of businesses.
This is relatively easy. Common practice is that fraudsters look up business ownership records at Companies House. From there, they identify the officers and owners of the company and acquire their personal details using the dark web and other sources online.
To hijack the business, they then fabricate and modify a number of official documents tied to the business such as tax records and utility bills. The scammers then file phony documents with Companies House in the name of the business owners, but include a mailing address that they control. They also create email addresses and domain names that mimic the names of the owners and the company to make future credit applications appear more legitimate, and submit the listings to business search websites.
For both dormant and existing businesses, the fraudsters then attempt to create or modify the target company’s accounts at Dun & Bradstreet. Once the bogus profiles are approved the fraudsters can start applying for new lines of credit and go on a spending spree. Job done.
Usually, the first indication a victim has that they’ve been targeted is when the debt collection companies start calling. However, for many businesses it can take years to realise that they’ve been cloned meaning that often hundreds of thousands of pounds of debt has been run up in their name.
Covid-19 is also providing new opportunities for fraudsters who can now apply for furlough funding, assistance loans and false insurance claims in the names of the businesses that they have hijacked.
Identity fraud in general, both B2B and B2C, is a growing problem and it is critical therefore that organisations put processes in to place to protect themselves against being hijacked themselves and also against providing credit/products to their own customers that have had their identities stolen.