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Small Businesses And Identity Theft - A Dangerous Combination
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Small Businesses And Identity Theft - A Dangerous Combination

This week in California, the Identity Theft Council, which is a nonprofit organization that deals with the combating of identity theft as well as raising awareness for those would-be victims, issued a warning that small businesses and identity theft are becoming more closely related in the country. They stated that small business owners really need to pay more attention to the issue. The costs and and threats are very real.

Javelin Strategy and Research, which is a leading research agency in the realm of global financial services, estimated that an astonishing $8 billion is lost every single year due to identity theft. Two-thirds of this cost is absorbed by banks and other small businesses, while the rest of the cost affects the victims directly.

Small Businesses Make Up the Majority Of All Businesses

Of the 27 million small businesses in United States alone 21 million of those are owned by single person through sole proprietorships. These small businesses are ideal targets because they don't have the security measures that the larger businesses can afford. If you're a small business owner, it's very important that you keep your security up to date as well as understand the risks and the threats that are posed by criminals looking to defraud you or your customers.

One major way that small businesses are targeted is if they run a website which stores customer information. You need to be extremely careful about how that information is actually stored. If you're not a computer expert yourself, you should hire professional companies who know all about security to lock down all passwords, credit card numbers, addresses and any other personally identifiable information.

The main reason for this is that if your database gets attacked by criminal hackers, then they will be able to use that information to potentially hack into your customers e-mail accounts or bank information. From that, their accounts can be drained using a variety of financial fraud methods.

Hackers Target Small and Large Businesses Alike

Once a customer discovers that you, the small business owner, were the source of the leaked information, you have lost the trust of that client, and they're not likely to come back to you. In fact, earlier this year, Sony was attacked by criminals around the world looking to gain access to free video games as well as the database of over 75 million customers worldwide, leading to countless cases of identity theft.

Because of this breach of security, Sony lost a lot of trust within the gaming community as well as a lot of potential new customers. As a small business owner, you not only need to closely monitor your financial statements if you're not doing so already, you also need to get make sure that your employees do not have access to customer records unless you can trust them 100%. Try to keep as much of a barrier between your clients' records and your employees as possible, otherwise the temptation of theft will present itself. It's tough to think of your employees as potential criminals, but it's always better to be prepared than to deal with the aftermath of a data breach.


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