Identity theft is a global epidemic afflicting millions of consumers every year. But consumers aren’t the only entities at risk. So are businesses, including financial advisors of all types. Here’s a case in point.
According to the California Department of Insurance, Eugene Shy-Ren Hsu, 31, was arrested in December 2013 and charged with using another agent’s identity to obtain a credit card. He also used that identity to apply for life insurance policies without consumer knowledge, netting tens of thousands of dollars in bogus commissions.
Investigators say Hsu placed a phony craigslist recruitment ad seeking help from three life insurance agents with rolling over an “incredibly large” block of business. The ad promised “zero cold calling, zero driving, zero hard closing/hard selling.” An unsuspecting agent applied for the position, providing his Department of Insurance license number. Using that number, Hsu collected more than $16,000 in fraudulent commissions. In addition, he used the agent’s identity to obtain a credit card with GE Money Bank, charging close to $4,000 in order to cover insurance premium charges and other expenses.
Don’t let this happen to you. Take steps to protect your key business identifiers. Here are some tips from BusinessIdentityTheft.org to keep yourself safe.
Treat and protect your business EIN / TIN as you would your own Social Security number.
There are many circumstances under which a business EIN must be provided, such as business bank accounts, tax and wage reporting, W-9 forms, etc. However, be aware that thieves can commit numerous fraud schemes with only your business name, address, and EIN.
Keep all documents containing business information or business identifiers in a safe, secure location not accessible by unauthorized persons.
Be certain to protect and secure hardcopy documents that contain business identifiers, account numbers, and other sensitive information at all times. This includes employee workspaces, public access areas, waste and shred receptacles, filing cabinets, and any other locations where these documents may be found. Be aware of all persons capable of viewing or accessing these documents (authorized or not), including clients and customers, visitors, contractors, cleaning crew personnel, etc.
Securely shred old or unnecessary documents that contain your business information or business identifiers.
Shred any old or unnecessary documents containing business license numbers, business registrations, EIN / TIN, account numbers, etc. using a cross-cut, confetti cut, or diamond cut shredder, or utilize the services of a secure document destruction company. Any documents waiting to be shredded should be placed in a secure locking receptacle.
Be certain to file your annual reports and renewals on time.
In addition to the risk of administrative dissolution of your company for failure to file, business identity thieves will often target companies that are classified as inactive, suspended, in default, etc. The thieves quite logically assume that, if a business doesn't keep up with its basic quarterly or annual business filings, the owners probably won't realize the information has been changed until it is too late.
For further information about business identity theft, visit BusinessIdentityTheft.org, a site maintained by the Identity Theft Protection Association and the National Association of Secretaries of State (NASS).