Have you ever heard of corporate identity theft? While most people understand the basis of identity theft, when it's applied on a corporate level, the stakes are raised. The victim company stands to lose a considerable amount of money as well as a reputation. Their loss of revenue can later translate into higher prices for certain goods or services, which will affect customers across the board. Although corporate identity theft may not be an immediate concern for most people, the effects of this fraud can easily carry over into the marketplace.

How does Corporate Identity Theft Happen?

Generally, corporate identity theft happens in one of two ways. The criminals can use the identity of the company to steal company-controlled funds or the thieves can use the company name to steal from their customer base. In the first instance, the theft occurs when a criminal uncovers the corporation's identity, namely case-sensitive bank account numbers and passwords.

With this information, unlawful withdrawals or payroll checks can release large sums of money to the thief. In the second case, corporate identity theft occurs when someone uses your company name to lure customers. The thief may set up a phony web site, that looks very much like the legitimate one, and then "sells" the real company's products or services.

In this way, the criminal gains additional personal information from the victimized customers, as they give out their credit card or bank account numbers. Stealing a corporation's identity may also take the form of a larger type of theft. The thief may use the company's identity to receive a line of credit or to make large purchases.

Besides the financial aspect of this crime, the company's good credit history may be destroyed. It's a disturbing fact that many money-lending institutions don't properly screen the applicant and therefore do not verify if the person actually is a legitimate representative from the company.

How can Corporate Identity Theft be Stopped?

The first thing is to be aware that it can happen to your company. Knowing that your business may be vulnerable is a good step toward recognizing the situation. Corporations should regularly monitor their credit history. Get a report listing all transactions made in the company's name.

Carefully compare this statement with your own records and if there are any discrepancies, report it immediately to the credit institution. Check to make sure this credit report isn't listing any "authorized" employees that you have not approved. Keep case-sensitive account numbers limited to only a few trusted employees. Corporate identity theft doesn't have to happen to you.