Business identity theft occurs when a fraudster uses a company's identity to carry out fraudulent activities, such as obtaining credit, securing loans, or conducting illegal business transactions in the company's name. Criminals may steal sensitive business information, such as tax identification numbers, business registration details, or banking information, to impersonate the business. This can result in significant financial losses, damaged credit, and a tarnished reputation for the legitimate company.
Scammers may also file false business documents, redirect payments, or create fake invoices to deceive clients, vendors, or financial institutions. Often, the legitimate business may not be aware of the theft until they receive collection notices or notice suspicious transactions on their accounts.
Business identity theft can disrupt operations, lead to legal complications, and harm relationships with clients and vendors. To protect against business identity theft, companies should regularly monitor their financial accounts, secure sensitive business information, and verify any unexpected requests for credit or changes to their accounts.