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Business identity theft on the rise

Date posted: 28.10.2015 | Author: Harry Bovensmann

Business identity theft was on the rise over the past year according to the 2015 Metrofile Information and Records Management Index. It is more lucrative for criminals to target businesses, rather than individuals, when it comes to perpetrating identity theft scams. South African businesses of all sizes must take note of these results and be more vigilant when it comes to storing and destroying documents containing personal information of customers and employees.

Furthermore, when respondents were asked whether they or someone they know has ever been a victim of business identity theft, 31% of the respondents said yes. This result increased by 12 percentage points year on year.

The most common form of business identity theft scams involve customers receiving letters with official company letterheads stating that their account details have changed and instructing the customer to make payments using these new details.  The scam comes to light when the business contacts the customer to establish why payments are not being made, only to discover the funds have been paid into the fraudulent account.

Identity theft scams can result in reputational, legal or financial damage for the business as the customer wonders how their details were obtained by the fraudster in the first place. Under the Protection of Personal Information Bill (Popi) businesses have a legal requirement to ensure the personal information of all stakeholders remains secure and once the regulator is appointed, the business could face fines of up to R10m or jail time.

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