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Don't fall victim to corporate ID theft

04 November 2008

Increasing numbers of businesses are falling victim to identity theft, Shoosmiths has warned.

 According to figures released by life assistance firm CPP, the number of cases has risen by 154% in the past 18 months.

While most victims remain individuals, identity theft crimes against businesses have risen significantly.

But the national law firm said a remarkable 80% of companies still do not have policies in place for destroying sensitive material.

And Home Office figures put the cost of the problem to the UK economy to date at a staggering £1.7bn.

Associate and commercial litigation specialist Angela Ingram said: “Businesses that fall victim to ID theft will look at how it happened and how their details were obtained, and with increased reliance on websites, email and credit card transactions, there are more opportunities to divulge information about themselves and their customers. 

“But the problem is usually caused when staff inadvertently leak important records and information, rather than it being stolen.”

And she said 40% of businesses also risk customers' identity as well as their own when throwing away customer/employee information containing names, addresses and other means of identification

Ingram said: “Businesses owe a duty under the Data Protection Act to protect all customer and employee information, and could leave themselves exposed legally if they do not comply, and may be left to rue the day if poor policy increases their exposure to identity theft.

“Whilst the loss of sensitive data by large organisations such as Northern Rock and the Ministry of Defence attract most publicity, fraudsters are equally likely to take advantage of failings by much smaller businesses. For that reason, every business should take measures to protect its own, and individuals', information.”

Such measures might include:
• storing sensitive documentation with access limited to certain employees
• shredding unwanted customer and employee information
• setting new disposal policies for staff

Companies should also check their details at Companies House to ensure they are correct and have not been changed fraudulently.

But if it does all go wrong and a business finds itself a victim of identity theft, there are steps that can be taken by law firms on the victim's behalf, including:

• liaise with the Metropolitan Police to bring the matter to their attention, exchange information, and get their help in corresponding with third parties. For example, where a website or phone line is to be taken down, the police can provide confirmation that the website/line has been set up to assist fraudulent activity.

• where fraudsters can be traced, take action against them for losses suffered by victim businesses

• liaise with third party telephone and website providers to have fraudulent websites, email, telephone and fax numbers shut down and removed. Injunctions may be obtained as a means to force third party cooperation.

• where appropriate, correspond with Companies House to correct registered information changed by fraudsters; for example registered office and director details

• advise on preventative measures

For further information please contact:
Name: Alastair Gray
Phone: 08700 864096
Email: Alastair.Gray@shoosmiths.co.uk

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