With evolving technologies and increasingly sophisticated hackers, problems like identity theft, credit fraud, data breaches, and other sensitive information leakages are occurring more frequently and sometimes on a large scale. Recently, Equifax, one of the three largest credit-reporting agencies in the country, suffered a data breach in which the names, social security numbers, birthdates, addresses, and drivers’ license numbers of 143 million Americans were exposed.
Whether or not your small business has been a part of a data breach, there are steps you can take to protect your company’s and your customers’ sensitive personal information. When sharing your personal information with another individual or company, ask questions about the use and purpose of supplying that information. Some important questions to ask are:
- Why is the information needed?
- How will it be used?
- What steps are being taken to protect it?
- What happens if I choose not to share the information?
If you are a small business storing information regarding your customers, you should save and dispose of both yours and your customer’s information securely, along with sustaining a secure network on computers and other electronic devices for safekeeping.
In recent years, the proliferation of online commerce has increased the risk and frequency of data breaches. Besides properly wiping computer systems and mobile devices of all information when disposing of them, it’s important to use strong passwords and encrypt your data. Encrypting data means that your browser is deemed secure for online transactions by scrambling information sent via the Internet. On the status bar of your browser, you can check for a small “lock” icon, signaling encryption. Be sure to install the correct safety software as well. These include anti-virus software, anti-spy software, and a firewall. Avoid phishing emails by averting emails, with links, files, or downloadable software from senders you don’t know. These can often lead to a virus overtaking your computer and capturing your passwords. The use of public wireless networks is also a cause for concern, when transmitting personal information, a secure network is always ideal.
Keeping your information secure is crucial because of the effect it has on your credit. While you do have a business credit score, which impacts the ability to be granted a small business loan, your personal credit is often more important to lenders. Most lenders believe that your personal credit score accurately reflects the way you handle money and therefore indicates the way your business’s financials will be managed. If you suffer from a low credit score due to identity theft, you can submit a letter with your loan application explaining your financial deficiency and discuss the measures you’ve taken to prevent it from occurring again.
It is also in your business’s best interest to protect the information of its customers. Failing to do so will ultimately cost you in the form of time spent by your employees notifying victims of the breach, along with malware removal, and any legal costs if the business is found negligent.
If you are concerned you may be a victim of identity theft or feel that someone has gained access to your credit information, you can place a freeze on your credit report. The purpose of this security freeze is to disallow thieves to open new accounts in your name. The credit freeze has no impact on your credit score.
The Fair Credit Reporting Act instructs the three largest credit-reporting agencies nationwide – Equifax, Experian and TransUnion – to offer a free credit report once a year upon request. This information will help you understand your likelihood of being able to obtain a loan, finance major purchases, and buy insurance. Checking your credit report will also help you detect identity theft as soon as it happens. Ordering your free credit report is a strong opportunity for criminals to pose as credit companies and scam you into sharing your personal information to the wrong individual. With that, be on the look out for imposter websites, and only order your free credit report from authorized and entitled companies on annualcreditreport.com.