Company Alarm’s founder, Andy Pham, was paralyzed when realized his business had been stolen.
It was March 2017, and Andy had just received a foreclosure notice for a piece of property he and a group of investors had owned free and clear since 2005. How could this be? Andy wondered.
In a state of panic, Andy and his lawyer tried to piece together what had happened. Eventually, they realized someone had logged onto the Nevada Secretary of State’s online business portal, SilverFlume, and had filed a fraudulent business document removing Andy as the managing member of the company holding the $5 million parcel.
In that moment, Andy realized he had become a victim of business identity theft. But what should he do next? Andy didn’t know.
Indeed, most business people and even their lawyers are so unfamiliar with business identity theft that they’re perplexed how to respond when it’s suddenly staring them in the face. Do you contact the local police? The FBI? Do you call the bank? What do you do?
As the leader of the nation’s only dedicated law enforcement unit to business identity theft, I’ve sadly seen this story play out too many times to count. Here are the top 10 things experience has taught me that business owners should do when they realize they’ve become victims of business identity theft.
1. File a police report.
Most local police departments know nothing about business identity theft and won’t be interested in pursuing a criminal case on your behalf. But that shouldn’t stop you from immediately calling the police and filing a report.
Police reports are critical for starting a document trail establishing that you have been a victim of business identity theft. Once filed, you can use them to protect your business from creditors seeking to collect on debts racked up by fraudsters who took out loans in your business’s name.
2. File complaints with the Federal Trade Commission and the FBI.
Once again, you want to file these complaints to insulate your business from any fallout that may come as a result of actions scammers have taken in your name. Depending on the circumstances of your case, the FTC or the FBI might be interested in pursuing an investigation, especially if you have evidence that crimes occurred across state lines.
3. Contact Dun and Bradstreet.
D&B, the commercial credit reporting agency based out of New Jersey, is one of the few national institutions knowledgeable about business identity theft. Filing a complaint with them will also protect your business from creditors.
To file a complain with D&B, call 866-895-7262.
4. Check your credit report.
While you’re on the phone with D&B, ask them to run a credit check on your business, to see if anything the fraudsters did got attributed to it. If you find something on the report that you know you didn’t authorize, a D&B representative can direct you to their customer service help desk where you can dispute the charge or charges.
5. Contact your local Secretary of State office.
If your business has been hijacked, scammers most likely have filed fraudulent paperwork with your Secretary of State removing you as the managing member of the company. If that’s happened, you will want to contact Secretary of State to immediately change the company’s information back to its original state.
Likewise, you’ll want to notify the Secretary of State that your business identity has been stolen so its staff can (hopefully) monitor your company’s filings more closely and possibly even open an investigation into what happened. But don’t count on it – like most law enforcement departments, many secretaries of state can appear nonchalant or unmoved by your request citing legal or policy issue thus making it difficult to truly address business identity theft.
6. If possible, place password protections on your business name.
In some states, like Colorado where I live, the Secretary of State offers business people the option of establishing a password in order to file documents about your company. In Colorado, only about 8 percent of businesses take this option – but every business owner should.
If you’ve been a victim of business identity theft and you live in a state where this additional layer of protection is offered, immediately elect to take it. Password protections on your business filings are an excellent way to thwart business identity thieves.
7. Notify your business banker.
Your banker needs to know when your business has been stolen. He or she might be able to see if loans have been taken out in your businesses name, or money has been drained from your account, or you have been charged for unauthorized purchases.
More importantly, your banker can prospectively be on the lookout for any suspicious activity involving your business.
8. Closely monitor your mail.
You’ll want to watch out for any strange letters in the mail, including correspondence about new bank accounts, lines of credit or anything welcoming your business aboard to this new service or that.
Anything of that nature that is unfamiliar should set off red flags. Contact the sender immediately and get to the bottom of what happened.
9. Scan the web for fake websites using your business name.
A common scam business identity thieves employ is to steal a business and then create an entirely new website for that company to defraud customers. Even if you retake control of your hijacked business, you’ll want to make sure fraudsters aren’t continuing to operate under your company name, sullying your good reputation.
If you discover a fake website using your business name, file another police report and contact your attorney, who will need to immediately draft a cease and desist demand letter.
10. Purchase a subscription to Company Alarm.
Andy founded Company Alarm because, when he was a victim of business identity theft, he struggled to find anyone who could help him. Company Alarm is the only service on the market today offering real-time monitoring of your business filings with your local Secretary of State.
Our website is also a growing repository of authoritative information about business identity theft and other cybercrimes. If you find yourself suddenly faced with business identity theft, we will help you.
Company Alarm is dedicated to helping business owners protect what they have worked so hard to build. Our monitoring software is designed to prevent cybercriminals from exploiting loopholes to hijack your company and assets. To sign up for this low-cost, value-added protection, click here.