In response to cyber criminals' increasing attempts to steal business identities, fraud and risk management specialists NXG Strategies LLC and identity theft protection and recovery solutions provider Merchants Information Solutions Inc. teamed up to launch IDSafeBiz.
"We work strictly in the area of ID theft and breach mitigation for businesses, and we've seen a growing trend of business ID theft becoming more and more of a problem these days," said Sally King, Chief Operating Officer and Managing Partner of NXG. "So we challenged MIS to develop a solution for those businesses who find themselves victims of fraud and theft."
IDSafeBiz is designed for small businesses with up to 100 employees, but it is not a software solution. According to Jim Collard, Vice President of Operations for MIS, it is a resolution services agreement that offers personal assistance to any small business in the event of a breach. IDSafeBiz can be used by merchants, financial institutions, credit reporting agencies, medical associations, utility companies and federal, state and local government agencies.
"When a business identifies that it has been a victim of fraud or ID theft, it needs to contact their sponsor - their financial institution or bank - who will then report them as a victim," Collard said. "At that point, we'll reach out to them, remediate the fraud, review their business credit and D&B [Dun & Bradstreet Inc.] report for any suspicious activity and work to resolve it." MIS' Business Recovery Advocates are trained in business ID theft and fraud recovery and will research a company's identity fraud incidents and help prevent the misuse of its business name, tax identification number and other company identifiers.
"Small businesses have no idea how much risk they are under," said Mark Pribish, Vice President and ID Theft Practice Leader, MIS. "They are so focused on their bottom line they don't stop to think of those risks and how devastating they can be." He added that most of the smaller merchants and financial institutions don't have on-staff dedicated risk managers.
Pribish noted that federal, state and local regulations and laws have been in place for years to protect consumers from having their personal information shared or stored inappropriately, but no such regulations or laws exist to specifically protect businesses from having their identities stolen. NXG and MIS also work with local law enforcement agencies, providing case files to help police apprehend and prosecute fraudsters.
"It's much easier and more profitable for a thief to steal a business identity and commit fraud than it ever has been to steal consumers' identities," Collard said. Cyber thieves can steal a business' name, address and TIN, then apply for credit in that company's name, create bogus purchase orders, take over receivables and create fraudulent investment schemes.
"After that, it's easy to get consumers to come over and give me all their PIN numbers and logons, even bank account numbers, depending on the business I am targeting. It's amazing how simple it is to impersonate a business because so many people represent that business," Collard added.
NXG developed a proprietary business process to market IDSafeBiz as a viable service and implement it on a nationwide scale to keep costs down. The company also has no direct sales force. "We're going strictly through corporate sponsorships and through resellers that actually have relationships with corporate sponsors like financial institutions and payment processors," Collard said.
Russ Johnson, MIS' President and Chief Executive Officer, said IDSafeBiz can eliminate many of the costs associated with a breach and rectify deficiencies in ID theft protection required by the Fair and Accurate Credit Transactions Act of 2003 Red Flag Identity Theft Rules.
"Based on state breach notification laws, it can be very expensive to hire legal counsel and research specialists," Johnson said. "Our service minimizes exposure to risk; it maximizes a small business' response to regulatory requirements and protects both the business and owners before the fact rather than after it," Johnson said.
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