You may think it’s just a matter of untangling the mess – difficult but doable. However, you may face consequences far beyond just letting everyone know that it really wasn’t you or your business. Here are 5 of the toughest consequences you could face.
1. You Can’t Pay Your Bills – or Your Employees. If money has been taken out of your banking account or if you lose business because of the theft, you may find that you can’t continue business as usual. You may have to implement layoffs. You might have to cut purchases and expenses across the board. You may end up incurring personal losses if you are forced to use your personal assets, savings or credit to try and save your business.
2. You may be Responsible Personally. Many business agreements from loans to credit cards and lines of credit require a personal guarantee. If the business can’t pay these debts, the person – the owner – become personally responsible for them. The situation can be bleak – the business may not be operating at a profit because of the identity theft so the owner is facing the lack of income and the creditors at the same time.
3. Your Credit Rating is Hurt. Business debt that is not being repaid on time – even if that debt was incurred fraudulently – may hurt the credit rating of both the business and the guarantor. If personal accounts also become late because of the reduced income, that’s another hit. You may find yourself with reduced credit and higher interest rates – not to mention not being able to secure new credit.
4. The Tax Man Cometh. One example, an identity thief creates false “withholding”. He or she files for a refund and the tax man shows up to ask why your business hadn’t paid in their share. If the thief fraudulently transacts business, in your name you can end up trying to unravel the “unpaid” sales tax that the state is trying to collect. Working through it all is not easy. It can be very complex and it can take great amounts of time.
5. Your Business Fails. The truth is that many small businesses cannot recover from identity theft. A full 30% of all business failures come from employee theft alone – think how much more damage a professional identity thief can cause. Simply, a business may not be able to withstand the loss of funds, the loss of credit and the negative consequences of identity theft. You could have to shut your doors.
Business identity theft is growing. You need to protect your business in every possible way and you may find there is one type of company who can help you meet all those requirements – a shredding company. Look for one that will offer onsite shredding so you know your sensitive documents are completely destroyed before your eyes. You’ll want that company to be able to destroy hard drives and other media that may contain the information that can lead to identity theft. Plus, you’ll want one that can digitalize your important papers or, even, store the papers themselves. Onsite shredding companies that offer all these services can become your partner in keeping your business identity safe and helping your business succeed.