Insights From a Business Identity Theft Lawyer: Common Examples of Business Identity Theft—And How to Protect Your Company

Business identity theft is a growing threat that can have devastating consequences for small businesses and large corporations alike. Unlike consumer identity theft, which targets individuals, business identity theft involves fraudulently using a company’s information to commit financial crimes, open credit lines, divert funds, or damage the business’s reputation. This form of theft involves a stolen identity, where a criminal unlawfully uses a business’s identifying information and other personal information to commit a crime. Businesses may require a range of legal services to address the consequences of identity theft and protect their interests.

In Colorado and across the country, bad actors are exploiting both digital and public-record vulnerabilities to assume the identities of legitimate businesses. Preventative measures are essential to reduce the risk of business identity theft. Without proper precautions and ongoing vigilance, companies risk financial loss, legal complications, and long-term reputational harm.

This article explores the most common examples of business identity theft, the laws that govern this form of fraud, and what business owners can do to reduce their risk, including addressing their legal needs as part of a comprehensive risk management strategy, and consulting a business identity theft lawyer for guidance.

Don’t wait until it’s too late to protect your business.
If you suspect identity theft or want to strengthen your company’s defenses, our team is here to help. Call (970) 893-8857 today to speak with a business identity theft lawyer and get the legal guidance you need to safeguard your company’s future.

What Is Business Identity Theft?

Business identity theft occurs when someone uses a company’s information—such as its name, Employer Identification Number (EIN), or registration data, as well as sensitive details like social security number, credit card information, and bank accounts—without authorization for illicit purposes. Thieves may impersonate the business to secure loans, reroute payments, obtain lines of credit, or file fraudulent tax returns.

An identity thief may steal a business’s identifying information by stealing documents or using digital means to gain access to a person’s or business’s sensitive data. Stealing business information can have serious consequences for the victim, including loss of funds and damage to the person’s or business’s reputation.

This form of fraud is particularly dangerous because business records are often publicly accessible, making it easier for perpetrators to collect the necessary data without detection.

Common Examples of Business Identity Theft

Business identity theft can take many forms. Criminals often use stolen business information to open accounts, conduct fraudulent activity, and target established bank accounts. These incidents may lead to interactions with debt collectors or even debt collection harassment. Identity thieves may also use stolen information to obtain credit in the business’s name. This can result in significant legal and financial consequences for the affected business.

Fraudulent Business Filings

Criminals may file false amendments with the Colorado Secretary of State or the IRS to change a company’s mailing address, registered agent, or managing members. Once the information is changed, the thief can intercept sensitive mail. Stealing mail is a common tactic used to obtain business information, redirect funds, or apply for credit lines.

Fake Invoices and Payment Diversion

Scammers may impersonate a business and send fake invoices to clients who unknowingly pay the fraudster instead of the legitimate company. In other cases, they may contact customers pretending to be the business and ask for updated billing information to reroute payments, using text messages, emails, or phone calls to deceive clients.

Phony Credit Applications

By using stolen business credentials, thieves can apply for credit cards, lines of credit, or equipment leases. These fraudulent accounts are often left unpaid, damaging the company’s credit score and exposing it to debt collection actions. It is crucial to monitor your credit reporting and regularly review your credit report for unauthorized activity. If you spot fraudulent charges or accounts, promptly contact your credit card company to dispute them and help protect your business’s credit profile.

Impersonation in Government Contracts

Some perpetrators falsely use a business’s identity to bid on or obtain government contracts from government entities. When the work isn’t performed or is substandard, the legitimate company’s reputation and future eligibility may suffer—even though it had no involvement.

IRS and Tax Fraud

Using a company’s EIN, a criminal may file false tax returns to claim fraudulent refunds. Alternatively, they may report fake employee wages or other tax information to generate improper payments or refunds.

Intellectual Property Abuse

Impersonators may register fake domain names, social media accounts, or websites using the business’s name, logo, or branding. This is often done to deceive customers into providing sensitive information or to divert traffic and revenue.

How Colorado Law Addresses Business Identity Theft

In Colorado, business identity theft is addressed under a combination of state and federal laws. These laws establish the legal obligations of businesses to protect sensitive information and comply with data security requirements, as well as the legal rights of individuals and organizations to seek remedies if their information is compromised. Some key legal provisions include:

Colorado Criminal Code

Colorado law classifies identity theft as a felony offense under C.R.S. § 18-5-902. While it is typically associated with personal identity theft, this statute also applies when someone knowingly uses another party’s business information without permission and with the intent to defraud.

Business Filing Protections

The Colorado Secretary of State provides options for businesses to secure their filings, including:

• Secure Business Filing System: Allows companies to create a secure login to prevent unauthorized changes.
• Email Alerts: Businesses can sign up for email notifications of any changes or filings made in their name.

Data Privacy Laws

Under the Colorado Consumer Protection Act and the Colorado Data Privacy Act (effective July 1, 2023), businesses are required to implement reasonable security measures to protect data and notify affected parties in the event of a breach.

Federal Protections and Oversight

Several federal agencies play a role in combating business identity theft:

• Internal Revenue Service (IRS): Offers a “Business Identity Theft Affidavit” (Form 14039-B) for companies that suspect fraud.
• Federal Trade Commission (FTC): Provides resources for reporting and managing identity theft, including the Business Center for cybersecurity education.
• Small Business Administration (SBA): Warns businesses about scams involving fake loan offers, particularly in times of economic downturn or disaster relief.
• Financial Crimes Enforcement Network (FinCEN): Oversees enforcement of the Corporate Transparency Act, requiring many businesses to report beneficial ownership information beginning in 2024. The Corporate Transparency Act is part of broader regulatory compliance requirements for businesses, including those related to entity formation, to ensure transparency and prevent fraud.

Banks and other financial institutions also play a critical role in detecting, reporting, and addressing identity theft, as they are often the first to notice suspicious activity and are required to follow federal laws to protect consumer information.

The Fair Credit Reporting Act (FCRA) provides important protections for businesses and consumers, including the right to obtain free copies of their credit reports in certain circumstances, such as after a fraud alert or to check for identity theft.

Businesses in both Colorado and at the federal level must adhere to these compliance standards to protect against identity theft. If you believe your business may be at risk—or if you’ve already experienced suspicious activity—don’t wait to take action. Contact our office today at (970) 893-8857 to speak with a business identity theft attorney about your options for protecting your business, responding to potential fraud, and ensuring full compliance with federal and Colorado regulations.

How to Protect Your Company From Business Identity Theft

Taking proactive steps is essential to reducing your company’s risk of identity theft. Protecting your business from cyber-attacks is also crucial, as these threats can lead to significant data breaches and compromise sensitive information. Implementing preventative measures can greatly reduce the risk of identity theft cases and help safeguard your organization’s reputation. Consider implementing the following measures. Seeking legal guidance from an experienced business identity theft lawyer can help ensure these protective measures are implemented effectively.

Monitor Public Records

Regularly check your business registration with the Colorado Secretary of State for unauthorized changes. Set up email alerts and consider using the Secure Business Filing System.

Use Business Credit Monitoring

Enroll in a commercial credit monitoring service to detect suspicious activity, such as new accounts or sudden drops in credit score.

Secure Business Information

Limit access to sensitive data (like your EIN, banking details, and internal documents) to only those who need it. Use secure methods for storing and transmitting data.

Protect Your Digital Presence

• Use strong, unique passwords for business accounts.
• Enable two-factor authentication.
• Regularly update software and firewalls to prevent cyber intrusions.
• Monitor online mentions of your business name or branding to catch impersonators early.

Verify Requests

Train employees to verify any unusual or urgent requests for payments, changes to vendor details, or customer account information—especially those made via email or phone.

Report Suspected Fraud Immediately

If you suspect identity theft, contact:

• The Colorado Secretary of State
• Your business bank or credit card issuer
• The IRS
• Local police to report the incident and seek assistance with recovery
• A business lawyer to assess potential liabilities and prepare for recovery

Filing a police report with your local police is often necessary to document the incident and support your claim as a victim of identity theft. This report can help verify your identity theft claim when disputing fraudulent information with consumer reporting agencies and businesses.

Data Breach Response: What to Do If Your Business Data Is Compromised

A data breach can expose your business to significant risks, including identity theft, financial loss, and reputational harm. If your business data is compromised, acting quickly is essential to limit the impact. Start by immediately notifying any affected customers, partners, or vendors so they can take steps to protect their own information. Conduct a thorough investigation to determine the scope of the breach and identify how the identity theft occurred.

Next, work with identity theft attorneys to guide your response. As business identity attorneys with decades of legal experience, we can help you navigate the legal requirements for notifying credit bureaus and other relevant parties, as well as assist in setting up fraud alerts to prevent further unauthorized activity. Implementing new security measures and reviewing your data protection protocols are also critical steps in protecting your business from future incidents. By responding swiftly and seeking professional guidance, you can help safeguard your business against ongoing identity theft threats.

Fraud Alerts: Leveraging Alerts to Prevent Further Damage

Fraud alerts are a powerful tool for businesses facing identity theft or a data breach. By placing a fraud alert on your credit reports, you notify credit bureaus and financial institutions to take extra steps in verifying your identity before approving new credit or making changes to existing accounts. This added layer of security can help prevent identity thieves from opening fraudulent accounts or accessing your business’s financial information.

As experienced identity theft attorneys, we can assist you in placing fraud alerts and understanding how they work. We can also advise on monitoring your credit reports and financial accounts for any suspicious activity, ensuring you are alerted to potential identity theft as early as possible. Taking advantage of fraud alerts is a proactive way to protect your business, your credit, and your reputation from further harm.

The Role of Consumer Reporting Agencies in Business Identity Protection

Consumer reporting agencies, including major credit bureaus, are central to protecting your business from identity theft. These agencies collect and maintain detailed credit reports on businesses, tracking credit history, account activity, and other financial information. Regularly reviewing your business credit reports can help you spot errors or suspicious activity that may indicate identity theft.

Identity theft attorneys can guide you in working with consumer reporting agencies to dispute inaccurate information and prevent unauthorized access to your business’s credit reports. They can also help you implement best practices for monitoring and reporting, ensuring your business’s identity remains secure. By staying vigilant and leveraging the resources of consumer reporting agencies, businesses can better protect themselves from the risks of identity theft and fraud.

Long-Term Solutions for Business Identity Security

Protecting your business from identity theft is not a one-time effort—it requires ongoing attention and a comprehensive security strategy. Identity theft attorneys can help you develop and implement long-term solutions tailored to your business’s needs. This includes regularly monitoring credit reports and financial accounts for unusual activity, using strong passwords and advanced security measures, and training employees to recognize and prevent identity theft risks.

A robust identity theft prevention plan should also outline clear procedures for responding to data breaches and suspicious incidents, ensuring your business is prepared to act quickly if needed. With the support of an experienced identity theft attorney, your business can stay ahead of evolving threats, protect sensitive information, and maintain the trust of your customers and partners. Investing in long-term security measures is essential for safeguarding your business’s financial health and reputation.

When to Contact a Colorado Business Identity Theft Attorney

If you believe your company has been targeted or compromised, legal assistance can be critical. Identity theft lawyers can help victims recover financially and protect their rights. As experienced business attorneys, we can help you:

• Conduct an internal investigation
• Report fraud to the appropriate agencies
• Dispute false debts or credit claims
• Repair contractual and reputational damage
• Establish protocols to reduce future risk

An experienced attorney can ease the stress of navigating the aftermath of business identity theft, ensuring professional advocacy and personalized legal support throughout the process. Identity theft lawyers play a crucial role in helping victims understand their rights, pursue compensation, and restore their personal and financial security.

Timely legal intervention can prevent further harm and limit financial exposure. Business identity theft is not just a nuisance—it’s a potential crisis that demands swift and thorough action. Legal support is essential for victims of business identity theft to mitigate damages and achieve recovery.

To discuss your situation and explore your options, schedule a consultation with an experienced business attorney today.

Frequently Asked Questions (FAQ) About Business Identity Theft

How can I tell if my business identity has been stolen?

Watch for red flags such as unfamiliar credit inquiries, changes to state filings you didn’t authorize, or customers reporting suspicious invoices or communications.

What should I do if I find unauthorized changes to my business registration?

Immediately notify the Colorado Secretary of State and submit a Statement of Correction. Consider reporting the issue to law enforcement and seeking legal counsel.

Does business identity theft affect my personal credit?

Not usually—but if your personal information was also compromised, such as in a sole proprietorship, it can have cross-over impacts. It’s wise to monitor both business and personal credit.

Can I get insurance coverage for business identity theft?

Yes. Some commercial insurance policies include coverage for cybercrime or fraud-related losses. A business lawyer can help review your policy to identify coverage gaps.

Are small businesses more at risk than large companies?

Yes. Small businesses often lack dedicated IT or legal departments, making them more vulnerable to fraud and slower to detect breaches.

What federal resources are available if my business is a victim?

You can file a complaint with the FTC at IdentityTheft.gov, submit Form 14039-B with the IRS, and contact your state attorney general’s office.

How can a business identity theft attorney help with prevention?

A business attorney can review your data policies, draft internal controls, provide fraud training guidance, and help register trademarks to reduce impersonation risk.

Protect Your Business with Trusted Legal Guidance From Our Dedicated Business Identity Theft Lawyers.

At Anzen Legal Group, we understand that your business is more than just a name—it’s your livelihood, your legacy, and your future. Serving clients in northern Colorado and Fort Collins, we provide experienced business law attorney services to help protect your legacy. It is crucial to safeguard your business’s sensitive information and reputation to avoid potential liabilities and protect your assets. Business identity theft is an evolving threat, but with the right legal guidance and proactive strategies, your company can reduce its risk and recover more effectively if fraud occurs.

Our team of business attorneys offers a full range of legal services to support businesses at every stage. We can help you review your current risk exposure, implement preventive measures, and act swiftly if your business is compromised.

Call us today or contact us online to schedule a consultation with an experienced business identity theft lawyer.