Corporate Identity Theft: A Growing Risk

• Author: J. Ralph Byington,Jo Ann McGee
• DOI: http://doi.org/10.1002/jcaf.22061
• Published date: 01 July 2015
• Date: 01 July 2015

37

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22061

f

e

a

t

u

r

e

a

r

t

i

c

l

e

Corporate Identity Theft:

A Growing Risk

Jo Ann McGee and J. Ralph Byington

INTRODUCTION

According to the

Association of Certi-

fied Fraud Examiners

(ACFE), the global

price tag for white-

collar crime (WCC)

has reached $3.7 tril-

lion annually (ACFE,

2014). This type of

crime has been facili-

tated by information technol-

ogy (IT) advances that have

changed the online landscape

and created cyber vulnerabili-

ties that have made it easier to

commit WCC.

White-collar crime affects

all types of businesses without

consideration for company size,

industry, or country. White-

collar crime manifests itself

in many different forms. The

early forms of WCC included

bribery, extortion, bid rigging/

price fixing, counterfeiting,

embezzlement, insider trad-

ing, securities fraud, forgery,

money laundering, kickbacks,

payroll fraud, tax evasion, and

fraudulent financial statements.

The computer age, however,

has expanded WCC to include

credit card fraud, bankruptcy

fraud, phone and telemarketing

fraud, insurance fraud, health

care fraud, environmental law

violations, economic espionage

and trade secret theft, com-

puter and Internet crime, and

personal and corporate identity

theft (The Crime Report, 2009).

According to the FBI, personal

and corporate identity theft

are the fastest growing crimes

in the United States. However,

they are quite different in terms

of impact. Personal identity

theft has the potential to be

devastating to a single indi-

vidual. Corporate identity theft

can be devastating to the busi-

ness, the employees, and their

families, as well as the com-

pany’s customers. For example,

one form of CIT involves the

fraudster using the identity of

the business to apply

for credit and/or

loans. As a result, the

company whose iden-

tity was stolen may

lose its credit sources

along with access to

readily available cash.

The operational dif-

ficulties that would

then occur would

be difficult to over-

come and could lead to lost

jobs (Legal-yogi.com, 2012).

The purpose of this article is

to familiarize management

with the risk associated with

exposure to CIT and to offer

strategies that management can

implement to detect and pre-

vent losses to CIT.

CORPORATE IDENTITY THEFT

Corporate identity theft,

also referred to as business or

commercial identity theft, is

the deliberate and fraudulent

misuse of a company’s identity

to profit through illegal means.

It is a risk to companies from

the smallest to the largest on

a global basis. As previously

noted, it is one of the fast-

est growing types of crime

When the computer is used in conjunction with

the Internet to perpetrate crime it is referred to as

cyber-crime. A growing problem within the cyber-

crime realm is corporate identity theft (CIT). The

purpose of this article is to familiarize manage-

ment with the risk associated with CIT and to offer

strategies management can implement in an effort

to detect and prevent losses. © 2015 Wiley Periodicals, Inc.