Entrepreneurs who form, but ultimately do not activate, business entities may be vulnerable to identity theft. In a new post on our Privacy Compliance and Data Security blog, my colleagues Jeff Friedman, Andrew Halbert and Joseph Superstein explore the rising number of business identity theft cases.
In particular, they note scams in which criminals seek to exploit state filing systems and business registration websites for financial gain. By filing bogus reports with Secretary of State offices or altering online business records, these criminals have been able to steal considerable amounts of cash and property using fraudulently obtained lines of credit. By altering business records, criminals may appear to have the authority to act on behalf of a victim entity, which in turn, enables them to apply for credit accounts with various lenders, retailers, and suppliers. I invite you to read their valuable discussion on reducing the risk associated with this growing criminal activity, by voluntarily and safely dissolving inactive business entities.