Identity theft and reputational fraud

Fraud doesn’t always mean a direct financial loss. It could be identity theft or reputational damage from online activity you can’t control which damages your credibility.

Identify theft

Identity theft happens when someone uses information about you without your permission. They could use your name and address, credit card or bank account numbers to order products and services online, set up business trading accounts with businesses or even pretend to be you if they are arrested!

Identity thieves could even obtain passports, receive government benefits and apply for loans by accessing your personal data such as:

  • Credit card information and bank account numbers.
  • Name, date of birth and signature.
  • Your personal address.
  • Mother’s maiden name (often used to verify your identity).
  • Online usernames and passwords, driver’s license number.

Often much of this information is online (see how much data is available by looking at your social media accounts or conduct an internet search on your name), or it could be as easy as someone rifling through your rubbish bins at night to collect discarded information.

Avoiding identify theft

There are a number of things you can do to reduce the chance this happens to you.

  • Don’t use public computers or Wi-Fi hotspots to access or provide personal information or login to online banking. Use the hotspot feature on your cell phone instead.
  • Create strong and unique passwords for online accounts and at home.
  • Use 2 Factor Authentication. (2FA) is the use of two of the following 3 pieces of evidence, or factors, as proof that you are who you claim to be during an authentication/login process.
    • Something you know (such as a password);
    • Something you have (such as a physical token or soft token using such tools as Google Authenticator or Microsoft Authenticator); and
    • Something you are (such as biometrics).
  • Always accept any updates to your computer operating system. These often include security patches and other updates to protect your data.
  • When shopping online, verify that your data is being transmitted securely by looking for “https” at the beginning of the website address and/or a closed padlock symbol.
  • Try to limit the personal information on social media. And be sure to configure your security settings for your social media accounts so that only your friends and contacts are able to view what you post. Also, be leery of social media surveys that ask questions that would typically be used for security questions and answers.
  • Ensure that you have validated the identity of anyone with whom you are sharing your sensitive information to ensure that they are indeed a trustworthy source with a legitimate need to have such information.
  • The following items in an email, may indicate a potential scam:
    • You don’t recognize the sender;
    • The grammar or spelling in an email is incorrect or difficult to read;
    • The sender is requesting a copy of your passport or driver’s license;
    • The sender states that you have a virus on your computer;
    • The sender states that you owe money for something that you do not recall owing;
    • The sender states you won a contest that you don’t recall entering; or
    • The sender is offering you a deal that is too good to be true (if something appears too good to be, it probably is!)

Reduce the potential for reputational risk

Reputational risk is a threat to the brand of your business. Usually due to an event that causes negative public perception or bad publicity.

Examples of reputational risk

  • Your business receives low ratings or negative comments from customers on popular social media platforms regardless of whether this feedback is truthful or honest.
  • Your business decides to launch a new product to market. In order to launch the product quickly, you bypass the usual quality testing processes and, as a result, the quality is sub-par resulting in a flimsy product that is not dependable. This results in declining sales and the business reputation drops as well. Although future products go through the much more stringent quality testing process sales don't improve as the brand’s image is now tarnished and viewed as cheap and unreliable.
  • Reputational risk can also occur due to events outside of your control, for example, a criminal breaches all of your customer's private information and publish it online, or a staff member handles a customer complaint badly and that customer takes that and shares that bad experience to the media.

There are ways to mitigate these types of risks to your brand.

1. Protect yourself against data breaches.

Make sure you back up your data, secure your devices and network and encrypt important information.

2. Be vigilant about customer service mishaps.

Make sure you have customer service training for all of your employees to ensure they understand the importance of professionally (and successfully) dealing with complaints.

3. Ensure your hiring process contains thorough background checks.

Background checks and other pre-employment checks are a smart step to include in your hiring process.

4. Have a 'crisis' communication plan.

If something does go wrong, you need to be prepared to respond quickly. Having a crisis communication plan specifically for your business is essential. It could be as simple as having a list of all potential risks and your planned response to address them.


If you experience identify theft, take the following steps:

  • Contact the police to file a police repor
  • Visit to report the incident and obtain tools to assist you in recovering.
  • If you think you may be a victim of an Internet crime, file a complaint with the Internet Complaint Crime Center IC3 at
  • Change passwords, including your banking password, on all of your accounts that may be affected. You may have to cancel some applications and start again.
  • If you’ve clicked a suspicious email link, close your browser, and perform a virus scan.
  • If you give any callers the PIN of any of your cards, call the card issuer to block any activity on your card and/or reset your PIN.

Contact Us

Contact a Small Business Team member to discuss how we may help you achieve your business goals.

Contact Us


For informational purposes only. There is NO WARRANTY, expressed or implied, for the accuracy of this information or its applicability to your financial situation. Please consult your financial and/or tax advisor.

Full legal disclaimer