Business identity theft is on the rise: lawyers need to be educated about business ID theft to protect themselves and their clients.

Sixty percent of businesses that experience identity theft fail within one year of the crime, according to the Florida Department of State's Division of Corporations.

That stark reality, coupled with an uptick in this relatively new type of crime, has spurred the division to alert businesses --including lawyers--to the threat and how to reduce the chances of falling prey to identity thieves.

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"Business identity theft is essentially the same as personal identity theft, except the identity stolen is that of a company or other business entity, and the damage is usually much more severe," said Ricky Harper, director of the Division of Corporations, adding most business owners are unaware of the crime or ways to protect themselves from it.

Harper said the state first became aware of the rising problem of business identity theft in late 2011, when the National Association of Secretaries of State produced a white paper on the subject.

According to the NASS, state trends make it clear that criminals are working to exploit state filing systems and business registration websites by filing bogus reports with secretary of state offices or manipulating online business records in order to steal cash and property using fraudulently obtained lines of credit.

"Using altered records, which appear to indicate that they have the authority to act on the behalf of a victim entity, the criminals can then apply for credit accounts with various retailers," according to the NASS white paper. "While retailers will often check with business credit rating agencies to verify that the information in an application is correct, it can be difficult to immediately detect that a crime has been committed because this information is based on the same secretary of state business records that have been altered by the criminals."

Harper said the Florida Department of State is working on a multi-pronged plan of attack, with the goal of protecting the state's business owners from identity theft. As soon as those strategies are in place, they will be announced to the public.

"Thieves are after small businesses because they do not possess strong IT departments or multiple finance staff members with the resources to manage and check corporate filings, bank accounts, or credit ratings," Harper said. "A small business is vulnerable because it typically has two distinctions that make it a great target: a small and very busy staff, and readily available credit."

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