What is Filings and Registrations Fraud?

What is Filings and Registrations Fraud? - TJ Woods - Worcester, MAIdentity theft is a well-documented danger to individuals of all walks of life. However, thieves have begun focusing their attention on businesses wherever possible. Not only is it easier to slip large purchases past large companies, their information is often easier to access. One of the ways thieves can access it is by committing “filings and registrations fraud.”

The Role of The Secretary Of State

The Secretary of State has an important, albeit, limited role in the process of business information. They received the initial filing and as long as basic requirements are met, they accept the information at face value and file it away. This is known as a “good faith filing,” because the Secretary of State does not actually have the power dig further into the issue. This is a golden opportunity for thieves to steal your business’ identity.

What Is Filings and Registrations Fraud?

Here is an excerpt from our whitepaper about The 6 Business Identity Theft Scams to Watch Out For:

Fraud for a business’s filing and registrations works one of several ways:

  • Fraudulent change of a business’s registration information.
  • Fraudulent reinstatement of a closed or dissolved business.
  • Filing (or using) an intentionally similar business name or DBA (Doing Business As).

By changing this information they can change the address of the business for the purpose of credit and goods scams, reinstate a business for similar scams or tax fraud, or falsely pretend to be a similarly named business.

Tactics Used to Steal Business’ Identities

Here is a further breakdown of how thieves will exploit your business for identity:

Changing business registration information: For a minimal fee, thieves will file a fraudulent change of address form or a similar form. They may also file a change of directors or officers. They can wreak havoc with such changes, for instance, the fraudulent sale of business assets and the opening of new credit lines.

Reinstatement of a closed business: When a business has filed the articles of dissolution with the Secretary of State, it is officially closed for business. However, there is a process for reinstating it, did the owners ever want to get back in business. The previous owner of a business which is now closed is unlikely to monitor its activities, which makes it prime for the spoiling. It is a shock to someone to be contacted by creditors seeking to personally collect for business debts from a business long closed.

Intentionally similar business: This is sometimes referred to as “doing business as.” A small variation in spelling, entity type, or a myriad of other small changes can make a fake business very similar to a real business.

Stay Alert

The best way to protect your business is to stay alert. Check your state filings and information regularly and watch out for any suspicious activity. It might not be a mistake, it might be evidence of someone trying to pilfer your business’s identity.

The other way to protect yourself from fraud is to make sure you have the insurance you need. You can do so by getting in contact with the experienced professionals at TJ Woods Insurance Company, Worcester, MA today for help. Our experts would love to answer your questions or assist you in reviewing what specifically your business insurance policy covers. We also offer the full spectrum of business insurance, including errors and omissions insurance, and directors and officers insurance.