Imagine this: It's a regular Monday morning, and you’re sorting through a week’s worth of mail at your business. The pile is noticeably thinner than normal, but you don’t think much of it—after all, mail gets lost sometimes. Weeks later, you receive a notice from the state of California about changes to your business filing. Confused, you dig deeper, only to discover that someone intercepted your mail, stole sensitive documents, and used your company’s information to file fraudulent paperwork with the state. Suddenly, your business identity has been hijacked, and you’re left scrambling to undo the damage.
Situations like this are becoming increasingly common and fraudsters are becoming more sophisticated in how they operate.
In a recent case, an individual visited a local branch attempting to open a new business account using legal documents and an out-of-state driver’s license. At first glance, everything appeared legitimate—even his answers to standard verification questions were well-rehearsed. However, ARB’s fraud review process uncovered critical inconsistencies. The opening deposit—a check from an out-of-state business—was determined to be stolen. Further investigation revealed that the individual had fraudulently registered a new entity with the California Secretary of State, using it to create a convincing cover for negotiating the stolen check. By cross-referencing business records, ARB’s team identified that the legitimate company tied to the check had no connection to the individual attempting to open the account.
“Fraudsters often anticipate the questions they’ll be asked and come prepared, which is why it’s critical to go beyond surface-level verification and dig deeper into the details.”
Ana Gutierrez, Fraud Investigations Manager
Business identity theft is on the rise, impacting companies of all sizes and claiming thousands of victims each year.
According to the Identity Theft Resource Center®’s (ITRC) 2025 Business Impact Report, businesses in the study that experienced a breach reported that 62.5% saw losses over $250,000, and more than 36% lost over $500,000.
In addition to monetary damages, companies frequently experienced reputational harm, unauthorized account openings, and disruption to their core operations as a result of these crimes.
The IRS has issued public warnings regarding the increase in business identity theft, emphasizing the rise in fraudulent filings and the potential impact on organizations. For the most current and official information, visit the IRS’s official website and search for “business identity theft warning” in their Newsroom or Identity Protection sections. The IRS regularly updates these resources with alerts, guidance, and preventative tips for businesses.
What’s more, thieves often target small and midsize businesses, knowing they may lack robust preventive measures.
A crucial step to help prevent and detect business identity theft is to frequently review your business’s official state filings and credit reports for any unauthorized changes or newly opened accounts. By proactively monitoring these records, you can quickly spot suspicious activity—such as unexpected amendments to your business registration or unfamiliar credit inquiries—and take immediate action to mitigate potential damage. This regular review acts as an early warning system, allowing you to address issues before they escalate.
Staying vigilant is key to safeguarding your company. Here are other practical steps you can take:
One of the most important defenses against business identity theft is a thorough and consistent review of business documentation. Fraudsters often rely on small discrepancies going unnoticed, but trained investigators know exactly where to look.
Common red flags include:
“In many cases, it’s not just one red flag, it’s a pattern. Our job is to connect those dots before fraud can occur.”
Ana Gutierrez, Fraud Investigations Manager
At ARB, we know how critical it is to keep your business safe from fraud. Here’s what sets us apart:
Business identity theft is a real and growing threat, but you don’t have to face it alone. Take steps now to safeguard your company, educate your team, and choose a partner who’s committed to your security. At ARB, we’re here to help you stay ahead of fraud—so you can focus on growing your business with confidence.
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