A Hidden Danger That Can Sink Your Rental Business

by Chris on November 7, 2011

Small Businesses the Most Susceptible

Of all the risks a landlord or property management business may face, one of the most often overlooked is a breach of data security, leaving business records and tenant documents susceptible to theft.

One data breach can ruin the integrity and credibility of a company. What’s more,  it can violate the law, especially in the case of  theft of information from tenant screening reports.

While many business owners know how to prevent theft from trash-raiding or check fraud, others fall victim to less well-known types of fraud, which can be equally, or even more devastating for a small business.

Photocopier fraud for example, which can occur if the vendor of a previously-owned machine fails to wipe images automatically stored on the hard drive, is a growing concern among business owners and privacy officials.

“Small businesses often run the highest risk of falling victim to fraudulent activity,” says Michael Collins, Vice President Sales, Shred-it Canada, a global information security company providing document destruction services. Aside from the potentially crippling high costs of a data breach, small businesses often have no formal information security strategies, policies and procedures in place.

They may also have limited access to the legal resources needed to keep them compliant with the increasingly complex legislative and regulatory requirements related to privacy protection and identity theft and fraud.

Yet recent research from the Association of Certified Fraud Examiners has shown that fraudulent activity hits smaller businesses harder than larger organizations – those with fewer than 1,000 employees lose an average of $150,000 per fraud case, while larger companies lose $71,000.

Despite these statistics, Shred-it’s own customer research shows that just 68 per cent of organizations have official guidelines for document destruction.

“No business wants to expose itself to fraudulent activity,” adds Collins. “From auditing your current procedures to implementing a secure document destruction policy, there are a number of simple and cost effective steps that small businesses can take to address security risks and protect valuable information”.

Paper-based information sources

A number of security breaches can be traced back to mishandled, lost or stolen paper documents. Shred-It recommends eliminating these risks by introducing a “shred-all” policy, when all unneeded documents are fully destroyed on a regular basis.

Don’t deposit unneeded documents in unsupervised areas; ideally, introduce special locked consoles instead of the blue recycling bins.

If you don’t have the resources to implement a secure document destruction program, work with a reliable third-party vendor.

Ask to view your vendor’s document destruction process.

Make sure the vendor has a reliable shredding methodology and special equipment, such as locked shredding consoles and powerful shredding machines.

Request a document certifying that your unneeded documents have been securely destroyed.

Electronic information sources

Don’t overlook hard drives on computers or photocopiers – erasing your hard drive does not mean that the data is gone. Physical hard drive destruction is proven to be the only 100% secure way to destroy data from hard drives permanently.

Have up-to-date and effective computer network protection, including anti-virus software and a firewall.

Make sure employees set up strong computer passwords, ensure they are changed regularly.

Instruct your staff not to leave computer screens with sensitive business or customer information unattended.

Make sure you have formal information security policies in place; train your employees to know the policies well and follow them rigorously

Limit the number of people who handle confidential documents. Be careful when hiring new employees. Perform full reference checks and, where warranted, ask your new hires to sign confidentiality agreements.

Demonstrate a top-management commitment to the total security of your business and customer information.

Conduct a security audit of your organization. Shred-it offers free security assessments.

Adopt a shredding  policy making sure all paper documents are securely destroyed on a regular basis.

Outsource document destruction to reliable vendors, whose methodology ensures total security of the document disposal process.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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