Identity Theft a Huge Problem for Small Businesses

Another important step: Have those employees change their password every 45 days and have passwords contain both letters and numbers.

Get the Message Out

After you've set up safeguards, train your employees on company policy and procedure. They need to know the rules, the reasoning and, most importantly, the consequences should they be caught stealing client information. According to Huda, 33% of identity theft is committed by an employee.

Check Up on Employees

We're not saying get a nanny cam. But close. Foley recommends having background checks done periodically on employees. The person whom you hired 20 years ago isn't the same person today, explains Foley. Life changes like a divorce, a sick child or parent, or a new addiction can be exploited by thieves, who want to gain access to your company files.

Know the Law

Laws are slowly changing to protect businesses as well as consumers. So read up. For example, the new FACT Act Identity Theft Red Flags Rule requires that businesses that offer credit must draft an identity theft prevention program, keep the program current and appropriately train their employees. The deadline is Nov. 1.

Get Thee a Shredder

Some states require that you shred customer data. So invest in a good quality shredder or hire a shredding company with a solid reputation who shreds on location. When a company shreds at another site, it means people will be sorting through the paperwork, warns Foley.

Call in the Pros

If you're not sure where your security can be breached, get help. Ask your fellow business owners for referrals. Look for someone with a Certified Fraud Examiner accreditation. Identity Theft Resource Center's Foley charges $2,500 for a presentation and up to $5,000 for one-on-one training. Compliance Coach's Web-based CompliancePal costs $295-$995 a year.