Republicans back bill to crack down on business identity theft in Ohio
Republicans are backing a bill to crack down on small business identity theft, which a national study says has grown by huge percentages in the last few years.
The bill comes after a Columbus man was sentenced to three years in prison for getting several old businesses reinstated at the secretary of state’s office and then using them to applying for unclaimed funds.
Senate Bill 98 would send fraud claims filed with the secretary of state to the attorney general for investigation.
Secretary of State Frank LaRose said businesses have to get court orders if they contact his office to report the name or statutory agent on their businesses has been changed.
"What this would do is set up an expedited process and put the burden of proof on the other guy," LaRose said. "For example, if there is a dispute that arises from this, then that could be litigated. And of course, there's always that opportunity to have to have that due process. But this would put the benefit on the side of the Ohio business owner to change things back to the way that they were and to prevent the fraud from continuing."
The bill would also limit filings for reinstatement of old businesses to two years since they were canceled. Marcus Beatty of Columbus filed for reinstatement of several old businesses and then applied for unclaimed funds from the state using those business names. Beatty was sentenced in February to three years in prison and ordered to repay $486,408.
Senate Bill 98 would also require agents that handle business disputes have residential or business addresses, and not PO boxes or addresses at package mailing centers. And it would require mailings that look like they're from government entities and requesting information such as certificates of good standing or employee identification numbers but are actually not from the government to make it clear that they aren't.
It's unclear how much business identity theft costs Ohio entrepreneurs. But sponsoring Sen. Michael Rulli (R-Salem) agreed with an estimate that chasing fraudulent name changes and bills from fake accounts that come with business identity theft costs millions in actual dollars, along with the time it takes away from running a business.
“There's a lot of time that's taken away from your day-to-day chores of running a business. So the hidden cost there is going to be completely different than the actual cost from the bill that you didn't buy anything from. So I would estimate millions, too,”
The Ohio Chamber of Commerce also supports the bill.
Certified fraud examiners with Dun & Bradstreet said global identity theft jumped 106% in 2019, and then 254% in 2020 during the COVID pandemic.