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Safety First

Keep your customer and employee data on lockdown.

This story appears in the June 2007 issue of Entrepreneur. Subscribe »

When it comes to identity theft, entrepreneurs have to worry about safeguarding not just their own personal information, but also that of their employees, customers, clients and partners. The concept of identity theft has grown as awareness of the problem has risen. "The parameters of what is considered identity theft [have expanded] to include things like account takeover and stealing someone's information but not actually using it," says Judd Rousseau, COO and director of fraud operations for identity theft solutions company Identity Theft 911. That means business owners have to pay attention and safeguard everything from their employees' Social Security numbers to their customers' credit card information.

Harish Rao, 27, co-founder and CEO of online community-building firm EchoDitto, is well aware that his business needs to be vigilant when it comes to identity theft. His $2.5 million company discourages people from sending personal information like Social Security numbers and health forms via e-mail and has set up a secure online portal for employees. Sensitive paperwork is kept in a locked office. When discarding files, Rousseau says, "Shred anything that's sensitive." That's advice Rao and EchoDitto already follow.

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