Two-thirds of businesses are in danger of becoming victims of company identity theft where a criminal uses that firm’s name without its consent, research suggests.

According to a survey by insurance company CPP Group, 64% of companies admit they have not done enough to protect themselves against identity fraud and one in five says either they have already been hit by a scam or know someone who has.

While almost eight in 10 companies say they have heard of the problems that can be caused by identity theft, 47% admit they cannot accurately describe what it could involve while a massive 87% have no strategy in place to tackle the issue.

Company identity theft can take many forms but one of the most common scams is for orders to be placed using a firm’s identity for delivery to a temporary address. In some cases, criminals have managed to access Companies House’s computer system and change the company’s name or address.

While 68% of respondents would call the police if they were victims of identity crime and 38% would approach Companies House, CPP advises businesses to deal directly with customers, suppliers and lenders who claim they are owed money.

“This research shows that company identity theft is a very real crime and it affects the livelihood of business owners up and down the country,” said Owen Roberts, head of identity protection at CPP.

“It’s surprisingly easy for a fraudster to take on the identity of a company and then abuse it with no regard for the long-term damage that it does,” he added. “The consequences of identity theft can be catastrophic and all businesses should take the time now to protect themselves rather than become a victim.”

CPP recommends taking the following precautions to protect yourself from identity theft:

• Sign up for Proof & Monitor at Companies House
  If your business is a limited company, Companies House now offers the Proof system by which passwords and authentication codes are used to authorise any changes to your company’s details
• Beware of ‘consultants’
  If you need professional services such as accountants or solicitors, use only trusted and reputable organisations. Always bear in mind the importance of the business information you provide
• Run regular internet searches on your business By regularly checking for reference to your business, you may uncover incidences of identity theft. There’s huge potential for others to misuse your name and reputation on the internet
• Regard information as power
  Anything bearing your business’s details, from letterheads to legal documents, should either be stored carefully or disposed of securely
• Check your Experian business credit report
  Your business may have its own Experian business credit report that is worth checking on a regular basis
• Ensure regular and structured supplier contact
  Thieves can impersonate you or your business to obtain goods or services from one or more of your suppliers. Regular contact with those suppliers makes it more likely for them to spot an imposter
• Don’t accept handwritten documentation
  This is a basic precaution in ensuring the people you deal with are reputable
• Be vigilant
  Always pay attention to the state of your relationships with customers, suppliers and partners. If anything changes, find out why

Identity theft cost business £50m in 2005, the poll added, and is expected to rise by 1,300% by 2020.