Corporate Identity Theft

    Companies House estimate that there are between 50 – 100 cases of Corporate Identity Fraud occurring every month.  Whilst this is against a backdrop of millions of documents being received each month by Companies House, the cost incurred by British business as a result of Corporate identity fraud has been estimated to be in the region of £50 million each year (with some estimates placing this figure much higher).   Obtaining or changing a company's identity can be very straightforward.  For example a fraudster may file a change of registered office notice or change of directors’ details at Companies House by signing one simple form.  No great legal knowledge is required.  Companies House accepts paper documentation in ‘good faith’ and as such, registers documentation received without sending any further notification to the company that certain company details have been changed.    It is perfectly possible therefore for a fraudster to appoint him or herself as a director of a target company or alternatively change the target company’s registered office address to which the fraudster has access.  Once a company’s registered office address has been successfully changed, all Companies House notices will be sent to that address.  Even worse, a debtor or supplier of the company may send monies or goods to the new registered office address.   The fraudster only needs be successful once in intercepting monies or goods before targeting another company.  Inevitably, by the time the company or authorities learn of the fraudulent activity, the fraudster will have moved and the postal address will be vacant.    However, there are procedures that can be followed that will help to dramatically reduce the threat of Identity fraud.  These procedures include:  

1. Online filing.  Every UK Company is able to register for an authentication code (much like a pin number).  This enables a company to submit certain documents online reducing the chance of such documents going astray in the postal system. 

 

1. PROOF scheme.  Once a company has obtained an authentication code from Companies House, the company can then sign up to the Protected Online Filing Service.  Once signed up, Companies House will then not accept paper copies of forms such as those changing a Companies registered office or change of Directors details.  These documents will only be accepted electronically (which can only be submitted using the authentication code).  Therefore, provided the authentication code is kept safe (as with your bank account pin number) then the chances of a fraudster being able to change a companies details are dramatically reduced. 

 

1. Monitor.  Companies or individuals can register so that they are automatically notified of all changes that occur to a company’s details held at Companies House.  The cost of this service can be as little as 50p per year.

  In addition to these points, company information should be stored securely and all information that is to be destroyed should be done so securely (as you would when destroying personal information).   If you would like any further information on any aspects covered by this note or have any further questions then please contact either Alan Williams, Robert Sedgwick or David Hallett in Buss Murton’s Company and Commercial department on 01892 510 222.

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