Corporate Fraud & Theft
Company Identity Fraud
Company Identity Fraud is similar to personal identity theft. The trouble is it is terrifyingly easy to change company documentation. Without a great deal of knowledge or effort, a fraudster can change the Registered Office, Trading Address, and even the names of Directors of your company without you knowing. Companies House have to accept documentation it receives at face value, so any checks that are undertaken on the cloned company will show that the applying director is an official director of the company and that the address given is the Registered Office of the company. In addition, any ordinary credit search against the business with any of the credit reference agencies is likely to show a healthy credit rating, hence there will seemingly be no reason not to accept the order. So then the fraudster’s fun begins.
Once your address is changed, the fraudsters can order goods from current or new suppliers in your name to be sent to the new address. Any supplier carrying out a check on the details kept at Companies House will be unaware of any criminal activity and using your own well-established credit rating will dispatch goods to the fake address. Of course, your legitimate business will not see these goods and the supplier will not be paid and you will both be blissfully unaware of the situation until the supplier chases you for payment. But by then the fraudsters are long gone with the goods, leaving you to deal with the consequences.
So there will always be at least two direct victims of corporate ID fraud. The company whose details are taken and any other company that then supplies goods or services to that cloned company. And ultimately everyone pays for this fraud indirectly through higher product costs and insurance premiums.
The steps to help prevent company ID fraud are, however, relatively simple and whilst not 100% foolproof, gone a long way towards protecting a business.
Never throw out company documentation showing letterheads, signatures, bank account and company credit card details or invoices. Business should also look at investing in systems that help them to monitor any changes in their company details held by Companies House. Some services will send an email alert following any change to your company details held at Companies House. This allows you to take immediate action if you did not make those changes yourself and ensures you do not become an unwitting accomplice in this kind of fraud.
