New threat from ID thieves

June 2005

Small Businesses are wide open to a dangerous new form of identity fraud. Few safeguards are in place to prevent criminals running up thousands of pounds of debt in their name.

Company identity fraud costs businesses £50m a year, according to new figures from the Metropolitan Police and Companies House. But firms can now take steps to stop organised criminal gangs from impersonating them and leaving behind enormous unpaid bills.

Sophisticated criminals are exploiting a loophole that allows them to file false documents with Companies House to change a firm’s registered address or its list of directors. The crooks then pose as the targeted business to order goods such as cars, computers and mobile phones, ruining the legitimate firm’s credit and leaving the companies that supplied the items out of pocket.

Scotland Yard and the Company Register recently launched a joint initiative, Operation Sterling, alerting businesses to the growth in this type of crime and the need to monitor their filings with Companies House. Detective Chief Inspector Stuart Dark of the Metropolitan Police says: “Each time this type of fraud occurs, the average cost is £2m. The disruption to cashflow is enormous and can be very damaging to small firms.”

But small companies are not the only at risk of being impersonated – they can also lose out if fraudsters posing as legitimate companies order expansive goods for them.

To avoid this, firms are advised to check a companies details thoroughly at Companies House before delivering an order. If there has been a recent change of address, it might be wise to contact the former address or phone number to check that the company has indeed moved.

Companies should also regularly check contact details registered in their own name. They can also sign up for a system that will alert directors if details are amended and they may file documents electronically to avoid bogus paper copies being accepted.

Source: www.thisismoney.co.uk

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