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ID Theft

id theft ID Theft
I’m sure you, like me, will be concerned by the media reports on Identity Theft.

As well as personal ID theft, Corporate Identity Fraud is on the increase and the effects can be devastating for the company whose identity has been stolen and its suppliers who supplied the goods in good faith.

It is disturbingly easy for a fraudster to change company documentation.

This includes the Registered Office, Trading Address, and even the names of Directors of the company can be changed without them knowing. Companies House have to accept documentation it receives at face value. Consequently, the checks 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.

Once the company’s address has been changed, the fraudsters can order goods from current or new suppliers in the company’s name to be sent to the new address. Any supplier carrying out a check on the details kept at Companies House or with any of the credit reference agencies is likely to see a healthy credit rating and details which would correspond to the paperwork supplied with the order and/or credit account application. Therefore there would, in the majority of cases, be no reason not to accept the order.

The legitimate company would at this stage, not know about the order and debts increasing in their name until the supplier chases them for payment. Too late! The fraudsters would be long gone with the goods, leaving the company to deal with the consequences.

There will always be at least two direct victims of corporate identity fraud.

The company whose details are taken and any other business that subsequently supplies goods or services to that company. Ultimately everyone pays for this fraud indirectly through higher product costs and insurance premiums.
There are some simple steps to help prevent company identity fraud.

Whilst not 100% guaranteed, they will go a long way towards protecting a company’s identity.

  • Educate your staff of the importance of never throwing out company documentation showing letterheads, signatures, bank account and company credit card details or invoices (including utility bills). Ask your staff to be vigilante for individuals quizzing them for details about company directors/key staff members. Your staff may be unwittingly providing the information to a potential fraudster.
  • Invest in systems that help you to track any changes in your company details held by Companies House. This allows the Directors to take immediate action if they did not make those changes themselves and reducing the risk of becoming an unwitting accomplice in corporate identity fraud.
  • Invest in a shredder and shred all documentation before disposing.

Companies House has taken the initiative.
On 17 January 2005 they introduced a new measure to reduce the risk of Identity Theft. The service is called PROOF (PROtected Online Filing).To quote the Companies House web site:

“Companies House has been aware for some time of the damage that can be done by hijackers to companies and suppliers of goods and services. Company hijacks normally involve fraudsters changing details of the company’s directors and registered office and then using the company to order goods or services on credit which they sell, but never pay for. The company then has to sort out the aftermath, including correcting its public record.

Companies House cannot prevent hijacking.
It does not have the power to investigate the contents and accuracy of forms sent to them for filing. However it has been looking very closely to see whether Software Filing systems can improve security for companies. Both our ‘WebFiling’ and ‘Software Filing’ services have security protection by using passwords, confidential authentication codes and recognised email addresses.”

Keep your company’s authentication code and password safe!
A fraudster would be unable to modify the structure of a company without gaining access to its Online Filing Account or the company’s authentication code. (The company’s authentication code is sent to the Company Secretary at the address registered at Companies House.)

To use the PROOF service you must be a registered user with the Companies House WebFiling or Software Filing services, as you will be required to supply the Company Authentication code on the ‘Opt In – PR1’ form. The form will not be accepted without it.

For information about, and to register for the Companies House WebFiling or Software Filing services click here.
Once you are registered, to enable PROOF you must inform Companies House using the forms below.

  • PR1 – opt in
  • PR1 – continuation sheet
  • PR2 – opt out
  • PR3 – consent for paper filing

The forms are available here.

If you would like assistance or further information, please feel free to contact us.
*** UPDATE 16 Oct 2006 ***
As posted on Companies House website
URGENT FRAUD WARNING Authentication Codes for WebFiling
There have been instances recently where Companies House customers have been contacted by someone claiming to be from Companies House, asking for verification of their WebFiling Authentication Codes. Please be aware that Companies House personnel will never contact you by telephone to try to ascertain your WebFiling Authentication Codes.
Should anyone contact you claiming to be from Companies House please try to obtain a return telephone number and contact us (Companies House) immediately .

 ID Theft