Digita warns in a recently published white paper that companies are at risk because fraudsters can submit fake papers to Companies House and have the official address of the company changed.
With that simple act, they can run up huge debts in the name of a company which knows nothing about the fraud until it is too late, it said.
"The trick appears to be gaining control of a company and its assets as far as third parties are concerned," said Ian Manson, the author of the Digita report. "This can include obtaining supporting documentation from Companies House and then approaching suppliers of high value, easily disposable, goods and placing orders apparently on behalf of the company, with delivery being made to the company’s 'new' registered office."
Digita says that it knows of the owners of an office block in Moscow who were barred from entering the building when ownership had been transferred out of their hands without their knowledge.
"In another well known case taken up by the Federation of Small Businesses, the proprietor of a business was very surprised to discover that the registered office of his family business had been changed from the address at which it had been located for the last 100 years," said Manson. "Even the company’s nameplate was stolen from the front of the building."
Digita says that of the half a million documents filed each month at Companies House, around 50 per month are false. Though this is a small number, they say, the costs associated with a single incident are high. "According to the Metropolitan Police a single filing fraud could cost £1 million and could very seriously damage the businesses that fell victim," said Manson.
A vital element of the frauds is that companies are not aware of the change to their records until they file their annual returns. At that point the real company address on their filings will not match the fake company address held at Companies House, and an investigation will follow. That gives fraudsters up to a year in which to use a company's credit to acquire goods, it said.
Digita said that one solution to the problem is to use the protected on-line filing scheme (PROOF) which is operated by Companies House. This system tells companies every time a record is changed.
