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.
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