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http://news.bbc.co.uk/1/hi/business/4427684.stm

Corporate identity fraud worsens

Corporate identity theft is costing UK industry as much as £50m a year as fraudsters adopt more audacious tactics to rip off companies, a report says.
Fraudsters pose as company directors by registering at Companies House so they can appear legitimate to suppliers.

They then take advantage of firms by ordering goods they never pay for and later selling them on.

The report by business advisory group Vantis said smaller firms were just as vulnerable as larger ones.

Once tactic involves falsely claiming to have bought a legitimate company with sound credit records and lulling suppliers into dealing with the alleged new owners.

The phoney businessmen then take hold of goods delivered, sell them and vanish.

Electronic answer

One of the most common techniques used is to fool Companies House into changing the registered office address.

It is an ever present problem and one that is being taken increasingly seriously

Jonathan Hoffman, Vantis

Goods are then delivered to the "new" address and by the time suppliers become aware that they have been defrauded the tricksters have already fled.

Another ploy involves a minor change to the registered name of a company, allowing fraudsters to obtain credit or goods by persuading suppliers that the business is a branch or offshoot of a legitimate company.

One solution to this, Vantis says, is to subscribe to "Proof" at Companies House, which is a protected online filing service that cuts the likelihood of falling victim to fraud.

Proof users tell Companies House that they will file only electronically, and that documents that claim to come from them should be rejected.

"There is a new emphasis now to encourage all registered companies to move to an electronic format to help reduce the threat," said Jonathan Hoffman, a partner at Vantis.

"It is an ever present problem and one that is being taken increasingly seriously."

Checklist

Mr Hoffman advised firms to reduce the risk of fraud by adopting a few simple procedures:


Regularly check your company details at Companies House to ensure they are correct.

Sign up for the electronic filing "Proof" system at Companies House through which information is filed online with an electronic password.

Also sign up to "Monitor" at Companies House, an email alert system, which will warn the password-holder when any future changes to their company details are made.

But do not rely solely on Companies House records to determine whether to supply goods or offer services on credit.