How to prevent identity fraud

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IAS prevent identity fraud data protection companies house

Directors are at high risk, but there are new ways to protect your data at Companies House from identity fraud, as the IoD’s Information and Advisory Service (IAS) explains

 

In April fraud-prevention service Cifas revealed that 174,523 cases of identity fraud had been recorded in the UK during 2017. It noted that a number of victims had been scammed repeatedly.

This type of crime can have lasting ramifications for you and your business. If a loan is taken out fraudulently in your name, for instance, this could damage your credit rating and make it difficult for you to obtain finance of any kind.

If this risk isn’t enough to make a business leader stop and think about who might have access to their personal information, then a 2017 report by Cifas and LexisNexis Risk Solutions surely is. Summarising the findings of a three-year nationwide study, this states that “nearly 19 per cent of identity-fraud victims were directors”, even though they comprise less than nine per cent of the UK population.

Data and Companies House

This situation may well have been exacerbated by the fact that fraudsters could readily obtain details about directors by checking the register kept by Companies House. This public record is useful if you want to, say, check the background of a potential business partner before signing a contract with them (the IoD’s Business Information Service can perform such due-diligence searches for you).

But it could also be argued that such a resource is not so much a chink in the defence as a wide-open door for fraudsters. The Cifas/LexisNexis report prompted the government to announce new disclosure rules, which have just taken effect, to make life harder for criminals. If you’re a director, the following details about you will now be available via Companies House: name; nationality; occupation; month and year of birth, rather than date; a correspondence (service) address; and a home (residential) address.

Any director can now request the removal of the latter address from the public record. Previously, this was possible only when Companies House and the relevant authorities judged that there was a serious risk that the firm’s activities could result in violence against, or the intimidation of, its officers. You can replace this with a different contact address to ensure that your company meets its legal obligations. The IoD’s Office Solutions service (iod.com/services) can provide advice on setting up such an address.

Proof positive

Criminals are still able to “hijack” a business by changing information about its directors and registered office, which could enable them to make fraudulent purchases in the company’s name. To safeguard against such unauthorised changes, you should join the Proof (protected online filing) scheme run by Companies House. Signing up to this free service will ensure that certain paper forms – including those informing of changes to a firm’s officers and to its registered office – will not be accepted.

Taking such basic steps to protect yourself from identity fraud could ultimately save you from becoming a statistic in next year’s Cifas report.

Visit gov.uk/companieshouse for further information

How the IAS can help you

The Business Information Service (BIS) is accessible by email (businessinfo@iod.com) or phone: 020 7451 3100

The Directors’ Advisory Service (DAS)can give guidance by appointment, either face to face at 116 Pall Mall or over the phone: 020 7451 3188

The legal helpline can answer quick queries about a vast range of issues: 0870 241 3478*

The tax helpline can give callers advice on both commercial and personal tax matters: 01455 639110†

IoD members are entitled to 25 enquiries a year to the BIS; four sessions with a DAS adviser; and 25 calls to both the legal and tax helplines. For further details, visit iod.com/information or email businessinfo@iod.com

* Quote your membership number
† Quote your membership number and reference number 33337

About author

Ryan Herman

Ryan Herman

Alongside his work for Director, Ryan has written for SportBusiness International, VICE Sports, Populous, Audi and Gallop Magazine and was previously editor of Sky Sports Magazine.

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