Huge increase as corporate identity fraud hits SMEs

Research conducted by life assistance company CPPGroup Plc (CPP) has found that the most common stings are to apply for a corporate credit or debit card in the name of the business or to fraudulently order goods on the company account.
Troublingly, small companies who have been victims believe that it was often someone previously employed by the business or an associate of theirs who committed the crime. Lapses in data security and limited compliance with the Data Protection Act 1988 contribute to this insider fraud.
To legitimise their claim, fraudsters typically – and very simply – change the company’s office address by submitting a false AD01 change of address form to Companies House.
Worryingly, Companies House does not check details of paper documents for validity, instead accepting them from imposters in good faith and registering the new details publicly. As directors and company secretaries aren’t contacted to verify their details, they often remain in the dark about the fraud taking place.
The majority are unfortunately unaware of this loophole, mistakenly believing that Companies House checks and verifies the details of documents filed with them.
CPP Identity fraud expert, Danny Harrison said: “Small businesses are particularly vulnerable as they often don’t have the systems in place to protect themselves or the resources to draw on if they do become a victim. With identity theft on the increase, it is essential for SMEs to recognise the potential threat and take steps to ensure their business is protected. If they do suspect they have become a victim they should inform their bank or local police.”
Although 61 per cent of SMEs owner believe that corporate identify fraud is on the increase, ignorance of identity fraud is high.
Over 40 per cent of SMEs surveyed say they are not aware of company identity fraud as a crime and more than half don’t consider themselves to be at risk.
According to Companies House statistics, although 1,048,527 SMEs have signed up to the Companies House Protected Online Filing (PROOF) Scheme, that leaves more than half of the 2,455,000 registered SMEs unprotected.
The additional security provided by PROOF is recommended to stop the fraudulent change of registered office address and change of director or company secretary, which can be a forerunner to company identity fraud.
Top tips on protecting companies from identify fraud are:
  • Limit access to company sensitive information to only key employees
  • Make sure all company sensitive information is securely stored and only transferred using passwords and encryption in case it is lost or delivered to the wrong recipient
  • Ensure that company staff are not able to remove sensitive documents from the office
  • Sign up for corporate identity theft protection with CPP
  • At Companies House file information online (WebFiling), submit all papers online (PROOF) and subscribe to an alert system that notifies companies when changes to their details are made (Monitor). More information about these services and combating identity fraud can be found at