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Companies House gets new fraud prevention powers

  • 21/03/2024
  • Paul Atkinson

fraud prevention written in a notebook

Companies House is introducing stricter measures to tackle scammers who steal individuals' names and addresses for fraudulent activities. These new and enhanced powers are the most significant change for Companies House in its 180-year history.

One of the most significant changes is the introduction of new rules to prevent fraudsters from creating fake companies. Using a PO Box to set up a company was a considerable loophole that allowed fraudsters to exploit innocent people's details without their knowledge.

Recently, the BBC conducted an investigation that revealed that several fraudulent companies were established using the names of popular restaurants, including the Ritz and renowned chef Heston Blumenthal. These fake firms were part of an identity theft scheme.

The Economic Crime and Corporate Transparency Act has introduced new changes for Companies House. This includes stricter checks on company names and additional power to combat and remove incorrect information. From now on, all companies must provide a registered email address and confirm that they are setting up a firm for a lawful purpose.

Changes introduced include:

  • Greater powers to query information and request supporting evidence 
  • Stronger checks on company names 
  • New rules for registered office addresses (all companies must always have an appropriate address - they will not be able to use a PO Box as their registered office address) 
  • A requirement for all companies to supply a registered email address.
  • A requirement for subscribers to confirm they’re forming a company for a lawful purpose when they incorporate and for a company to confirm its intended future activities will be lawful on its confirmation statement.
  • Greater powers to tackle and remove factually inaccurate information.
  • The ability to share data with other government departments and law enforcement agencies.

Louise Smyth, who runs Companies House, said: "We've known for some time that criminals have misused UK companies to commit fraud, money laundering and other forms of economic crime. As we start to crack down on abuse of the register, we are prioritising cases where people's names and addresses have been used without their consent."

“Now, it will be faster and easier to spot if a fraudster has stolen someone's details. Banks in the UK have also been on alert with reports of a surge in scams. They have been asked to be vigilant about filings related to debt settlements.”

Business Minister Kevin Hollinrake said: “Companies House now has the tools to take a much harder line on criminals who take advantage of the UK’s open economy and can now ensure the reputation of our businesses is not tarnished by the UK playing host to the world’s scammers.”

“The new reforms, which come into effect today (March 4th, 2023), provide further protection to the public from companies fraudulently using their address and will begin to remove the smoke and mirrors around companies hiding behind false information. This will enhance the UK’s reputation as a great and safe place to do business.”

The phased rollout of new powers and requirements is designed to minimise hassle for legitimate businesses. Many changes will be integrated into existing reporting cycles, such as the requirement to update a company's confirmation statement.

Companies House will provide more information to those who need to file their company information as further measures are introduced.

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