Company owners should check their details on Companies House at least once a quarter to protect against fraudsters targeting the official registry to clone identities.
Confirming their advice to FreelanceUK, safety officers at CPP Group said that company owners hit by identity fraud faced an average bill of £13,500, which such a spot check could have avoided.
But this potential cost to recover from fraud is a conservative estimate, as it was calculated before the discovery of a loophole in Companies House's data processing.
According to CPP, fraudsters have been able to change company directors' details or the registered office address by submitting false documents to the registry.
Under current systems, Companies House does not verify the validity of paper documents submitted to it, including those requesting a change to a company record.
Moreover, and also owing to a lack of resources, an existing business director is not notified by the registry if new documents for that director's company are filed.
Seeming to respond to the concern, Companies House has introduced Proof - Protected Online Filing, which ensures secure e-filing and a ban on paper forms.
It has also made a service called Monitor available, which ensures existing directors are alerted as soon as specified company documents are added to the registry.
Yet only one out of ten companies is signed up to Proof, perhaps explained by the almost nine out of 10 who said they were not aware of security holes in the registry.
More positively, only 2 per cent of companies interviewed by CPP said they had been a direct victim of corporate identity fraud, though a fifth admitted they felt vulnerable.
For defence, the group's head of identity protection advised companies to check their registry details once a quarter to ensure they were accurate and had not been cloned.
Michael Lynch added: "The current loopholes in the Companies House system make it worryingly easy for imposters to steal a company's information".
Jun 4, 2010
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