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Corporate Identity Theft

To-date identity theft has largely been associated with consumers rather than businesses, yet theft of a corporate identity is one of the fastest growing threats that businesses face. Companies House estimate that corporate identity theft cost British businesses £50 million in 2005. Experts predict that this will increase to £700m by 2020.

Corporate identity theft is very similar to personal identity fraud. Criminals simply alter the details of UK registered firms by filing fake documents with Companies House. They can then impersonate those companies and use their credit to obtain goods and steal their assets. At the small end of the scale, criminals use the company’s identity to buy goods such as mobile phones and computers.

More seriously, bank accounts have been emptied and incidents of company lorries being diverted mid transit to a new address and the goods taken have been reported.

As Companies House handle more than 7 million documents concerning changes to a company’s name each year, it’s easy to see how fake documents can enter their system undetected. Companies House advise all businesses to check the details they hold to make sure that they are correct and have not been altered by someone else. They also offer two systems that will help protect companies. The first is the Companies House Monitor system, an email alert system that warns the password holder when any changes to the company details are made. The second is the Companies House Protected Online Filing, or PROOF, this enables companies to file certain forms in a secure environment.

Fraud experts also advise companies to ensure that they follow good security practice. For example:

  • Ensure robust IT security systems are in place and updated regularly. Check that computer passwords are secure and that employees do not write them down.
  • Dispose of all company stationery (e.g. letterheads) and company financial details (e.g. bank statements) safely.
  • Check prospective employees’ CVs and take up references as corporate identity theft is easier if there is an insider to obtain the relevant information and/or documents.
  • Where possible, purchase all variations of your company name on the internet to ensure that websites that look similar to your own cannot be created and that contact cannot be made with your customers from an email address that looks legitimate. Register both .com and variations.

For those companies that are affected by corporate identity theft, it is not just a financial loss that they suffer but also their reputation is likely to suffer as customer confidence is damaged.

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