Companies House gets new powers to tackle fraud on its register

Companies House has been given new legal powers to combat fraudsters who use other people’s addresses to fraudulently register companies.

Addresses of UK residents have been entered without their consent as correspondence addresses in the company register, when in fact they have no connection with the company in question.

Fraudsters, often based in China, use the address to apply for loans or defraud customers into believing they are a UK-based company.

Often, the first residents learn about this is when they begin receiving tax demands, invoices, and other letters in the name of the business.

Money Mail has reported on the case of a Swansea street where 18 different homes had Chinese and Japanese companies registered at their address.

Until now, the only rules for an address registered with Companies House were that it “must be a physical location where notices, letters and reminders can be delivered to the company” and that it must be in the UK.

But starting today, businesses will not be able to use a PO box as a registered address and will also have to provide a registered email address.

Companies House will have greater powers to consult information submitted to the register and request supporting evidence, including “tighter” checks on company names.

Those companies that register will also need to confirm that they are forming a company with a “legal purpose” when they incorporate.

Companies House said it would also have greater powers to address and remove factually inaccurate information, as well as the ability to share data with other government departments and authorities.

New criminal offenses and civil penalties will be introduced for those who breach the rules, and Companies House said its priority was to “clean up the register to remove details of those named without consent”.

The measures were introduced under the Economic Crimes and Corporate Transparency Act 2023.

Companies House chief executive Louise Smyth said: “We have known for some time that criminals have been misusing UK businesses to commit fraud, money laundering and other forms of economic crime.”

‘As we begin to crack down on registry abuse, we are prioritizing cases where people’s names and addresses have been used without their consent. “Now it will be much faster and easier to report and delete personal information that has been misused.”

Business Minister Kevin Hollinrake, who wrote an article for the Mail on Sunday about the Companies House reforms last year, added: “Companies House now has the tools to take a much tougher line on criminals who take advantage of the open economy of the UK and can now ensure that the reputation of our businesses is not tarnished by the UK playing host to the world’s fraudsters.

“The new reforms, which come into effect today, provide greater protection to the public against companies fraudulently using their address and will begin to remove the smoke and mirrors around companies hiding behind false information.”