Company directors will be given the right to remove their home addresses from documents filed at Companies House, amid growing concern about an epidemic of identity theft among business owners.
Under new plans unveiled by the Department for Business, Energy and Industrial Strategy, regulations to be introduced later this year will enable company directors to take their personal addresses off the UK's official company register, which is available free of charge to the public to inspect online.
While company law has for some years allowed directors to ask Companies House only to publish details of the registered address of their business such as its office or the office of its accountant many directors do not take up this option, while those who gave their details before this rule came into effect in 2009 never had this choice.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
The easy accessibility of this information has made company directors an attractive target for fraudsters, particularly since they must also provide other basic personal details such as their name and date of birth. Con artists also assume that directors are more likely to have higher incomes or valuable assets.
A honey pot for fraudsters
Cifas, the organisation that operates the National Fraud Database, has repeatedly warned that company directors are being "disproportionately targeted" by fraudsters. In fact, directors accounted for one-fifth of all victims of identity fraud over the previous three years, even though they account for only a tenth of the UK's population, according to data published by the organisation last year.
In frauds where thieves set up false online retail accounts, the identities of directors were used in a third of cases, said Cifas. Mobile phone frauds targeting directors are also very common. The problem is so acute because it is possible to obtain a range of services, including loans and other credit agreements, with only a name, home address and date of birth. The chairman of Cifas has also pointed to Alan Sugar's posting of a picture on social media which showed his bank name and signature as being an unwise move.
The new laws will mean directors have a legal right to remove their personal addresses from Companies House's public database, supplying a business address instead; currently this right only applies where Companies House accepts there is a serious risk of violence or intimidation because of the nature of a business's work. Directors will still have to supply their personal address to Companies House, with the private record accessible by authorities such as the police and the Insolvency Service.
How to protect yourself from fraud
Many company directors are compounding their risk of falling victim to fraud by publishing too much information about themselves online. While many directors are keen to ensure they have a presence on social networking sites and industry directories, as they seek to build business networks, this information can make it even easier for fraudsters to steal their identities. Strive to keep your personal and professional lives as separate as possible, limiting the chances of fraudsters accessing sensitive information.
Sometimes, fraudsters target the business itself, rather than directors. Companies House's Proof service, to which companies can sign up online, notifies directors if someone is trying to change their records in some way (a common tactic for fraudsters) and prevents people from making changes using paper-based forms.
In particular, beware of the growing threat of "fake director fraud", in which a con artist poses as a company director and contacts a junior employee, ordering them to share sensitive bank details or make a financial transfer.
David Prosser is a regular Money Week columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments.
David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor. He has won a number of awards, including the Harold Wincott Personal Finance Journalist of the Year, the Headline Money Journalist of the Year and the BIBA Journalist of the Year. He has also been a frequent contributor to broadcast news, providing expert advice and punditry on radio and television.
For the past ten years, David has worked as a freelance journalist, writing for a broad range of newspapers, magazines and online publications. He also writes a regular column for Forbes, and is a frequent contributor to both specialist and consumer publications.
Pension withdrawals on the rise, HMRC data reveals
Pension withdrawal data has led to some raising concerns over savers ‘raiding’ their pensions unsustainably.
By John Fitzsimons Published
ONS: UK economy recovered from pandemic faster than previously thought
Revisions from the ONS showed the UK economy has grown since the pandemic, while the latest data showed GDP grew in the second quarter of 2023.
By Nicole García Mérida Published