'Wild West' at Companies House aids fraudsters to set up firms

Criminals are finding it easy to set up firms and rip off the public because of lax checks at Companies House, where all UK firms must register their details, business leaders and fraud experts warned this weekend.

Ros Wright, chairman of the Fraud Advisory Panel and a former director of the Serious Fraud Office, said Companies House was a ‘Wild West’ because it carried out ‘only minimal checks’ on firms registering online.

More than 500,000 businesses have registered in the UK in the past 12 months. About a third did so online.

It costs firms just £15 and is cheaper than using company registration agents, who are bound by Money Laundering Regulations. These require them to carry out checks, including obtaining proof of a client’s identity and address.

Wright said: ‘It is easier to register a business in the UK than almost anywhere else.

 ‘Companies House only does basic checks and little to verify the information submitted. The abuse of incorporation to commit fraud can have a profoundly negative impact on the economy, ripping off suppliers, creditors, customers and the public purse.

‘We would like to see far more stringent checks. It is a Wild West out there.’

The Association of Company Registration Agents has called on Companies House to do the same money laundering checks as its agents or withdraw the online service. Spokesman Phil Vibrance said: ‘The Government built a secure fence against crime with money laundering regulations, then ripped half of it down with this.’

A spokesman for Companies House said: ‘We make every effort, under existing limitations, to make sure the register’s integrity is maintained. Our digital service is efficient and cost effective. It is part of the Government’s agenda to streamline business.’

However, Phil Orford of the Forum of Private Business said: ‘Some of the Government work on simplifying rules seems to cut corners, creating a loophole for fraudsters.’ 

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