The government has announced new laws designed to protect company directors from intimidation, personal harm and the growing threat of identity fraud.
By the end of summer 2018, directors will be able to remove their personal address from their firm’s Companies House accounts, while still ensuring transparency with public authorities such as the police.
Directors will still legally be required to provide their business address, but the government hopes changes to the law will make it more difficult for fraudsters to impersonate business owners and ensure directors feel safe when setting up a new company.
Currently, personal addresses can only be removed once Companies House and the relevant authorities judge there to be a serious risk of violence or intimidation because of the company’s work.
Commenting on the changes, government small business minister, Andrew Griffiths, said: “Through our industrial strategy we have set our blueprint for ensuring we build on our reputation as one of the best places in the world to start and grow a business.
“These new laws will protect new and existing business owners from potential harm and identity fraud, while ensuring we maintain our high standards of corporate transparency.”
The legislation arrives amid concerns that company directors are at an increasing risk of identity theft. By using personal information, fraudsters have been able to pose as directors online, purchasing goods but even diverting payments to fraudulent bank accounts.
According to fraud prevention organisation Cifas, company directors are twice as likely to be the victim of identity fraud and represent a fifth of all recorded cases.
Further research has put the cost of procurement fraud in Britain at £121.4bn every year, with the impersonation of company CEOs a popular route for scammers.
Speaking to Business Advice, Jim Gee, author of the 2017 Annual Fraud Indicator, explained why this specific type of fraud was posing such a threat to firms.
“The fraudsters perpetrating CEO fraud are often sophisticated criminals rather than amateurs trying their luck,” he told us.
“They may have targeted the business over months, building up a picture of who works in the business, reporting lines and the individuals responsible for authorising payments.”
Gee urged all business owners to prepare to be targeted amid the UK’s fraud “epidemic”.
“To reduce vulnerability to CEO fraud, small business owners should put time aside to consider their fraud vulnerabilities, who in the company is responsible for countering fraud on an on-going basis, and whether there is sufficient expertise within the organisation to adequately protect the business,” he advised.
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