Dark Money Files director Graham Barrow says the number of companies being set up with fake details is “a national scandal of epic proportions”. The Mirror reports the cash expert said: “You need more proof of ID to get a library card than to set up a company."
Registering a limited company costs just £12, and Mr Barrow added: “About 16,000 new companies are registered every week, and I would say that around 3,000 of those will result in letters being sent by Companies House congratulating people on setting up a new company they know nothing about. Most people will just throw those letters in the bin, which could lead to problems down the line.
“These are burner companies and used by criminals, just like burner phones. It costs £12 to set one up, and then if you can get an automatic business overdraft of £8,000, that’s a pretty good return on investment for the criminals.”
Mr Barrow has welcomed Government promises to reform Companies House in the Economic Crime and Corporate Transparency Bill, but fears ID checks will not stop the criminals. He said: “At last we are going to require people to prove they are who they say they are. It's a step in the right direction.
“But at present we allow anyone anywhere in the world to incorporate a company, so someone in the Donbas might register a UK company. Even if they provide ID verification, if the company turns out to be bogus, what are we going to do about it, go to the Donbas region and arrest them?"
Multiple residents in Ashmore Close in Peckham have found their addresses being used by companies and directors they’ve never heard of. The worst hit is Holger Sell, who has had 20 companies registered at his home since late May.
“A lot of the post I get is from banks. These people are setting up companies and trying to get loans which could be secured against my house,” said Mr Sell.
“When I complain to Companies House they want me to produce evidence that I am the owner of the property by seeing the land registration and deed to the house, plus a utility bill, yet they let anyone open a limited company by just paying a registration fee with no further proof of address or ID required.”
Another resident in Ashmore Close, whose address has been used without permission, is Emma Jones, who last week received a debt collection demand for £703.10. She said: “It’s ridiculous that Companies House requires no proof of ID or residence. I have raised a complaint with them but feel powerless.”
The Government admits there are “gaps in the company law framework” and says it will reform Companies House. “The Registrar of Companies’ powers will be broadened so that they become a more active gatekeeper over company creation," said a Companies House spokesperson.
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