The registration of a limited company is a very simple process in the UK, costing just 12 quid for all.
It is every fraudsters dream, as you only need basic information like your full name and office address - things that are easy to fake, reports the Mirror. The result of this is that thousands of fake companies are formed, on what one expert calls a "scandal of epic proportions".
One street in the UK that has been hit the hardest by this epidemic is Ashmore Close in Peckham, South-East London. Holger Sell, who lives on this street, has had a whopping 20 companies registered at his home since May this year.
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Holger said: "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.
“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.”
Frankfurt-born Holger, has discovered 54 companies that have been registered in his street of only 56 homes. He continued: "To set up a company in Germany you need to show bank statements, passport, utility bills and set out the nature of the business. Here, there’s nothing.”
A number of the companies set up with Holger's address come under the same name, Edward Solomon, but has varying dates of birth to hide the scam. For one company, Coding Bitcoinmining Ltd, Solomon was born in May 1985, according to the details filed at Companies House.
For the other companies, Solomon has been born in May 1990, August 1990, May 1986, May 1990, July 1989 and July 1987. The alleged fake Solomon also appears as the director of companies registered at other homes in the street of Ashmore Close, again with different dates of birth.
Holger has been victim of the scam one too many times, and he emailed Business Secretary Kwasi Kwarteng to highlight the "great distress" he is under after this ordeal. The homeowner added: ""We have been in touch with Companies House pretty much weekly, but we received no help, as we got told that there are currently no ways to stop this from happening.
"My question to you is how is this even allowed in the first place?"
Graham Barrow, a dark money expert, has described this mass of companies using fake details as a "a national scandal of epic proportions”. Graham said: "You need more proof of ID to get a library card than to set up a company.
“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.”
Graham has cautiously welcomed Government promises to reform Companies House in the forthcoming Economic Crime and Corporate Transparency Bill, but he fears that ID checks will not be enough to stop the criminals.
He continued: "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? We need a requirement for every UK company to have a person living in the UK at the address where they say they are living.
"It does not have to be made public but Companies House should have these details.”
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