Companies House considering tougher ID checks

Companies House is considering introducing new checks in an effort to protect consumers and catch out potential fraudsters, Money Observer understands.

Companies House is the government-run register of all active companies in the UK. It provides directorship and address details and in some cases also provides financial results or other information.

In an investigation into the sale of overpriced and illiquid carbon credits and other unregulated investments to vulnerable investors, Money Observer found that although there are authorities who can shut companies down for shady practices, unscrupulous salespeople can largely escape personal consequences by dissolving one firm and quickly setting up another.

These 'pop up' companies might have no physical office, and their directors can even use fake names.

strict guidelines

This is because Companies House has no system in place to verify the identity or address of a would-be fledgling firm.

A spokesperson for Companies House tells Money Observer: 'We work under the strict guidelines of the Companies Act. At the moment we have no investigatory power. We accept everything in good faith so there is no verification of the documents we receive as long as they have been correctly completed.'

However, she adds that the organisation is currently looking at options to enhance the integrity of its listings, and prevent people from exploiting the lack of identity and address verification checks.

The new system could take the form of an 'integrity register', which could act like a 'whitelist' of directors who have proved they are who they say they are.

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