Accountants' identities stolen by fraudsters to win credit

Accountants are being targeted by fraudsters, who are stealing their identities to legitimise the accounts of bogus companies in an attempt to win huge volumes of credit.

Link: Loophole lets fraudsters steal IDs

The names of unsuspecting accountants are being used to verify bogus financial statements being sent to Companies House, Accountancy Age has learned. These seemingly healthy, but fictitious, statements could potentially be used to fool credit agencies into handing out excellent credit ratings.

Martin Williams, managing director of Graydon, one of the big five business credit check agencies, said his firm had come across ‘several’ falsified sets of accounts.

‘They are stealing real accountants’ names and addresses and putting them in the fictitious and cloned accounts and balance sheets,’ said Williams. ‘They are stealing identities.’

Williams pointed to several companies that Graydon had discovered had exactly the same financial statements. All five company accounts seen by Accountancy Age had exactly the same profits of just over £1.5m and turnover of nearly £10m.Companies House has a ‘disclaimer’ on its website, which says it is unable to ‘verify’ company information: ‘We accept all information that companies deliver to us in good faith and place it on the public record.’

A Companies House spokesman confirmed it had received complaints on this matter but said it was only concerned whether disclosures met the Companies Act. He said if there was evidence of fraudulent activity, parties concerned should contact the police.

Richard Biddle, partner at Biddle Matthews chartered accountants, has been the victim of a bogus accounts scam. He said the issue was brought to his attention by another business information agency, D&B. ‘We told the institute and our insurers this to bring it to their attention,’ he said.

Biddle added that it was a problem in his area and other accountants had been drawn into the scam unwittingly.

Bromley-based Crane & Partners also appeared as the registered auditor of another suspect company. Partner Graham Atkin said his firm was ‘equally surprised to appear on the set of accounts’ and that unless an organisation such as Graydon had expressly been in contact his firm ‘would not know’ of its involvement.

In order to gain such credit ratings, scammers buy a series of dormant companies, falsify the accounts and then submit those accounts to Companies House. The companies are then used to apply for credit for the scammers before they disappear.

In several of the cases, the dormant companies had been purchased from Paramount Company Searches Limited. Neil Joseph of Paramount said there was ‘not really anything’ it could do and that it had to ‘do what Companies House does and operate in good faith’.

Williams added that the fact that credit check agencies could discover such scams through scrutinising the vast swathes of Companies House data, meant the battle against fraud had swung notably against fraudsters.