TechnologyAccounting SoftwareIdentity theft on the rise

Identity theft on the rise

Companies House improving security, but leading credit agency still finds more than 100 cases of theft of auditors’ identities

Fresh concerns have been raised about the security of information filed with
Companies House, after a leading credit agency warned that it was now aware of
more than 100 cases of theft of auditors’ identities.

Companies House officials said this week they are pushing through proposals
to improve security following revelations by Accountancy Age in April
of widespread theft of auditors’ identities. But it will be at least two years
before plans to control the quality of data are in place.

Officials said the company law reform bill ­ which would not become law
before 2007 ­ could enable the agency to gain ‘more flexibility’ in dealing with
filed information. One proposal would enable the Companies House registrar to
‘correct’ a document that appears incomplete or inconsistent.

Martin Williams, MD at business credit check agency Graydon, said the DTI had
been warned as many as five years ago of the need to improve ‘quality
assurance’.

A review of Companies House, published in November 2000, highlighted areas
where it should improve its services, especially around actively checking for
incorrect information.

Williams said the recommendations had not been implemented, and Graydon was
aware of ‘around 100 examples’ of accountants’ identities used to falsely verify
financial statements.

‘Where fraudsters have invented auditors’ names, for example, it would be a
very simple job for Companies House to check whether they are fictitious or
not.’

Alan Livesey, a director at fraud detection services business IDS, said he
had found numerous examples of incorrectly entered data regarding disqualified
directors.

‘If accountants wanted to use Companies House as a credible source of
information, then it’s been compromised,’ he said.

A Companies House spokesman said its new online filing system, PROOF, enabled
more secure filing of directors’ information. The DTI said it had taken a
‘number of steps’ to protect companies since 2000.

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