In 2020 alone, the National Crime Agency estimates that a vast £78m was lost due to cloned company crimes. As not all frauds are reported, we suspect that this figure could easily be far greater.
How Does The Cloned Company Scam Work?
The concept is relatively straightforward. Criminals will establish companies with almost identical names to genuine trading or finance businesses. They will then approach the businesses’ customers and ask for payments, which will go straight to the fake company.
These fraudsters can be tricky to spot. Not only are all communications and transactions online, but they also take great care to accurately copy the website and documents of the real business. This means that all payment instructions can appear to be totally genuine.
If you are ever contacted by a company and asked to make payments to a different bank account than usual, we highly recommend conducting research before going ahead. Always double-check by phoning the company on a number that you are familiar with.
How Is The Government Cracking Down?
The Government has finally taken note of these online criminals and has put measures in place to tackle the issue. The Companies House Register now has more power to challenge the names of new businesses, meaning that any names that could be used to facilitate such crimes will be rejected.
If the Companies House Register suspects that a name could be used for crime or suggests a connection with an international institution or foreign Government, they are within their right to ask for the name to be changed. Should a company fail to comply, the disputed name will be removed from the Register and replaced by the company number.
When dealing with a new business, don’t forget to check their details on the Companies House Register. This will allow you to check whether the registered address, directors and accounts are as you expect.