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It was in June, when she went to get a credit check for a mortgage, that the 20-year-old employee of Japanese beauty brand Shiseido realized something was terribly wrong.
“My credit rating was trashed. Someone took out car finance, business loans and overdrafts, all in my name, with my details,” says the employee, who asked to remain anonymous as he still works at the brand. “I apparently set up a chocolate company in the Midlands. “
She was one of dozens of Shiseido UK employees whose personal details were stolen and then posted on the dark web, where data – including names, National Insurance numbers, dates of birth and home addresses – can be bought for as little as £. A batch of 10. Their personal information was used to create fake directorships in 346 bogus companies, which were incorporated by the UK registry, Companies House, in March, April and May this year. The companies themselves had cheated on the address of the empty shops. In online applications for business loans and other credit these were linked to the real home addresses of Shiseido employees, as falsely appointed directors.
The total scale of the fraud is unclear, but experts believe it is in the millions of pounds. Shiseido did not respond to a request for comment the observer.
Big banks are increasingly frustrated by what they see as lax controls at Companies House and are pushing hard for reform. UK-registered companies have played a role in what is believed to be one of the biggest money-laundering scandals, from payroll fraud among NHS suppliers to the Danske Bank case, in which money was smuggled out of Russia and into Europe. Efforts in History.
The government has acknowledged the scale of the problem. A drive to clean up Britain’s business register is a key part of its Economic Crime and Corporate Transparency Bill. The legislation is at committee stage in Parliament, which means it can still be tweaked before becoming law.
“In recent years, the Companies House framework has been manipulated, particularly with the use of anonymous or fraudulent shell companies and partnerships,” Home Secretary Suella Braverman told MPs in October. “It gives criminals a veneer of legitimacy to help them commit crimes ranging from corruption and money laundering to fraud and identity theft. We will improve the role of Companies House and improve the transparency of UK companies.”
While the current version of the bill gives Companies House more power to demand identity checks, experts at the biggest high street banks believe it falls short in two key areas.
First, they think that the fee charged for incorporation should be increased. Company House charges just £12. Those fees are how the registry funds its activities. In the last financial year, the registry’s 1,178 staff processed 750,000 incorporations – about 3,000 for each working day of the year. Company House fees cannot be increased without the approval of Parliament. Banks want to see an additional provision in the bill.
“We think £50 to £100 is quite a reasonable amount. We do not see any appreciable impact on UK competitiveness,” Nick van Benskoten, director of banking lobby group UK Finance, told MPs last month.
Only a few countries charge as little as the UK to incorporate a company: these include Benin and Kazakhstan. In contrast, the average cost of registering a company across Europe is around €300 (£257).
Higher fees will also slow the number of businesses registering in the UK and make it easier to police flows.
Second, Banks says, the bill should give the agency new powers: the ability to launch its own investigations into suspicious activity. Currently, it only investigates existing companies if it receives external reports of identity theft or other illegal practices. It is a reactive register. “Companies House needs to be an active gatekeeper, and the Bill gives it those purposes and some powers. The problem is that it doesn’t go far enough,” van Benskoten said.
Today’s mess can be attributed, at least in part, to well-intentioned reforms brought in by Liberal Democrat politician Vince Cable in 2011, when he was business secretary. The introduction of lower fees and the possibility of 24-hour incorporation has had a dramatic impact: in the financial year to April 2022, there were 635,368 more corporations than in April 1987, according to official figures.
Of the 4.9 million companies registered with Companies House by March this year, experts believe that as many as 20% of the data relating to them may be incorrect.
“It’s been an article of faith in the UK for a long time that cheap and fast is good,” said a source who oversees financial crime at a high street bank.
He said that without a change of mindset by ministers, the promised reforms in the bill would fail: “It’s like you’re spending a lot of money to buy a nice new house but not enough extra to make sure it’s watertight. Know what it costs to run an effective, accurate register and set fees accordingly.”
Paul Monaghan, chief executive of the Fair Tax Foundation, said: “The UK has created the world’s first business ownership register, but there is such a waste that it is open to fraud. You can’t even begin to identify and track tax dodgers.

Graham Barrow, a financial crime expert and self-described “obsessive”, has spent many hours tracing some of the more ludicrous examples of forgery. “A Chinese guy started a food company and listed his business as MP,” said Barrow, scrolling through some of the latest batches of his favorite oddities at the register. He makes a point of tracking down some addresses he believes are known as “farms” for fake companies. “As of 9am this morning, there were 34 companies registered at one address in central London,” Barrow said. “Yesterday it was 252.”
In total, 3,854 companies were registered in the UK yesterday, he added, many of which he believed to be clearly fake: “I don’t think it’s very robust regulation.”
“Thousands of people’s lives are affected by this every week. ‘ASDA Limited’ [not in fact the supermarket] A woman registered at her home address and received kilos of letters every day,” he said.
And it’s not just a lot of mail. People apply for overdrafts and loans, misusing their details to damage the credit history of individuals. There are also international losses for the UK, Barrow said: “It makes us a laughing stock.”
Bankers agree. “There are press reports from the US and German authorities that they see Company House as a concern. That is a problem,” Van Benschoten told MPs. “We think that Company House is an opportunity for the government to strengthen the UK’s international reputation and our future prosperity, But we mustn’t forget the current opportunity cost of this loss of trust. It’s not just consumers; it includes businesses.”
Shiseido is not alone in suffering from this kind of hybrid fraud, involving bricks-and-mortar shopfronts and gigabytes of apparently stolen data.
Conduent, a major US-listed business services company, recently discovered that its employees’ identities had been used to set up a shoe store in Romford, east London, and an ice cream parlor in Westcliffe-on-Sea in Essex. The fraud involved 142 fake companies on Companies House.
An employee at Conduent believes his details were stolen in a cyber attack. While the situation was tense, the employee said the company was supportive and quick to respond: “I knew because they called me, and they clearly explained what they were going to do and how it was going to be handled.”
Staff were offered free credit monitoring and other support.
said Sean Collins, vice president for communications at Conduent the observer His company took the security of its employee information seriously.
“Conduant became aware that a number of current and former Conduant UK employees were appointed as directors of companies with Companies House without their knowledge,” it said in a statement. “We do not know how the underlying personal data was obtained and we continue to actively monitor our environment to ensure appropriate security and resilience.”
One of the reasons Conduent was able to act so quickly, insiders say, was that the open nature of the UK register meant it was easy to find out what happened. Many registers across Europe are steadily going private after years of campaigning by organizations to make the ownership of companies more transparent.
But the company’s fight against fraud and money laundering suffered a major setback last month by cleaning up its registry. The ruling by the Court of Justice of the European Union (CJEU) on November 22 dealt a blow to years of campaigning by tax and anti-corruption groups to make the ownership of companies more transparent.
It found that one of the main provisions of 2018 The EU anti-money-laundering directive, which ordered member states to disclose the identity of company owners on their corporate registries, was invalid.
The CJEU ruled that public access to such information was a “serious interference with the fundamental rights to private life and the protection of personal data”.
Following the ruling, several jurisdictions known to facilitate tax avoidance and money laundering, including Luxembourg, Cyprus, Ireland and Malta, have already restricted access to proprietary information on their registers.
But EU officials are not giving up just yet.
Romanian MEP Ramona Strugareu told tax experts at a conference in Athens last week that she believed there would be a majority in the European Parliament that would push for journalists and civil society to get access to the register – because, she said, it was these groups. Helped uncover major corruption scandals.
here at #CSABOT Beneficial Ownership Council@RamonaStrugariu Makes a legitimate point. It took years for countries to comply with EU anti-money laundering laws (some still don’t). Now that the court ruling has rejected 1 provision, it takes them less than 24 hours to comply. pic.twitter.com/S3FR4wTs8C
— Johann Bernardo Langrock (@JohanLengrock) November 30, 2022
Some countries have kept their registers open, including Latvia, Denmark and Estonia. Keeping a UK register of who owns which companies – even if the information is often incorrect – could be a “positive Brexit benefit”, Monaghan said. And Companies House is free to access and easy to search, unlike many European registries.
Despite concerns about whether the UK reforms will be effective without more resources and greater enforcement powers, that transparency is a strength. “I’ll take free-to-access garbage any day,” Barrow said. “The register itself is the primary source of evidence of suspicious activity.”
A government spokesman said: “The UK already has some of the strongest controls in the world to combat money laundering, but we continue to upgrade our regimes to prosecute criminals.
“Our new Economic Crime and Corporate Transparency Bill will affect the use of vehicles by thousands of UK companies and other corporate structures to facilitate international money laundering, fraud, corruption, terrorist financing and the movement of illegal arms.”
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