‘Dysfunctional’ Companies House is facilitating fraud, finance chiefs say

Nick Van Benschoten, the director of international illicit finance at UK Finance, and fraud bosses at banks NatWest and HSBC have criticised the online register of UK-based companies.

Mr Van Benschoten said: “Companies House is supposed to be a key part of the information infrastructure underpinning the business environment. At the moment it is a dysfunctional part, and other people cannot compensate for that.

“The Government needs to get it right first time, and then we can help and build on that. But at the moment I’m afraid it’s not an efficient feature.”

The remarks came during a Business, Energy and Industrial Strategy (BEIS) Committee examining fraudulent company registrations, in particular fraudsters’ using victims’ home addresses to register a fake firm.

Fraud directors at HSBC and NatWest said that the lack of checks for people setting up a business through Companies House is making it harder for banks to stamp down on fraud.

Donald Toon, the head of risk threat mitigation at NatWest, said: “We have a real issue here because we are obliged to verify accounts, we look at Companies House data as part of that verification process.

“And then the obligation is then on us to tell Companies House whether there is a difference between what we are told and what is on their database.”

In response to the discussion, Martin Swain, a director at Companies House, said: “I would love to see in three or four years time that we are not getting..negative press coverage.

He added: “That is not where we want to be as an agency, we want to be a preventer of fraud.”

A new Economic Crime Bill is currently going through the House of Commons and proposes major reforms to Companies House.