Small firms hit by £1bn ID fraud bill

IDENTITY fraud has affected almost 100,000 small businesses to the tune of £1.3bn, according to new research.

Figures from York-based life assurance company CPP found one in five SMEs admit they may be vulnerable to corporate identity theft owing to lax procedures.

Some firms are being caught out by a loophole with Companies House data processing, with fraud costing businesses an average 13,500 each.

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CPP said fraudsters change company directors' details or the company's registered address by submitting false documents to Companies House. However, Companies House does not verify the documents.

Research showed the majority of SME directors are not aware of these loopholes, which could put them at risk of corporate identity fraud.

Michael Lynch, fraud expert at CPP, said: "Our report demonstrates that corporate identity fraud is a real concern for businesses. It's key that organisations ensure that they have secure methods of storing sensitive information to avoid falling victim to this growing problem.

"The current loopholes in the Companies House system make it worryingly easy for impostors to steal company information, and forge its identity."