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Changes to the Appointment of Directors in a bid to cut down fraud

26 August 2015

The process for the appointment of a director and information filed has been queried by the business sector for many years given the increase in identity fraud.  In a bid to reduce fraud carried out by those that can currently obtain very sensitive data about directors which is recorded at Companies House from October 2015 some of the information will be restricted.   Currently unless you opt to use a service address your full residential address, your full name and your date of birth can be obtained by a simple Companies House search.  This is information that can easily be used by those who wish to undertake a fraud and take on the identity of someone new.  

Changes from October 2015

From October 2015 upon the appointment of a director only the month and year of a Directors date of birth will be shown which will at least go some way to reducing the information publicly provided.   Although with so many users on Facebook and other social media sites obtaining the day of birth is still not beyond the realms of being obtained.    We personally believe that there should be no reason that the date of birth needs to be required at all on public record and this information should be obtained by writing to the company to request it.   It appears however that this information is not being restricted for existing Directors who will not be subject to this disclosure unless they make a point of requesting a change. 

Also changing on the same date is the requirement for a Director to countersign his/her appointment form, a insignificant change considering many Directors have been appointed electronically using just 3 pieces of data such as eye colour, passport number and mothers maiden name.    Companies House will now be relying on  the fact that the company has stated that the Director has agreed to act and a letter will be issued to the new Director appointed stating this is the case and to contact if appointed fraudulently or in error.     A major flaw here seems to be that if the fraudster has used the wrong address  to appoint the Director in the first place, how does this achieve anything? 

It is hard to see how these areas in respect of the Appointment of Directors will reduce fraud and given the data that currently exists to verify existence surely Companies House should be looking to verify using a means that tests the reliability of the residential address.