Lax security at Companies House has been blamed as a major cause of a sharp upsurge in business identify theft.
But the business register said it was not up to them to check the credentials of new companies.
Coventry-based debt recovery specialist Darren Devoile said rogue businessmen could use the official records as a research tool for their illegal activities.
They sift through public records for information about their victims, and armed with name, date of birth and some legitimate company details can set up entire new business ventures to fleece unwary suppliers. Many companies routinely use the background information on file at Companies House to check the credit records of potential new customers.
Only when bills go unpaid and debt recovery action is begun is the con-trick exposed, says Mr Davoile, whose firm Coltman Warner Cranston handled one similar case on behalf of a group of creditors owed at least £25,000 between them, and believes there could be another in the pipeline for as much as £500,000.
“We only found out about it when I served the victim of the ID theft with a statutory demand for overdue amounts owed to my client,” he said. “He contacted me to say that even though he was named as director of the company he had never traded with the person concerned.”
Later Mr Davoile received a phone call from someone purporting to be the same person as the named director, and quoting the same date of birth.
“Someone obviously wasn’t telling the truth,” he added. “It transpired that the victim’s identity had been acquired by a family ‘friend’ of 15 years standing, who used his details to set the business up entirely without his friend’s knowledge.”
He added: “Perhaps the real issue here is just how easy it is to steal someone’s identity and use it to set up a company.
“I have encountered more cases of identity fraud in the past 12 months than any other time I can remember.”
He said Companies House needed to be more vigilant, adding: “A printed letterhead just isn’t enough to establish that a company, or its directors, are who they claim to be.
“They should be asking to see passports, or other cast-iron proofs of identity, as well as utility bills.”
But a spokesman for Companies House said that even though it was making efforts to eradicate fraud, the law meant they had to take new business registrations at face value, even if they might be fake.