Fraudsters and jokers trying to join the UK’s corporate register under fake names such as “Darth Vader” and “Santa Claus” will be blocked under plans to force directors to provide identification – but campaigners have said the measure is unlikely to stop determined criminals.
From autumn next year, individuals incorporating a new company at Companies House will have to provide ID if they are a director or a “person of significant control” (PSC), usually a significant or majority owner of a company.
Companies House has long been criticised over a lack of checks and was described as “dysfunctional” by the anti-fraud leader at trade body UK Finance in 2022.
Concerns about flaws in the corporate register include fraudsters using fake names to disguise their identity or registering addresses unbeknown to the real occupant.
Directors have been registered in the name of “Adolf Tooth Fairy Hitler” and “Judas Superadio Iskariot”, without being questioned.
Such tactics can be helpful to criminals engaging in financial crimes such as credit fraud.
The previous government attempted to address this via the Economic Crime and Transparency Act 2023, which set out plans to tighten up the accuracy and reliability of data filed to Companies House.
Campaigners for corporate transparency gave a cautious welcome to details of planned changes but warned that they would not be a magic bullet for tackling economic crime.
“Britain’s lax corporate law has provided secrecy for criminals and kleptocrats around the world for far too long,’ said Duncan Hames, a former MP who is now director of policy at Transparency International UK.
“Historically, a major reason why those looking to remain in the shadows chose to incorporate shell companies here was the complete absence of checks on directors’ identities.
“Making it a legal requirement to prove who runs and owns entities incorporated in the UK is a major step forward in the fight against financial crime.”
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Under the new rules, existing companies will have a 12-month grace period to provide ID when their “confirmation statement”, an annual disclosure outlining their ownership, is due.
Companies House, a state-funded agency, will be able to strike off companies and directors who file false information under the plans, which will apply to its database of 5m companies and 7 million directors.
Graham Barrow, of the Dark Money Files podcast, has consistently exposed some of the more egregious failings of Companies House to provide legitimate data, including the submission of obviously fake names.
He said requiring ID was “long overdue”. “It will stop the examples of idiots and people doing it for a laugh. The people who register as Darth Vader, Jesus Christ and Santa Claus,” he said.
“It’s the right thing to do, but we need to be careful about expectations.”
Barrow added: “These [organised criminals] are skilled at hiding their identities and it’s not hard to find people who are broke and vulnerable and will, for £500, put their name on a company used for fraud.”
He said criminals were already able to pass banks’ ID checks and that the same requirement at Companies House was unlikely to prove a barrier.
Barrow said a more effective measure would be to force every company filing data to Companies House to have a nominated individual with a UK address, registered to a government portal.
“Criminals can get round anything, but at least make it hard for them,” he said.