HooYu Identifies 1 in 8 Disqualified Directors are Abusing the Commercial Register

HooYu Identifies 1 in 8 Disqualified Directors are Abusing the Commercial Register
16.05.2019 10:51 am

HooYu Identifies 1 in 8 Disqualified Directors are Abusing the Commercial Register

Fraud Detection , Security

Research by fraud investigation technology provider HooYu has identified loopholes at Companies House that enables individuals to register as a director, to run businesses and to enable fraud and money laundering, even after they have been struck-off from holding company directorships.

Research into Companies House data conducted by HooYu showed that of the 6,700 currently disqualified directors, there are over 800 (1 in every 8) that still appear to have an active directorship. The analysis also uncovered over 500 so called “chameleon” directors who have been disqualified as a director, then subsequently made changes to their name or date of birth in order to register a “clean” directorship.

The criminals, termed “chameleon fraudsters”, have been uncovered using graph theory and data visualisation technology in the HooYu Investigate platform to find disqualified directors who illicitly hold an active directorship. This is despite the fact that “chameleon fraudsters” obfuscate their new directorships by subtly altering their date of birth, or the spelling of their name in an attempt to avoid detection.

The current registration processes undertaken by Companies House are enabling criminals to evade detection and are allowing fraud losses to consumers, businesses and the public purse alike, contributing to the estimated £96bn[1] of fraud and money laundering that takes place each year in the UK.

Currently, when regulated firms use Companies House data, they are unlikely to spot chameleon fraudsters as directors are not verified when they register. As a consequence, HooYu is calling for there to be more identity verification and ongoing due diligence to be conducted to eliminate chameleon fraudsters who are currently able to operate undetected.

Richard Osborne, founder of the lobbying group Robust, commented, “Last year I formed Robust to raise awareness of how criminals are abusing Companies House data and our YouGov survey revealed that 84% of business leaders would want to see more robust identity checking procedures carried out by Companies House. This data analysis from HooYu reveals the level of abuse of records at Companies House and underlines our call for the Government to act”.  

In light of the nature of how criminals are obfuscating their identity, many financial service investigators use the HooYu Investigate platform to build a visual graph that reveals otherwise hidden connections to businesses, directorships, shareholders, residential addresses and business premises. 

“Financial institutions and service providers rely on Companies House data as a source for conducting due diligence, preventing fraud, insuring against money laundering and terrorist financing. Until Companies House information is properly screened at the point of submission, and ongoing due diligence is undertaken to remove disqualified directors, it leaves a worrying loophole open to fraudsters, criminals and terrorists for them to exploit. Even more concerningly, we believe our current analysis of Companies House data just represents the tip of the iceberg.” said David Pope, Marketing Director at HooYu.

Related News

Brighterion and Elavon to Fight Fraud with Artificial Intelligence

While the global implementation of EMV chip technology has reduced fraud activity for card payments, the payment’s ecosystem is still battling the threat of new and emerging... Read more »

Refinitiv and Napier to help combat money laundering with improved transaction monitoring solution

Refinitiv has partnered with Napier, a leading anti-money laundering (AML) and intelligent compliance software provider, to offer a next-generation transaction monitoring... Read more »

StreamMind rolls out global confirmation payee solution for banks to comply with new Payment Systems Regulator’s code of practice

StreamMind, a leading technology provider, announced the roll out in Europe of its solution to prevent bank transfer scams, a solution that allows a user to match an... Read more »

Featurespace Launching Adaptive Behavioural Biometrics to Solve Complex Fraud Attacks

Featurespace introduced Adaptive Behavioral Biometrics, which uses in-session behavioral data collected from digital channels in real time to detect and prevent fraud during... Read more »

Yooz leverages Artificial Intelligence to help UK businesses tackle invoice fraud

Yooz, an international provider of intelligent P2P software in the Cloud, today announced the... Read more »

Accuity Launches AI-Powered Financial Crime Compliance Screening to Detect and Prioritise Highest Risk Individuals

Accuity, the leading provider of financial crime compliance, payments, and Know Your Customer (KYC) solutions, has announced its AI-driven account screening capability, ‘... Read more »

Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel