You may well have heard about Heston Blumenthal's 'Meat Fruit', you may even have tried it. This is a dish he created that does an incredibly convincing impression of a mandarin (complete with stalk and leaf) but is in fact essentially a savoury chicken liver parfait.
So, what does chicken liver parfait have to do with the latest scam exploiting the lack of verification checks and investigative powers at Companies House? In both cases, all is not quite as it may first appear.
As recently reported by the BBC, a new fraud scam has been hitting restauranteurs in the UK. The companies targeted are connected to restaurants including those run by the likes of Heston Blumenthal and Alexis Gauthier. The list of restaurants affected runs long and even includes the restaurant at the Ritz Hotel.
We have now become familiar with the modus operandi of fraudsters involved in email phishing scams. It is a hallmark of such scams for the fraudster to register and use an email address almost identical to a legitimate email address with which the recipient will be familiar and trusting. Similarly, in this new scam fraudsters are setting up so-called "clone" restaurant companies with very similar names to real businesses, often with a slight misspelling such as an extra letter.
This tactic has allowed fraudsters to open bank accounts in the name of the newly registered company and withdraw money from overdrafts, as well as make high value orders from suppliers which are delivered but never paid for.
It is currently very simple to register a company in England & Wales. Limited information is required and, if done directly with Companies House rather than through an agent, the fee is just £12. While it is necessary to identify at least one director and one shareholder when registering a company, again, limited information about the individual is required. It appears that fraudsters have therefore been able to use information found on social media profiles or through data leaks to name innocent parties as directors without their knowledge.
This is just one example of the methods being used by fraudsters and it highlights the vulnerability of the current system, something Blumenthal himself highlighted in his recent comments on the scams targeting his restaurants.
Much needed reform is on its way and to be delivered by the Economic Crime and Corporate Transparency Act 2023. Changes will include the requirement for companies to register an "appropriate address" (not a PO Box for example) and an email address, identity verification checks for individuals who register companies or make filings at Companies House, and greater powers for the Registrar to investigate potentially fraudulent company registrations. More information on the forthcoming Companies House reforms can be found on our website here.
In our campaign, Navigating Risk Horizons 2024, we talk about the challenges posed to businesses by external threats and how the risk posed by fraud is evolving with technological advancements. We also talk about the pre-emptive steps that can be taken to adapt and protect businesses.
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