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Company Directors and Identity Fraud – A Legal Update

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The information contained in this article is for information purposes only and is not intended to constitute legal advice. If you require further information our team would be more than happy to assist you. Please contact us at [email protected] or call us on 029 2009 5500 to speak to one of our team.

It is estimated that company directors are twice as likely as other members of the public to fall victim to identity fraud with criminals targeting Companies House as a means of accessing personal data. Currently, directors are required to provide details such as their full name, date of birth and residential address to Companies House, a publicly accessible database of all registered companies in the UK. This high volume of publicly accessible personal data has meant that directors are being disproportionately targeted by identity thieves. As a means of trying to prevent this rise in identity crime, the Department for Business, Energy and Industrial Strategy has brought into force Companies (Disclosure of Address) (Amendment) Regulations 2018 (“Regulations”).

Matthew Sutton, Corporate Director of Greenaway Scott takes a look at these new Regulations and how they will impact company directors.

Prior to the enactment of the Companies Act 2006, directors’ residential addresses were made publicly available on the Companies House register. The 2006 Act brought in changes which sought to change this so as to protect private information from being publicly disclosed, however, as the changes made in the 2006 Act did not apply retrospectively, directors whose addresses were already detailed on the register were not protected.

Removing private information from the Companies House register, particularly residential addresses is no easy task and currently requires a director or an agent acting on their behalf to make an application to the court to have the information removed which can be a time consuming and often costly exercise.

The changes brought in by the new Regulations should now make it easier for directors to have their residential address permanently removed from the public record providing them with some form of protection against rising identity crime.

Here is an outline of the changes brought about by these new Regulations:

  • A director or company secretary whose residential address is filed at Companies House can now apply under section 1088 of the Companies Act 2006 to apply to have the address made unavailable for public inspection without having to demonstrate that they have met any of the specified criteria. One example of the criteria which previously had to be met was that the director had to show that there was a serious risk of intimidation or violence, associated with the company’s activities, against that director or against a family member. In addition to this it was not even possible to apply to remove an address before 1 January 2003. Both of these hurdles have been removed by the 2018 Regulations.
  • Regulation 13 (as amended) provides for the registrar to make residential address information unavailable for public inspection pursuant to applications made under regulation 9. Where there remains a requirement for an applicant’s current address to remain on the register, the new rules provide that the usual residential address will be replaced with a service address. Where there is no such requirement, the registrar will suppress all elements of the address except for the first half of the postcode or, where there is no such postcode in the address, information denoting an equivalent or larger geographical area.
  • A company may now apply to have the residential addresses of all members, former members or the subscribers to its memorandum of association filed at Companies House (before or after 1 January 2003) to be made unavailable for public inspection. The 2018 Regulations do retain the test in the 2009 Regulations requiring the company to demonstrate that there is a serious risk of violence or intimidation to these persons or anyone living with them at the relevant residential address.
  • A person who has registered a charge and whose residential address is filed at Companies House (before or after 1 January 2003) can now apply to have the address made unavailable for public inspection. Again, the 2018 Regulations do retain the test in the 2009 Regulations and the person will need to demonstrate that there is a serious risk of violence or intimidation to the person or anyone living at the residential address because of the activities of the company subject to the charge.

The register at Companies House was made free to search online in 2015, meaning that it is now much more widely used than ever before. Consequently, concerns became prevalent about the availability of personal information that was made available on the register. Although this information can be of real practical use to those who are trying to find out information about a company, it should not be used as a vehicle for abuse by exposing people to a risk of harm. The new Regulations seem to have at least attempted to deal with these concerns and will hopefully provide some protection to directors and their families.