The National Crime Agency estimates that £78m was lost in cloned companies scams in 2020 and that is probably an underestimate as many frauds are not reported.
Criminals set up companies with names that are nearly identical to genuine trading or finance companies and then approach the customers of the genuine companies asking them to pay the fake company instead. With all transactions and communications online this form of fraud is easier to fall for.
The fraudsters will take great care to copy accurately the documentation and website of the real company so that instructions to pay to a different bank account appear genuine. If you are asked to make payments to a different bank account, always check by phoning your supplier on a number with which you are familiar.
The Government is finally tackling this issue by giving the Companies House Register more powers to challenge names of new companies. Any name which could be used to facilitate certain crimes will be rejected.
The register will also have powers to require existing companies to change their names if the name could be used for crime or suggests that the company is connected to an international institution or foreign government. Where the company fails to comply, the disputed name will be removed from the Companies House Register and replaced by the company number.
When dealing with a new supplier always check the Companies House Register to see if the details of its registered address, directors and accounts are as you would expect.