PSC directors 'twice as likely to be defrauded'

Personal service company contractors and other people who direct their own incorporated business are more than twice as likely to be the victims of identity theft, a probe shows.

The visibility of such individuals’ details on Companies House is largely to blame for the ‘disproportionate targeting’ of them by fraudsters, found the probe into three years of data.  

Their photo likely being available via a media or online presence -- itself a goldmine of personal data -- explains why they are also more susceptible to impersonations; not just fraud.

In fact, director identities are used to obtain an abnormally high number of online retail and mobile phone accounts, found the probe by Cifas, which runs the National Fraud Database.

This implies that fraudsters know that applying for a lot of accounts in one fell swoop does not raise a red flag, because directors of companies often apply in bulk, often if they have staff.

Another way fraudsters fly under the radar when singling out directors (19% of them are victims but they comprise just 9% of the population), is to obtain credit checks on them.

“There will always be more publicly available information about you if you run your own business compared to other individuals,” says Cifas chair Lady Barbara Judge.

“[And] directors who fell victim to fraud were likely to be younger than other groups who were impersonated. Nearly a third of director-level fraud victims were in their thirties.”

So contrary to popular belief that fraudsters prioritise older people, it is younger individuals who typically have a larger digital footprint who are homed in on, if they are a ‘Ltd.’

“Company directors [are urged] to do as much as possible to separate their personal and company personas,” Lady Judge said.  

“Limit the personal information you share on social media and professional networking sites, and proactively check your credit file and your accounts.”

She said the quicker that victims spot their details have been used fraudulently, the easier it is to limit the damage caused.

But “fraudsters are happy to play the long game,” said Judge, who is also the chair of the Institute of Directors.

“Falling victim to an identity crime can be a traumatic, frustrating and lengthy experience. Although in most cases you are not liable for the funds, it is the hours it takes to rectify the situation that has the greatest impact on victims.”

Co-authored by Lexis Nexis Risk Solutions, the Cifas report was recommended by Lady Judge as worthwhile reading for Lord Sugar.

In a self-described ‘social media outburst’ about his tax affairs which led him to tweet a photo of his personal cheque payment to HMRC, the tycoon remembered to blank out his bank account details, but left on show both the name of the bank and his signature.