Identity Fraud: Directors and Trustees beware

Fraudsters have been attempting to steal or appropriate the identifying information of Directors, Company Secretaries, Trustees and Audit Partners for the purposes of identity fraud. The latest scams are believed to be making use of digital versions of personal signatures included in a company's accounts, which are available online from Companies House and the Charity Commission.

Examples include:

• A faxed instruction to a bank for a six-figure payment from a business bank account with a forged Director's signature on it, which was paid by the bank.
• An instruction to Royal Mail to redirect a Director's personal mail whilst simultaneously registering for online banking, in the hope that the account details and passwords would be mailed to the fraudster's address.

Luckily, in both of these instances the actions of the people involved resulted in no long term personal or business financial loss. The business mentioned above made rigorous daily checks of its online banking and immediately identified the bogus payment, which was then refunded by the bank. Royal Mail sent a letter to the residence of the Director, questioning whether the redirect was intentional and enabling him to stop it before serious fraud was committed.

Whilst these stories demonstrate a real risk to both businesses and individuals, they also show how precautionary measures can help prevent identity fraud.

10 steps to prevent long-term financial loss

We have compiled a list of ten steps recommended by Clive Owen & Co LLP to help prevent long term financial loss through identity fraud:

1. Discuss with your bank the potential for having two signatures; one for documents in the public domain and one for instructions to the bank.

2. Be vigilant. If you use online banking, log-in regularly to check for any unusual transactions or new standing orders. If you spot anything unusual, contact your bank immediately.

3. Make use of technology to enable timely and accurate bank reconciliation, matching your accountancy software records with those provided by your bank and immediately highlighting any discrepancies.

4. Make a note of the date bank statements, cheque books and credit/debit cards are due to arrive. If they don't arrive on time contact the issuer immediately.

5. Never access any sensitive information from a public computer or an internet access point (in an internet café for example). Shred any documents with personal information on before you throw them away.

6. Ensure any computers used to access online systems are fully up-to-date with anti-virus, anti spyware and operating system (e.g. Windows) updates.

7. Be aware that your mother's maiden name and your place of birth can be discovered by anyone obtaining a copy of your birth certificate, so avoid using the names on your birth certificates as security question answers.

8. Royal Mail should notify you by post if an application to redirect your mail is made. If you are going away get a trusted person to open mail for you.

9. Use passwords that are difficult to guess and include numbers (not your date of birth, age or wedding anniversary). Use a different password for each account and for systems that allow it use other symbols such as - _ and £.

10. Use an online credit referencing service (around £2) to check that you actually initiated all credit checks made in your name (upon application for credit cards, mortgages etc).

Finally, under The Companies Act 2006, Directors can file a service address that can be different to their residential address. From October 2009, only the service address will be available in the public domain.

If you are concerned about identity fraud, would like a free IT security health check or would like advice on any of the above points, Clive Owen & Co can help. Please call Chris Beaumont in Darlington, Gary Ellis in Durham and Terry Doyle in York.