IDENTITY THEFT IN THE UK

Our tax blogger earlier disclosed the £47 million Tax Refund Fraud announced by HMRC recently, how that is possible? It may not seem to be identity theft, but it is one type of them and not all of them. So what is identity theft, what can they do? How to protect yourself from identity theft? We Elaga is going to reveal what they do, how they do it, and how you can protect yourself. Read more below....

Identity theft is a serious and rapidly growing problem across the UK. Fraudsters don’t just steal your personal details — they can hijack your entire financial life and business assets, without your knowledge become director of your companies and sell your assets. Sometimes without you even realising it until it’s too late.

Why do criminals steal identities?

With your stolen identity, fraudsters can:

• Open credit cards and bank accounts in your name to rack up debts.
• Take out loans and mortgages that you are legally responsible for.
• Access your existing bank accounts and drain funds.
• Add themselves as directors or shareholders to your company, gaining control.
• Transfer company ownership or sell assets without your knowledge.
• Commit tax fraud by filing false returns or stealing VAT repayments.
• Hijack your postal mail or emails to intercept sensitive information.
• Use your identity for a wide range of criminal activities, international money laundering, putting you at risk of legal and financial consequences.

Real examples from UK cases:

• Criminals adding themselves as company directors to take control of business bank accounts and transfer funds.
• Fraud rings using stolen identities to apply for expensive loans and credit cards, leaving victims with huge debts.
• Fraudsters intercepting official mail to redirect benefit payments or sensitive documents.
• Identity thieves filing false tax returns to claim refunds from HMRC.

The scale of the problem:

• Over 220,000 cases of identity fraud were reported to Cifas, the UK’s fraud prevention service, in recent years.
• Most cases involve impersonation to open financial accounts or commit loan fraud.
• Many victims only discover fraud after being declined credit or noticing strange transactions.

Why is identity theft so common in the UK?

• Extensive digital footprints: Social media, online shopping, and internet banking increase exposure to cyber-attacks and data leaks.
• Publicly available data: UK law requires company director names and registered addresses to be publicly available via Companies House — fraudsters use this info to impersonate or hijack businesses.
• Frequent data breaches: High-profile breaches leak millions of personal details annually.
• Sophisticated fraud techniques: Criminals use phishing, fake HMRC/bank calls, SIM swaps, and social engineering to deceive victims.

Common identity theft tactics:

• Phishing emails and text messages pretending to be from banks or HMRC.
• Fake phone calls pressuring victims to provide personal info.
• Intercepting or redirecting mail to steal documents.
• Scraping social media profiles for personal data.
• Exploiting data breaches with leaked passwords.

How can you protect yourself?

• Use strong, unique passwords and enable two-factor authentication on accounts.
• Regularly shred sensitive documents and avoid sharing excessive personal info online.
• Limit social media posts revealing birthdates, addresses, or ID photos.
• Monitor your credit reports through Experian, Equifax, or Credit Karma.
• Be skeptical of unsolicited calls or emails claiming to be from official bodies.

A New Form of Identity Theft: Using Your Address to Register Their Companies

In our own experience as accountants, we've seen a disturbing rise in what could be called a mutated form of identity theft — not by stealing your name or National Insurance number, but by simply using your home address. Fraudsters register a limited company using your residential address (without your knowledge or consent) and then use that company to apply for loans, credit cards, VAT fraud, or even commit financial crimes. This method is alarmingly effective — and incredibly difficult to undo. Informing Companies House and asking them to remove or correct the address may be possible, but it is often frustratingly slow, sometimes taking months or even years. Companies House, understandably, must verify every claim thoroughly to avoid wrongful deletion of legitimate companies — but that makes the clean-up painful for victims.

Why Securing Your Mailbox Matters

This is why having a secure, private mailbox is more important than ever. Many identity fraud cases — including address-based fraud — begin simply by intercepting or stealing physical mail. If someone gains access to your mailbox, they can obtain official documents, authentication codes, or use proof of address to take over accounts or commit fraud in your name. We've seen clients suffer serious consequences from letters being redirected or retrieved from shared or unsecured mailboxes. Protecting your post is not just a privacy issue — it's a critical security measure. If you can, always use a mailbox only you can access — even if you move frequently or use a registered office for business.

Identity theft can devastate your personal finances and business operations. Staying vigilant and informed is your best defense.

If You Don't Care, Who Else Would Care. Seek Professionl Advice for Best Practice

Whether it's company secretarial services, mail forwarding providers, don’t blindly trust them — many aren't even aware of the new regulations for address providers. The authorities are now cracking down on such non-compliant services. I still don’t understand why people put their trust in providers who clearly do not care about them. Use only services you can genuinely rely on. Please remember: kind words don’t always mean good intentions.

Get in touch for tailored advice and support. We are Elaga Accountancy are well experienced in all UK tax matters. We would be able to provide valid and sensible advice to you as individual or running your business in the UK.

Contact Elaga Accountancy today — we’ll walk you through the process and best practice in protection. We follow mots stringent rules of compliance and data protection. We are fully complaint with GDPR and ICO's Privacy Data Protection in the UK. So you can have most confidence with our services. If you don't care about yourself and your own protection, who else would care. Contact us now.

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