Bogus firms registered to 16 addresses in one Worksop street

The government says rules will be tightened at Companies House

Neighbours in a Nottinghamshire street have been shocked to discover their addresses have been used by a bogus company director to set up fake firms.

Sixteen addresses on the same road in Worksop were among scores used across the country to register new companies over one weekend.

All of them have been set up in the name of a 23-year-old Chinese man called Rong Yang.

A financial crime expert has told the BBC it is part of a "scandalous" fraud.

Graham Barrow, of the Dark Money Files blog, said fraudsters were taking advantage of the fact that firms could be registered to any address in the UK using the government's Cardiff-based Companies House website by anyone without proof of identity.

Mr Barrow told BBC's Radio 4's You and Yours programme there was a growing problem with criminals establishing sham firms to open bank accounts to launder money and take out loans and overdrafts they do not intend to repay.

The government said it was in the process of changing the law to make verification of identity a requirement for setting up a business with Companies House.

It said it wanted to stop "criminals, kleptocrats or terrorists" abusing the system.

People in the street in Worksop discovered the fraud when letters from Companies House arrived at their homes which congratulated Rong Yang on setting up firms, including private security companies, trailer parks and demolition contractors, at their addresses.

'Mind-boggling'

John, 70, who has lived in his housing association flat for 16 years, said: "I'm amazed and very shocked this could happen to an ordinary person going about their day-to-day life.

"Why choose me?

"The law needs to be changed to protect people."

John, 70, said he was shocked and amazed his address had been used

His neighbour Janet said she had spent hours on the phone to Companies House trying to explain what had happened.

She said: "I got these two letters [to Rong Yang].

"What the hell is this about? It's mind-boggling.

"They picked on the wrong woman. I'll Rong Yang him when I get my hands on him."

Mr Barrow said he had not seen a more extreme abuse of Companies House

Mr Barrow said he observed the multiple companies being registered to Rong Yang in real time in Worksop as well as Leicester, Luton and Harpenden.

He said: "It was unbelievable. Instantly it's criminal because the same person does not register companies to every house in the street - or every house in two streets next to each other.

"That is just stupid and clearly not legitimate.

"In all the time I have watched company registration at Companies House I have never seen something so obvious and egregious.

"It's the most extreme example of the abuse of Companies House I have ever seen."

"It fills me with dismay the ease with which people can circumvent our company registration rules.

"It's an absolute and utter scandal and at the moment it appears to be escalating."

Mr Barrow said fraudsters often used stolen credit cards to pay the £12 registration fee for the online process, which takes about 20 minutes.

There were 775,000 companies registered with Companies House in 2022 and it was estimated 20% - 155,000 - were fake.

People can apply for a court order to remove a major shareholder in a business or person of significant control from their address, but it could cost up to £400.

Business minister Kevin Hollinrake said a change to the law would help stop address fraud

Minister in the Department for Business and Trade Kevin Hollinrake told the programme: "It's terrible for the people involved - those people in Worksop - and I would like to apologise to them.

"All this is going to change. We have been preparing this legislation. It has been making its way through the House for a good period of time now.

"It's absolutely right we make the UK an easy place to do business and grow business at low cost.

"We don't want to change that but we do want to change that for people who are criminals or kleptocrats or terrorists.

"We know they abuse our open economy."

He said the Economic Crime and Corporate Transparency Bill was due to become law in mid-2024.

He added: "In the future every single director or officer, in fact anyone who files any documents on behalf of a company will have to verify their identity so we know exactly who they are so we won't get these people like Rong Yangs who abuse these sanctions.

"You will be committing a criminal offence if you file documents falsely which sounds like it's what's happened in these cases."