How to check a company or person is genuine before you pay

Start with the register

Every limited company in the UK has a public record at Companies House, and it is free to search. Five minutes there answers most of the first questions.

• Does the company exist under that exact name? Fraudsters register names a letter away from a real business, or trade under a name that matches no company at all. Compare the name on the invoice, the website and the bank account with the register.
• When was it incorporated? A company formed a few months ago that describes itself as established, or that is asking for a large payment in advance, deserves more questions.
• Who are the officers and the people with significant control? The register names the directors and the beneficial owners. Search each name for other companies, particularly dissolved ones, and for disqualifications.
• Are the accounts and confirmation statement up to date? Overdue filings, a proposal to strike the company off, or a string of dissolved companies behind the same director are all visible on the record.
• Does the registered office match anything? A registered office at a formation agent’s address is normal. A trading address that does not appear anywhere on the record, or that turns out to be a virtual office when the business claims premises, is worth a question.

Sole traders and partnerships do not appear on the register, which makes the checks below more important for them.

Checks for specific kinds of business

• Financial services, investments and credit. Anyone offering these must be authorised by the Financial Conduct Authority, and its register is public. Check that the firm is on it, that the name and contact details match exactly, and that the firm is authorised for the activity it is offering. The regulator also publishes a warning list of firms known to be operating without authorisation.
• Building and trades. Membership of a competent-person scheme or a trade body can be checked directly with the scheme. Ask for the membership number and look it up rather than accepting a logo on a van.
• Solicitors, accountants and other professionals. Each has a regulator with a public register. A firm that claims to be a solicitors’ practice and is not on the register is not one.
• Charities. The Charity Commission register shows whether a charity is registered, its trustees and its accounts.
• VAT. A VAT number on an invoice can be checked against the government’s validation service. A wrong or invented number on an invoice is a strong signal.

Checking the person

Where you are dealing with an individual, or with the person behind a small company, look at whether the person as presented actually exists.

• Photographs. A reverse image search on a profile photograph shows whether it has been taken from somewhere else. Stock images, and photographs lifted from a real person’s social media, are the norm in romance and investment fraud.
• Digital history. A genuine professional has a trail: a profile that has existed for years, connections who are real, posts that predate your contact. A profile created recently with few connections is a warning.
• Consistency. Does the name on the email match the name on the invoice, the bank account and the register? A request to pay a company’s invoice into a personal account, or into an account in a different name, is the single most common step in payment fraud.
• Contact details. Ring the number on the company’s own website, found independently rather than taken from the email, and ask for the person. Email addresses at a free provider for what is presented as an established business are a signal.

Checking the property, vehicle or goods

• Property. The Land Registry shows the registered owner of any property in England and Wales for a small fee. A landlord, seller or investment promoter who does not appear as the owner needs to explain why.
• Vehicles. The vehicle’s registration, MOT history and tax status are checkable online, and a history check shows outstanding finance and whether it has been written off.
• Domain names. The registration date of a website’s domain is public. A site claiming decades of trading on a domain registered last month is a fraud until proven otherwise.

The warning signs that should stop a payment

Any one of these should pause the transaction until it is explained to your satisfaction, and several together should end it.

• Pressure to pay quickly, or a price that is only available today
• A request to pay by bank transfer to an account whose name does not match the business
• A change of bank details by email, which should always be confirmed by phone on a number you already hold
• Returns that are guaranteed, or that exceed what any regulated investment offers
• Reluctance to meet, to take a call, or to provide a registered address
• A business whose only presence is a website and a mobile number
• Reviews that are all recent, all glowing, and written in the same voice
• Documents, contracts or certificates with errors that a genuine issuer would not make

Payment fraud by false representation is an offence under the Fraud Act 2006, and if you have already paid, report it to your bank at once and to Action Fraud, the national reporting centre. Banks recover a proportion of transfers if told within hours.

When to instruct due diligence

The checks above are enough for everyday transactions. A formal due diligence report is for decisions where the loss from being wrong is large and the counterparty is not fully visible from public records: taking on an investor or business partner, a significant supplier or customer contract, a transaction with an overseas counterparty, buying a business, or lending against assets.

A report goes beyond the register to establish who actually controls the counterparty, its litigation and insolvency history, adverse media in the UK and abroad, sanctions and politically exposed person exposure, connections between the people involved that are not disclosed, and whether the assets or trading history described actually exist. Where the counterparty is overseas, it draws on registers and local enquiry in that jurisdiction. Our corporate due diligence page sets out the scope, and it is quoted as a fixed fee once the counterparty and the question are known.

For an individual rather than a company, such as a new business partner, a prospective tenant of a high-value property or someone about to be given access to family money, the same work is done on the person, within the limits of the data protection legislation and with a lawful basis recorded for it.

If you have already been defrauded

Report to your bank first, then to Action Fraud, and preserve everything: the emails, the invoices, the website as it was, the payment details. Where the sum justifies it, an investigation can establish who was behind the fraud and where the money went, which is what a solicitor needs to freeze assets and bring a civil claim. Our workplace and fraud investigation page covers that work; the first conversation is free and we will say whether recovery is realistic.

This guide is general information about the law of England and Wales as we understand it at the date shown at the foot of the page. It is not legal advice and does not take account of your circumstances. Before acting on anything here, particularly where court proceedings, a criminal complaint or an employment decision are involved, take advice from a solicitor. We are investigators, not lawyers, and we will say so if a question you bring us needs one.

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