Insolvency Practitioner identity fraud and scam websites

IPA Insolvency Practitioner newsletter AML Digest, April 2023

Contents

• David Holland, Chief Inspector and IPA Money Laundering Reporting Officer
• High-risk countries for money laundering purposes: Enhanced Due Diligence
• Proliferation Financing
• Ongoing monitoring of AML matters in an appointment
• SAR reporting
• Licences from OFSI
• Reporting misuse of bounce back loans
• NCA Amber Alert: High Net Worth Individuals and Tax Evasion (member login required to view)
• AASG alerts (member login required to view)
• Regulation 18 risk assessment reviews
• Reporting of material discrepancies of Companies House records
• Economic Crime Levy
• OPBAS Sourcebook
• How the 2017 Money Laundering Regulations have evolved
• ISS AML training
• OFSI webinar

There is always a risk that the identity of an IP and/or their firm could be used fraudulently. We have recently seen an increase in fraudulent websites purporting to be a firm that in reality does not have a website. We therefore remind all members to be extra vigilant and to regularly check their online identity, including all company interests, is correct and is not being misused. You should also ensure that any online records containing your information match the online Insolvency Service IP register. Any practitioners with limited web presence, and/or with dormant or little used companies, are more likely to be targeted, and you should regularly complete a web search and also check Companies House records. 

Examples of identity theft in practice that we have seen include the taking of a company name, which was part of an existing large group, and the creation of a new website which targeted victims who lost funds in previous investment frauds. We have also seen examples where creditors have been specifically targeted to advise them of being eligible for additional compensation once liquidations have been closed. An individual has even tried to create an insolvency appointment and sent correspondence to creditors using an Insolvency Practitioner’s identity, falsifying documents and creating a similar email address used to agree claims. We are also continuing to see practitioners’ names unlawfully added to websites to try and give credibility to Google’s advertising restriction on lead generators.

Via our AML updates, we have sent around several examples to members of the various schemes to be mindful of, and the latest examples highlight how criminals target what is seen as growth area where individuals can be exploited. The predicted increase in insolvencies is seen as a potential growth area with increased risks of individuals looking to exploit this.

Members are advised that they should try to protect their web content by having clear ‘Terms and Conditions’ pages on your website which explicitly details what you own and what your policy is about anyone copying the content. This will assist in being able to take action in the future. As a regulated individual, insolvency practitioner websites should comply with all the requirements of the Provisions of Services Regulations, and it might be beneficial to link to an individual’s entry on the ‘Find an Insolvency Practitioner’ area of Gov.uk.

If any members become aware of any issues of this nature, they should immediately report to the relevant authorities such as the Police, Action Fraud, FCA (if services are being offered without the correct FCA permissions) and the Insolvency Service, and submit a Suspicious Activity Report. You should also contact the IPA at regulation@ipa.uk.com to inform us and also to advise us of any other general concerns about website content which you consider does not look right or may bring the insolvency profession into disrepute. To assist with helping the general public identify fraudulent websites, IPs affected have found it useful to flag up the issue by posting a page on the IPA’s dedicated Fraud and Scam alerts webpage. Prompt highlighting of the issue on different social media platforms means that the scam websites created have a reduced lifespan.