Fraud Management & Cybercrime , Fraud Risk Management , Training & Security Leadership

Scam Companies Flourish in an Ocean of Breached Data

Expert Discussed Need for Enhanced Verification, AI Tools to Detect Fake Companies
Graham Barrow, director," The Dark Money Files"

The U.K. Companies House registration portal adds about 4,000 companies each day. But 20% of those brand-new companies - or about 800 of them - are scams. These fake businesses are being created from an ocean of stolen high-quality data related to real people, making it hard to spot the fraudsters, said Graham Barrow, director of "The Dark Money Files" podcast.

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"If you start creating companies in the names of those real people whose data have been breached, then you can spread the connections out across a very wide network of different names. And that makes the investigator's job that much harder," said Barrow.

For example, the U.K. experienced two major data breaches last year, in which at least 2,000 names were compromised. Criminals used those names to establish companies in the U.K. They cleverly situated the companies at empty retail premises and created LinkedIn profiles for fake employees. After reviewing addresses and job references, Barrow said, he was able to identify 1,500 scam companies to remove from the U.K. Companies House site.

Barrow said banks put too much focus on meeting regulatory and compliance requirements and instead should invest in tools to detect scam companies - and stop the flow of criminal funds. "Most vendor activities are centered around meeting the regulatory requirements without necessarily impacting the effectiveness of the flow of criminal funds," he said.

In this video interview with Information Security Media Group, Barrow discussed:

  • The lack of verification checks for new companies;
  • The role that AI can play in identifying companies created using deepfake technology;
  • The regulatory changes needed to improve verification checks.

Barrow has worked in senior roles across global banking, markets, corporate, private, retail and wealth management. He has a deep understanding of the worldwide financial crime/AML landscape and in-depth experience in the design and implementation of effective global scam prevention plans.

About the Author

Suparna Goswami

Suparna Goswami

Associate Editor, ISMG

Goswami has more than 10 years of experience in the field of journalism. She has covered a variety of beats including global macro economy, fintech, startups and other business trends. Before joining ISMG, she contributed for Forbes Asia, where she wrote about the Indian startup ecosystem. She has also worked with UK-based International Finance Magazine and leading Indian newspapers, such as DNA and Times of India.

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