Beware Virtual Addresses

[cjd]

We've had a spate of dodgy looking sign-ups from the Virtual Office address of 145-157 St John Street which turns out to be used by:

"The UK address. 145-157 St John Street, London, EC1V 4PY. According to a BBC report, this is the address used by a company which sells its use as a registered office address. Because there does not seem to be an obligation to check that users of the service are legitimate companies, criminals are attracted to it. According to the BBC, the address is in common use among fake companies operating "boiler room" fake share scams."

http://interfraud.org/ni_british_connection.htm

There's absolutely nothing wrong with the company that hosts these people, but the fact is that virtual addresses can make your company look bad by association. It's a better idea to use a real address - even if it's your solicitor or accountant.

If you're trading online, you must provide a real address where goods can be returned anyway.

 

[DazRave]

Strangely, I was looking into this exact address about 4 months ago when researching a potential competitor. I couldn't seem to find out who actually ran the business at all... and still to this day don't really know who legally owns it.

Thanks for sharing!

 

[Nuno]

I had a thread here a month or so back about a dodgy client wanting to steal photos off t'internet. Seeing that address made me go all deja vuey.

 

[FirstClassVirtualOffice]

Whoever is selling the virtual office service DOES have to by Law (MLR) check out the people and companies using the service.

We are in a real building, owned by Peel Holdings as we are on airport land almost across from the runway. It provides real serviced offices and we run the virtual office service from there. Hopefully people will check out whoever they pay money to, as you would for any service you buy however, the address does not affect other businesses just because a rogue one operated from there, whether actually or virtually based there.

Nobody is going to know about a rogue company because HMRC only reveal the criminals names (and possibly the company names they may have used) once they have been found guilty....and that can take anything up to 5 years to reach court (so says the guy from the criminal investigation team at HMRC who deal with VAT fraud, etc) and unless you happen to know that person or company, you won't ever know who they are anyway.

So by association, real office or virtual, we and our clients sit in the same boat, along with our many well established/well-known businesses in our building, and we remain totally unaffected from a person/company who was done for multi-million pound vat fraud.

 

[cjd]

however, the address does not affect other businesses just because a rogue one operated from there, whether actually or virtually based there.

This isn't an attack on you, VOs provide a useful service and I'm sure that you run an impeccable business. But it simply isn't true that a VO address that has been associated with fraud does not affect other businesses using that address. I can tell you that it does, because in our case it already has - we won't allow sign-ups from that address.

This is a really good reason why VOs should do a lot of due-diligence work before accepting a client - which, by the sound of it, you do.

 

[FirstClassVirtualOffice]

So can you tell us how in your case, it affected something? It's useful to hear such cases.

How would anyone know if an address has been used fraudulently or similar when choosing which address to use? There is no where to check and rule this out but then again, why would you? Just because a real building gets a dodgy tenant doesn't then mean that building is going to be dodgy by association. But if you are concerned, it wouldn't take much to verify it's a decent address or not.

Generally speaking, nobody knows if they are real or virtual tenants so there is no difference between getting an office in a building that once had a dodgy real office tenant and one that had a dodgy virtual tenant? If whoever has spotted the association, lets say through credit checks for one example, they can easily do a further check and rule it out as dodgy (i.e its the person who was dodgy not the address).

I know it's not an attack at us, but its an attack on this service as a whole, which I think is unfair as a sweeping statement none the less. I know you are well-meaning by the way.

I know for a fact it does not automatically affect everyone else at that address, though I do not disagree there may be individual cases that can get caught up where they use an address that was once used for criminal activity.

There have also been criminals using VoIP numbers as a fictitious office number so they can look legitimate along with the virtual address, in fact if anything this rounds it off very well when you have the phone number as well, but I would never say that by using voip numbers it can make you look bad by association because fraudsters are using them.

The thing is, a virtual address is a real address (well it has to be of course) so checking out if it's real has no effect in itself, but checking who are the other tenants associated to it, would be a good idea. Once you see there are some real and established ones, then it's not a dodgy room above a back street shop or whatever, harbouring or supporting (knowingly or not) criminal activity. And even then, nobody can ever stop it 100% no matter what checks you use. It depends how very clever and sophisticated their set up is.

Lots of professional business centres offer this service up and down the country, as well as many hundreds of company formation services - a minority of criminals using it (like they do bank accounts for example) is not going to put most people off. It's more about... like anything else you pay for.....being careful of whose service you are using. If people will just take the quickest easiest option, whereby they don't need to supply any information towards due diligence, then that should ring alarm bells.

 

[cjd]

You're being far too defensive.

The St John address is now tainted by multiple criminal use, anyone googling it will be very wary of dealing with companies registered at it. We have now had a couple ourselves and a series of attempts by various scammers. Hence my post.

VoIP is very regularly used by criminals - in fact a number of ours was used by a criminal gang that got 5 years for fraud. Mobiles are far more often used than any other though, and before that, it was simply landlines. Criminals need to communicate and telephony - and latterly the internet - is the preferred method.

The difference is that potential customers can't link fraudulent use of telephone numbers with the companies that provide them - and therefore can't be put off by the knowledge.

On the other hand, if I'm checking on a new company because I'm thinking about doing business with them, I'm going to be put off if I see that they don't have a real physical address, especially if the virtual one has been linked to several frauds by the BBC. Obviously.

 

[FirstClassVirtualOffice]

But that's one address, and a common one at that, that has been around for years and is very commonly used so is bound to get more criminal hits, and yours was a sweeping statement against the service as a whole.

I will defend a sweeping statement that says 'virtual addresses can make your company look bad by association' when actually, that's not really the case - that's quite over the top to tar the service because of one bad address. You could pick out anything that has had a bad press but it doesn't taint every other service. There are criminals that use a building to run businesses from and engage in illegal activity, and that address equally is not tainted forever either. Like I say, most are sensible enough to see a dodgy address and do a further check. Well of course you would, it's bit like seeing the same surname of a previous fraudster, you'd simply do more checks.

 

[Nuno]

Seems to me the OP set the context in the first paragraph. It was about one particular address. He then expressed an opinion that a real address is better than a virtual one. I'm sure that many, many people doing any sort of due diligence would agree without having a specific reason.

This is one of the things you have to bear when running a legitimate and very useful business in your sector. Other businesses have other factors to consider.

As for doing extra checks; yes this is sensible. However a proportion of searchers won't bother, and a further proportion will search but with a bias. Unfair yes, but that is what happens.

 

[fisicx]

My wife works as a risk manager for a major bank and they do a lot more investigation on a business with a virtual address than they do one with a real address. Many of these addresses are now red flagged.

So if you want as loan, credit, invoice financing or anything to do with money you are far better off with a reall address. A shed in your garden is a better address than a virtual office as far as the banks are concerned.

 

[WillLoxley]

My wife works as a risk manager for a major bank and they do a lot more investigation on a business with a virtual address than they do one with a real address. Many of these addresses are now red flagged.

So if you want as loan, credit, invoice financing or anything to do with money you are far better off with a reall address. A shed in your garden is a better address than a virtual office as far as the banks are concerned.

Well that's interesting. I wouldn't consider a virtual address now unless I really needed a specific location for pr or such.

 

[FirstClassVirtualOffice]

Well several of the large banks provide our clients with overdrafts, bank accounts, loans and finance etc. Plus they open accounts with such as Streamline so clearly not all VO's are affected in the same way. An address may well be red-flagged as may other things on an application and it will equally receive further checks just like any other flagged item on your application. But even then, people using a virtual office get approval and people working from home get turned down.... and that's only after ALL the checks have been done, so a red flag can soon be cleared up.

Of course you cannot beat having the real thing for many reasons, but people who need virtual offices who can't afford an office have to compromise that there will be further checks. But none the less and regardless...they still have to provide their residential home address....which is the determining factor against a person getting finance. The checks are NOT based on the business address for the Ltd Co as the checks are done against the individuals at their home address. They have to provide proof of address only for their home address too.

And as said, many real, established and well known businesses operate from the same building as the virtual office service operates from and they remain unaffected. It's simply a case that you are going to get the occasional premises that suffers more because it's in London and is a bigger outfit so with what is probably thousands of customers over many years of trading, it's quite out of proportion. But hey, anything makes the news these days.

I agree it started out as sating the specific address was the target of the post but then it dwindled to target the service as a whole, putting it out of context and well out of proportion in real terms of how it really is.

 

[Nuno]

By continuing it at length, and so defensively, some people finding the thread on Google (number 3 at time of posting) will think 'no smoke without fire'.
Sometimes on the internet, whether right or wrong, it is best to say nothing after a while.

 

[IanG]

yours was a sweeping statement against the service as a whole.

And he's right - its a challenge to VO providers that a VO which should make your business look better may in fact be counterproductive.

I would think there are numerous examples, you've had bank and financial ones and I would think for each B2B you can cite there are probably a lot more B2C where the C has steered away but you'll never know.

I think we all know the inference here - that legitimate companies are not related to any nefarious use.

However - and this is the bit you appear to miss - they are related _enough_ for it to be a concern for anyone running a business from one.

Is it not the nature of VO - its supposed to fool people in to thinking its real - and sharing a postal address is fairly real.

 

[Talay]

One might consider whether regurgitating what is quite an old story might be construed as simply a quasi spam marketing exercise when the poster has a whole raft of links to their business in their signature.

 

[cjd]

One might consider whether regurgitating what is quite an old story might be construed as simply a quasi spam marketing exercise when the poster has a whole raft of links to their business in their signature.

The way this went, which was pointed out clearly in the original post, was that my company has just had a series of dodgy sign-ups from that address. In fact, we've had two credit card frauds from accounts using that address. A google of the address brings up that page which demonstrates that it is regularly used by fraudsters.

Now, can you agree that any naive start-up might be tainted by using that virtual address? Is it possible that potential customers, banks and suppliers might also google that address? Certainly if a new user of Voipfone attempted to sign up using that address it would now be barred automatically.

It seems fairly non-controversial to those who don't have a commercial interest in providing them, that a virtual address is not as useful as a real address and that at their worst - as in this one - is likely to harm a new business. And - really importantly and probably not known by most users of them - it's illegal to use them for online trading.

They have their uses but those uses are limited and have some important downsides. As this forum is regularly visited mainly by new start up businesses who regularly ask the question of how to obtain a trading address when working from their kitchen table I thought it worth mentioning.

And given that I have getting on for 15,000 posts on this forum over many years perhaps you might re-consider your accusation of spam and link building?

 

[njsemc]

We use the St John Street address as our registered office address without any problems that I am aware of. We do however also have a physical address.

I think there are thousands of companies using the address and almost certainly most of them are perfectly legitimate.

Incidentally - the St John Street address is owned by the Made Simple Group, which is the company that we originally used for our Ltd Company incorporation.

 

[fisicx]

The St John Street address is red flagged by all the major fincial institutions. Not saying you aren't legit but that address may well affect your credit rating.

 

[Karimbo]

I use this for my VERY legitimate business, I work from home and needed a registered address service that would be used for compliance with companies house requirements (without putting my home address on there).

I have bought the service via made simple group who used this address. Made simple group are changing from this address to another one in N1 (I beleive). Perhaps they are doing some housekeeping - removing the dodgy companies off their service starting from a clean slate.

Anyway, just a reminder - I really need to up my game and get some real office space. It's going to cost me £5k p.a. minimum for a single bedoom size office - but I guess it's required.

 

[Karimbo]

oh and I'm also a voipfone customer

Though i used my home address on the site.

 

[Karimbo]

Peeps, I had a thought about this the other day, I have some very big clients who may credit check their suppliers and if they find my company with a EC1v 4PW address it could affect me negatively.

MSG are moving addresses so hopefully my business should not be red flagged. But I am looking for a more stringent registered address service that will scrutise their applications.

When I formed with MSG it was literally no questions asked formation - I don't know if they even wanted proof of ID or anything.

Any recommendations for my discerning formations companies? For the time being I can use the MSG registration and use a custom registered address. Accountants I've spoken to don't want their address to be used as a registrar.

 

[Excel Expert]

I have a blanket policy of not dealing with companies where the true address is in question. It doesn't take much checking either - sticking the postcode / address in to Google will bring up a load of stuff.

One potential client had very specific images on his website that showed a fleet of sign written vans outside an office building with a huge company logo on it. His postcode etc tied to a very average terraced house. There wasn't an industrial estate within about 5 miles of them. I will deal with companies of any size but alarm bells ring when someone who is clearly running a spare room operations tries to pass themselves off as a multi-million pound business.

 

[Payments Guy]

ALL addresses can carry information that is used in decision making by suppliers, financial institutions etc. You are clearly at more risk when an address or building is used by multiple customers, simply because of the numbers game. This is not specifically a VO issue.

I recently had a case where an application from a retailer in a multi-tenanted retail centre was flagged up by a merchant bank as potentially fraudulent. It was sorted, and the customer received their chip and pin machine a few days later, but a number of points arose from this.

1 - Royal Mail had the location marked on their database as one single business address. This place has been in multiple tenancy for around 15 years, but it is an ex mill. RM had never changed the details.

2 - A serious case of card fraud had taken place some years ago. One of the (ex) tenants had been involved, and police etc got involved. As a result, what is called a V-MAS flag was put on the address. It since turns out that applications for merchant services from the approximately 40 retailers here had struggled due to the link between the flagged account and the fact that the RM database had never been updated.

Naturally, it was a good opportunity to go do some canvassing, and I'm now working with 6 more retailers at the same address. Bonus!

 

[WillLoxley]

I have a blanket policy of not dealing with companies where the true address is in question. It doesn't take much checking either - sticking the postcode / address in to Google will bring up a load of stuff.

One potential client had very specific images on his website that showed a fleet of sign written vans outside an office building with a huge company logo on it. His postcode etc tied to a very average terraced house. There wasn't an industrial estate within about 5 miles of them. I will deal with companies of any size but alarm bells ring when someone who is clearly running a spare room operations tries to pass themselves off as a multi-million pound business.

well, I guess everyone big themselves up, no? Or was it actually relevant? I ask because I may just use my home as a business address .

 

[Excel Expert]

There is "bigging up" and there is "bigging up". This was a fleet of about 10 brand new fully sign written vans outside a large three floor office block on a very modern looking office / industrial park and in reality it was someone of a similar size to myself i.e. operating out of a home office.

It is relevant for me (not everyone I know) for two reasons

Firstly, I need my clients to be honest and open from day one. If I start an application to run/manage a business process I need the real picture. If something is presented to me that is incomplete or a lie then both me and the client are wasting our time, because sooner or later it will come to light and we will end up arguing about additional work and payments. So if I think a company is not completely open and honest I wont work with them. This has saved me loads of grief in the past.

Secondly I base my payment terms on the size of the company. For larger companies I will take a 50% deposit and a final payment on completion, with smaller companies I will take a smaller deposit but I will set out staged payments i.e. when I get to a point "A" in the development I will get £x, at point "B" I will get £y and so on. What I base as being a larger company or a smaller company is basically based on gut feeling and publically available information

 

[Karimbo]

Excel Expert, I would be passed off too if I was working with a company that pushed the boundaries that far. You can imply your "big-ness" by have a very well designed website, multiple phone numbers, ticketing system instead of regular email etc.

But lying by producing fraudulent images is just wrong

 

[Excel Expert]

I personally have no problem with "bigging up" but there are boundaries.

You can big yourself up with a sophisticated website and by being professional. Even bragging about large clients can big you up without basically telling lies.

 

[TODonnell]

A virtual address is what it is. People use them primarily because they don't want to put their home address on their website and stationery. They're also useful if your home or trading address isn't stable.

Can they be used by crooks? Yes. But if the provider asks for proof of ID and forwarding address upfront, this will filter out a large percentage. Then it's down to the provider being vigilant about unusual enquiries pertaining to the client and co-operating with local authorities. And also stating upfront that the address can't be used for immoral or illegal purposes.

I was interested to note that a previous poster said an (or some) address(es) are red-flagged by banks. I would guess a virtual address might count against you if you set up a business account for a traditionally dodgy business purpose (I dunno, payday loans?) and it started to have unusual traffic.

As a private person, I set up a company years ago using another virtual address provider and there was no problem with getting an entry-level bank account. Statements are sent to my home address and I think my credit rating is/was good. We regularly forward bank statements for many of our clients.

Your mileage may vary.

 

[fisicx]

I was interested to note that a previous poster said an (or some) address(es) are red-flagged by banks. I would guess a virtual address might count against you if you set up a business account for a traditionally dodgy business purpose (I dunno, payday loans?) and it started to have unusual traffic.

No, when the financial does a credit check the address is one of the key indicators. You may well get the loan or credit or whatever but that doesn't mean the automated systems aren't keeping an eye on you. You could find all of a sudden the cash flow ceases because the VO address loses it's rating. A business with a real address will generally find it easier to get credit than one with a virtual address. This info comes straight from a bank with a credit portfolio of over £6billion pounds.

 

[TODonnell]

That's interesting. Someone told me that personal credit scores were no longer impacted by the address.

I never understood that, as, if you're going to give someone a loan of cash money, you'd like to know everything you can about them and draw up a risk profile accordingly.

i.e. Lives in a private mansion for 30 years and paid back a 50k loan last week? Come on in, sir!

 

[fisicx]

When the automated systems run through their check they look at a whole range of inputs. If you provide an address where there is an existing flag that don't know if the flag belongs to you or some other business. This means the system will initiate a manual review which may well delay a loan or overdraft. If you need invoice financing then your customer's credit rating is checked - if they are with a dodgy VO address this will again raise flags.

It's the automated systems that flag up issues. The manual check will give you the all clear but this can delay payments - which is no good on a Friday afternoon when your contractors all need paying.

 

[Jet Virtual]

The Virtual Offices Addresses we provide are in real buildings and we encourage potential clients to come and view the offices as well as the staff.

Also because our offices are mostly in big buildings it is normal to have multiple businesses using the same address.