Confidentiality Surrounding Directors' Home Addresses Increases Business Risk
London, Septmeber 2008, Graydon UK a credit referencing agency today warned that new European Union legislation designed to protect human health and the environment could combine with new UK Government legislation to further erode the quality and quantity of information available to businesses seeking customer credit references based on information filed at Companies House.
The new "EU Registration, Evaluation, Authorisation and Restriction of Chemical" legislation, known as REACH, aims to manage the risks from chemicals and to provide safety information on the substances used in manufacturing processes.
The legislation is being phased in over an eleven year period and aims to safety test around 30,000 chemicals used in manufacturing processes which have not previously been subjected to tests of this kind.
However, the legislation is also likely to lead to an increase in the number of company directors applying to Companies House for Confidentiality Orders, which will prevent credit risk assessment agencies from gaining access to their home addresses, details of which are an important component of the credit scoring process.
Confidentiality Orders of this kind are most likely to be sought by Directors of companies who believe that they may be at risk from violent objection to the activities of their companies. Firms involved in animal experiments for medical research purposes will sit alongside chemical manufacturers as businesses where Directors will seek protection of this kind.
The new “extra protection” Confidentiality Orders will be introduced as part of the Companies (Disclosure of Addresses) Regulations amendment to the Companies Act 2006, which currently allows credit reference agencies to gain access to Directors' home addresses for credit scoring purposes but prevents the address detail from being passed to companies seeking credit reference information on customers and borrowers.
Martin Williams, Managing Director of Graydon UK, says: "There's no doubt that Directors of companies conducting legal and legitimate business have the right to feel protected by the state against risks to their safety.
"However, legislators also need to take into account the interests of businesses and financial lenders who depend on the information provided to credit reference agencies by Companies House as an essential part of their credit policy decision making process.
"There's no doubt that this latest piece of legislation further erodes the quality and quantity of information available to the public via Companies House. This is a long-term trend following the disappearance from Companies House of full sets of audited accounts on the large majority of companies.
"The Government has claimed that it expects around 15,000 company directors to apply for additional protection preventing credit reference agencies from accessing their home addresses. However, with the REACH legislation and a likely resurgence in animal testing activity on the horizon, the true number is likely to be much higher.
"This additional layer of confidentiality is unnecessary and could cause untold damage to UK businesses through warping the flow of information available to those making credit policy decisions, including those in firms conducting business activities which may seek Confidentiality Orders in the first place."
For further information contact:
Stephen Finch / Giles Robinson
Weber Shandwick Financial
Phone: 020 7067 0705 / 020 7067 0734
Email: email@example.com / firstname.lastname@example.org
Graydon UK Limited
Phone: 020 8515 1400
Notes to Editors:
About Graydon UK
Graydon UK is one of the leading database information providers specialising in credit risk management. The company helps clients reduce the uncertainty of doing business by providing a complete, differentiated and high-quality package of credit risk management services. Graydon provides access to credit information and reports on companies in more than 130 countries worldwide. The Graydon group is owned by Atradius, Coface and Euler Hermes, three of Europe's leading credit insurance organisation. www.graydon.co.uk
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