REC warns of active contractor recruitment scam

A contractor recruitment scam involving temporary candidates who don’t actually exist and clients who are equally as fictional, is preying on freelance staffing agencies.

Outlining the scam to ContractorUK, the Recruitment & Employment Confederation said it begins when the ‘client’ contacts a genuine agency, saying they have a role they need filling.

The client (actually the scammer posing as an end-user), typically tells the agent that they already know the name of the contractor who they think would be perfect for the opportunity.

'Not necessarily normal'

Although knowing the contractor which an engager wants is “not necessarily normal”, it does happen with executive-level searches, the REC said, making it not an automatic red-flag.  

A variant of the scam is that rather than pre-identifying the candidate, the ‘client’ gives the agent the assignment brief, only for a suitably-skilled ‘contractor’ to ring up “shortly after.”

Either way, once the ‘contractor’ has supposedly finished the work and invoices the agency, the recruiter pays them, but soon finds that the payment by the ‘client’ never emerges.

'One of our members is a victim'

“One of our members has been subject to this fraud,” says a REC spokeswoman, who declined to specify which sector, such as Computing/IT, the victim agency is in.

“This is not the first time that this kind of scam has manifested itself and we are urging our members to be cautious.”

Recruiters are being recommended by the confederation to check the authenticity of both new clients, such as by visiting where the work is going to be done, and new contractors.

'Due diligence'

But there is certain sophistication to the scam, as the agency which fell for it did do its ‘due diligence,’ which with contractors can include references, ID and Right to Work checking.

The scammers also cover their tracks, because when the victimised agency approached the ‘client,’ there was no trace of them. The ‘contractor’ had also apparently disappeared.  

Parties concerned or targeted by such scams are being directed by the REC to SAFERjobs, an anti-fraud watchdog set up by the Met Police to protect contractors and other job-seekers.

Frustrating attempts to thwart it however, the confederation is unsure why the fraud attempt is contractor-specific, but said it may be due to the high fees synonymous with professional contracting.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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