Contractor job scams are lying in wait, from browsing to application and beyond

Contractors have faced their fair share of challenges during the coronavirus pandemic, most obviously finding that furloughing and freelancing don’t really mix, don’t always pay and don’t ever seem to get prioritised by policy-makers, writes Keith Rosser of JobsAware.

Latterly, the once-perceived fix to divisive and now underway IR35 reform -- umbrella companies -- have been under the spotlight too, culminating in a brief encounter with the Finance Bill that wasn't to be. Regulation for that sector did not make the cut, but it has left an impression on those same policy-makers, which will likely influence the future Employment Bill. 

Having mostly navigated the covid-upended labour market, and having dealt with bitter regulatory disappointment (whether it’s from the near miss of umbrellas being regulated; the very prospect of umbrellas being regulated, or the new off-payroll rules affecting limited companies since April), contractors could be forgiven for thinking that they MUST now be past the worst of it.

But just when a seemingly nice-looking contract could be a possibility, at least four major scams lie in wait to trip up the unsuspecting, covid-fatigued, IR35-weary contractor. They’re not straightforward and they do ruin livelihoods, so beware:

1.Fake Job Scams

Meet our contractor, Mr JT. T. Bill.  

Well Mr Just Trying To Bill first has to actually find a job advert that is both genuine and accurate, before he can succeed in his goal of invoicing!

In the post-covid labour market (and it is market which recruitment agencies are describing as candidate-short), there are a range of practices designed to reel ‘JT’ in.

Be aware of this sad but true statement -- a legitimate recruitment agency can post a job advert they do not have permission to advertise, or for a vacancy that has closed, simply to generate candidates by encouraging applications.

This can be hard to identity and difficult to stop. And not just if, like JT, you’re a bit too focussed on the money! The rub is that the state regulator DOES require agencies to have permission and for the role in the advert to be genuine -- but it’s hard to evidence.

At the darker end of the spectrum, fake recruiters and outright fraudsters do exactly the same – they harvest personal details from JT and other contractors, simply to sell on or exploit.

We recommend checking contract openings, job vacancies and the like at source, to be reassured that what you’re submitting your details for is a genuine work-reward opportunity.

Seen an advert you’re just sure about? Air any specific concerns you have with our team too, here at JobsAware. We launched this year in conjunction with law enforcement and UK government, to help protect people looking for work, and keep those in non-permanent work safe and secure.

2.Advance Fee Fraud - Pay for Services

Following JT’s initial application, matters don't get much easier.

A common ploy targeting him and other contractors is the "You're a Sure Cert for the Role." Except, you need an additional qualification (“pay here to get it”) or a better CV (“pay here to get it”) or whatever else you don’t have (always -- “pay here to get it”).

Of course, the role JT is being told he’s perfect for probably never existed, and now suddenly he’s paying through the teeth to clinch it.

Be aware -- the number of fake job adverts online has grown 70% during the covid pandemic. Worse still, a massive 74% of work-seekers have reported applying for at least one job they later did not believe ever actually existed! Again, specifically while coronavirus was raging.

Before the pandemic, and no doubt returning soon in our estimation, scams involving high-end roles were common. These would dangle the work but tag on hefty visa or insurance costs, often catching out niche contractors to the tune of between £5,000 and £20,000.

JT, who’s a techie, should be on this guard because some industries he could contract in are more vulnerable than others to this advance fee fraud/ pay for services scam. The most-affected are Oil & Gas, Construction, and Accountancy.

Increasingly, LinkedIn is being used by fraudsters who set up fake profiles and design tailored fake roles to match the CV of JT and other contractors. In fact, via the online business network, we have seen contractors pay for fake visas, insurance, training, even background checks, such as Disclosure & Barring Service (DBS). 

3.Payment Intermediaries

Let's say JT reads the advice above, and steers safely through the application stage. A step closer to that all-important billing stage!

But he then must contend with intermediaries. During lockdown, recruitment companies had to implement Key Information Documents, which include essential information on pay, rights, contracts, and umbrella companies. This document must be provided early on to the worker and is a breach of legislation not to do so.

The information contained in a KID is designed to help contractors make choices, especially around pay. But right now, many recruitment companies still do not offer KIDs and not enough temporary work professionals like JT are reporting this rule-breaking to the regulator.

Also in the intermediary space, one of the biggest issues for contractors continues to be some recruitment agencies acting in league with umbrella companies, without letting their contractors know!

JT and other contractors should remember -- recruiters can have approved lists based on objective criteria and exception policies. But all too often, we find that the list is based on insider-style trading. Reports of collusion between recruiters and umbrella companies can be reported, and we’d encourage them to be reported to our team.

4.Payroll Scams

Should JT get to the point of an actual assignment, well unfortunately there are still a range of additional scams lying in wait to make his invoicing dream impossible! Among them:

  • Start-up companies use the expertise and efforts of contractors but never pay them
  • Fake entrepreneurs convince contractors into taking assignments and often keep them going with promises of payment.
  • Tax, loan, and other financial scams perpetrated by ‘umbrella companies,’ often catching contactors completely unaware.

For JT and other contract professionals, it is a constant challenge to completely understand what is happening when a job-related process takes an unexpected turn, or worse, an underhanded turn. For these atypical workers, there is limited to no regulation to protect them and unfortunately, some trade bodies can have a vested interest.

Our belief is that what is needed to make a genuine change is a greater ‘voice’ for non-permanent workers, together with industry, business-led action. Remember, our team is currently working closely with UK government -- and actual companies -- to identify ways of improving the professional temporary work sector. Already, we can offer free help and advice to contractors with issues and concerns around but not limited to the four scams outlined above. We want to grow our resources with nothing less authentic than the voices of you, JT and others striving to make their way, and their living, in the freelance and contracted work space.

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Written by Keith Rosser

Keith Rosser is a labour market expert with almost 20 years working in hiring. Currently a Group Director at Reed, the UK's largest family-owned recruitment business, and Chair of 2 joint UK government and industry bodies: the Better Hiring Institute and JobsAware.
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