Contractor umbrella company cloning ‘getting worse’

Umbrella company cloning to commit fraud is getting worse not better, with more imposter service providers setting up on Companies House in just the last few days.

Speaking about an alert it issued on Friday, the FCSA said two additional brollies now have ‘copycat’ outfits trying to trick the brollies’ partners into wiring funds to their bank accounts.

'Getting worse'

“We’re aware of a number of attempted cloning incidents. This form of ID theft…does seem to be getting worse,” FCSA’s Chris Bryce said yesterday to ContractorUK.

The chief executive of the Freelancer & Contractor Services Association, Mr Bryce said its online alert had been triggered by a “couple” of new clones, joining the 13 already formed.

“They all use the same technique,” he said. “They masquerade as well-established businesses, copying branding, websites and have nearly indistinct names from the [authentic umbrella].”

'Transfer funds outside the UK'

One authentic umbrella to be cloned, Clarity Umbrella Ltd, knows the single-letter technique all too well.

“The [imposter] company is using an email address with one ‘L’ missing from the word ‘Umbrella,’” explained Clarity’s manging director Lucy Smith.

Taking to LinkedIn to warn contractors and agencies, she added: “The clone has even been using my name within their emails!

“And they’ve taken and amended our documents and are now trying to get agencies to update our bank details to a TransferWise bank account, being used to transfer funds out of the UK.”

'Never via our contractors'

Another bonafide umbrella company, Orange Genie, says it is aware of the “potential for us to be targeted” too, just as other genuine brollies have “unfortunately” been targeted already.

“To our contractor workforce and agency partners, [we say] if you are in any doubt about if a communication is from [us], please get in touch with…your usual contact [who you know].”

Orange Genie’s Damon Cochrane continued: “If we make any changes to our [bank account] details…we'll inform our agency partners directly…[but] never via our contractors.”

'Implore'

Also trying to think of protective steps to take to thwart the clones is the FCSA’s My Bryce.

“We implore all businesses to check that your supply chain is secure,” the association posted.

“[So] make sure your staff are aware of this issue, [and] do not change your payment details without checking who is at the other end of the email or call.”

'I don't think the cloners will stop'

But while she too has endorsed raising awareness about the clones (which agency body REC is also doing with its own campaign), Clarity’s Ms Smith sounds as if she fears the end isn’t even in sight.

She said: “The cloned companies are on the loose -- again.[But unfortunately] I don't think they will stop until HMRC and Companies House get these [clone] companies closed down.”

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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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