Agency director warns on contractor recruitment fraud, targeting his firm three times -- and relieving agencies of £1million

A scam relieving contractor recruitment agencies of £1million is hitting targeted agencies over and over -- with a little help from fake contractors posing as limited companies.

Leap29 says it has been targeted by the same hoax client-contractor duo three times, in an “extremely sophisticated” ruse to make its consultants part with thousands of pounds.

The recruiter says the scam starts when fraudster one, ‘the client,’ often posing as a foreign branch of a big brand, contacts an agency with seemingly “real role descriptions and terms.”

The agency then hears from fraudster two, ‘the candidate,’ who is “absolutely perfect” for the roles and further helpfully, is a limited company, Leap29’s Simon Duff told ContractorUK.

'They see how many payments they can get out of the agency'

Asked to hire those who contacted it directly since it advertised the roles as they must be “particularly interested,” Duff recalls the client saying, the agency hires ‘the contractor.’   

“The plan is for you to engage the contractor and for them to see how many payments they can get out of you to the contractor before you get the client’s funds,” Leap29’s director says.

Alerting agencies online, Duff added: “But you never get paid from the client, as the person you have been speaking to…[is] a scammer, who is in cahoots with the fake candidate.”

'The scammers are leveraging technical advancements'

Matt Collingwood, boss of IT recruitment firm VIQU admits that his business was targeted by the same scam at Christmas but, like Duff, he spotted the scam before releasing any funds.

“The scammers have become more sophisticated and convincing, leveraging on technical advancements to make themselves look legitimate,” Mr Collingwood told ContractorUK.

“This includes things like aligning their email signatures with the company they’re purporting to be.”

Duff confirms, saying on top of returning contracts signed, the client used “extremely similar” email particulars to the genuine branch of the big brand it was impersonating.

'Digital hasn't helped'

Usually a champion of digital technology, Keith Rosser, a director at Reed, believes that the rise of virtual working has given the scammers a boost.

“A previous JobsAware roundtable with South Yorkshire Police, the Met Police, and recruiters heard how agencies had, collectively, lost over £1m to this scam – contractor fraud.

“It’s changed shape since, with the emergence of job boards and social platforms. So now it’s common for the client to provide the contractor upfront and ask the agency to payroll them.

“And yes, digital hasn’t helped,” he says. “The rise of remote recruitment has benefits, but it helps fraudsters succeed [here], as nobody meets each other as part of the hiring process.”

'More difficult post-covid'

Collingwood confirms that VIQU’s standard checks, such as Googling the client’s phone number and calling the company back on the displayed number “is slightly more difficult post-covid.”

“The right processes [in place can be frustrated by] working from home limitations and some companies shutting down their switchboards altogether," he says.

“However, there are a number of ways to triple-check whether an opportunity -- and that opportunity’s contractor and client -- is legitimate or not.”

Chair at JobsAware, Mr Rosser touches on internet-based ways to check on the legitimacy of contractual parties in an article on contractor recruitment fraud, exclusively today on ContractorUK.

'Screen-shotted their face'

But Leap29 director Simon Duff, who will share with ContractorUK readers his top tips to avoid contractor fraud (for contractors to in turn share with their agents, partly to help cut longer onboarding times which result from the fraud), says technology can also be used to fight back.

“I managed to get the scammer to turn on their camera and so I screen-shotted their face,” he says.

“So we will be passing all this information -- including the screen-shot -- to the police. But as we’ve been targeted three times now, I want to make sure everyone in our industry is aware.

“If you think you could be a victim, or are concerned about an enquiry like this please let me know. I am happy to try and advise based on our experience. Be vigilant.”

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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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