A new scam has been identified in the contractor industry. The scam consists of fictional clients and temporary candidates that attempt to exploit freelance staffing companies.

According to the REC (Recruitment and Employment Confederation), this scam is initiated after a “client” – scammer who poses as an end-user – communicates with a genuine agency, with a request that they need to fill a role.

Subsequently, the client conveys to the agency that they are aware of a contractor agency that is the best in the business.

A spokesperson from REC revealed that while such requests were strange, it has happened in other executive-like searches. Therefore, it does not serve as an automatic red flag.

One of the scam’s variant is that instead of pre-selecting the candidate, the ‘client’ offers the assignment brief to the agent. After some time, an able ‘contractor’ communicates with the agency.

Regardless, after the ‘contractor’ completes their work and finishes the invoicing for that agency, they receive payment from the staffing company. However, soon they realise that the ‘client’ payment will never arrive.

A REC spokeswoman revealed that one of their members was affected by the fraud. They disclosed that such scams were also prevalent in the past and advised their members to remain cautious.

Therefore, the confederation recommends determining the credibility of both new contractors and new clients where one can meet these parties, especially where the work is expected to be done.

The scam is sophisticated because the deceived agency did engage in its ‘due diligence.’ This means that the contractors can have Right to Work, ID, and references to appear as authentic.

The fraudsters were quite efficient at covering their tracks – after the affected agency contacted the ‘client,’ they were nowhere to be found. Additionally, the contractor had also vanished into thin air.

REC has been directing victims of these targeted scams to SAFER jobs that has been launched by the Met Police to offer protection to the job-seekers and contractors.

The confederation is unaware of why this scam is contractor-focused. Some experts opine that this is because of the high fees that are taken by the professional contractors.