Fraud warning for recruiters

  Published: 24th February 2021

With a long history of working within the recruitment industry, as well retaining a strong client base of recruitment companies, the team here at Zodeq are very much up to speed with the latest news and trends impacting the industry, as well as the threats.


One such threat has recently come to our attention, that we believe all businesses should be aware of, and a number of recruiters have sadly fallen victim to.


This is a scam that involves a fictional individual approaching a recruitment company on behalf of another company, in order to source contractors. Recruiters may not realise that this is a scam as often the company this individual is representing is indeed on Companies House. However, often these companies are unaware that this individual is using their company name as part of a scam.


Following this initial conversation, recruiters are being approached time and time again, requesting payroll for contractors. Once again, the contractor names they may be using will be legitimate and are unaware that their identity is now being used in a scam.


In just a short period of time, these tactics can incur thousands upon thousands in payroll costs for a recruiter, at which point they are no longer able to reach their initial contact.


The warning signs of this scam:


  • Typically seeking 30-day credit terms
  • Supposed contractors will be paid high daily rates and work 7 days a week
  • Newly registered companies looking for supply quickly
  • Different Directors to Shareholders
  • The business may have excellent first year’s accounts to generate a credit limit
  • No mortgages or debentures registered; indicating no borrowing which would produce these excellent first year accounts.


From these you should question how this company has been able to achieve such strong results without any borrowing whatsoever. This is highly unusual and therefore should ring alarm bells if you’re considering working with them.


An effective due diligence process is critical to ensuring that your business doesn’t fall victim to fraud, therefore we urge you to carry out a review of your current procedures and identify key areas for improvement.


If you need any advice, please don’t hesitate to contact the team at Zodeq.