7 Tips for Avoiding Contract Fraud
As many of our regular readers will be aware, Fund My Contractor are dedicated to fighting fraud in the recruitment and contract recruitment industry. Wherever we can, we want to help you avoid getting into a fraud situation, which is why today we're writing our Top 7 Tips for Avoiding Contract Fraud.
- Using a Limited or Umbrella Company
Agency candidates who claim to be working as "self-employed" should throw up red flags for the placement process. Pretending to be self-employed is one way in which fraudsters can attempt to avoid having to show certificates of registration and incorporation, and thus avoid being outed as not existing.
Only use companies that can provide certificates of registration and incorporation for your contract placements.
- Passport or Other Valid Identification
Fraudsters will mostly be relying on fake names and fake identities in order to avoid getting caught once they are discovered. A simple request for the candidate's passport or other valid identification you can trust will dissuade many fraudsters. Of course, once identification is provided, double check that it is legitimate. It's too easy to trust that simply receiving something that seems like valid identification proves the candidate's legitimacy, and fraudsters can take advantage of this trust by supplying fake identification.
Always make sure to receive a copy of and double check a candidate's identification.
- Proof of Address
Much like proof of identification, insisting on seeing proof of address will help separate the real contractors from the fraudsters, and will help you double check the identification you have received.
Use proof of address to double check a candidate's identification.
- Get a Copy of the Company's Bank Details
If a fraudster is trying to operate under the pretence of being employed by a company, then they will often try to convince you to pay them through a separate bank account, much like they will pretend to be self-employed. You can avoid being caught out by this by requesting the company's bank details rather than the potential contractor, so that these details can be verified and, thanks to having seen the company's certificates, you can verify that you are paying a real contracting company.
Request the company's bank details and pay through them, not directly to a bank account you don't know.
- Verify the Existence of Company Employees
Another way to foil a fraudster's attempt to masquerade as part of a company is to, after receiving a signed contract but before making payments, phone the client's main line to verify that they do employ a person with your contact's name. It's important to phone the main line, not the number your contact has given you, to make sure you get through to the real client. If the client has no-one by your contact's name employed there, then you are likely in a fraud situation.
Call the client's main line to ensure that the employee you are in contact with exists.
- Call the Client to Verify that the Candidate was Onsite
Of course, before making payment to the candidate, it's important to make sure that they actually performed the work that they are being paid for, and that the timesheets they have submitted are correct. This is a procedure that many recruitment companies already practice, but make sure that you contact the client to double check the facts. Once again, if the client is clueless then you may be in a fraud situation.
Call the client before making payments to ensure that the candidate was performing their role.
- Get References for All Potential Candidates
This is another step that many contract recruiters already practice, but if you don't already then it is a good step to start taking. Ensure the veracity of your candidate by getting references for them from verifiable sources. A candidate that doesn't want to or can't provide these references may not be who they say they are.
Make sure all candidates come with references.
Hopefully these steps help you to avoid potential contract recruitment fraud. Please share this advice with others you know to help us stamp out fraud in the industry.