Umbrella companies in the UK are being urged to watch out for a group of scammers posing as a US-based tech company looking for payroll services.
In a sophisticated ruse, the hoaxers are reaching out via email and even arranging Teams calls claiming to be from a company called LY Holdings. Their story is that they have been working with 63 IT consultants based in the UK and paying them via limited companies. But having grown concerned about falling foul of IR35 off-payroll working regulations, they want to pay the contractors as temporary employees going forward – and need a UK-based umbrella to handle that for them.
The characters fronting LY Holdings – reportedly calling themselves “Ravi” and “Eliza” – are asking for credit on the first payment owed to the consultants. There are also reports of them requesting very short terms of as little as 48 hours. Just to ‘test’ the arrangement and ensure their consultants get paid, of course.
At least one umbrella has fallen for the scam to date, with the figures from LY Holdings becoming suddenly impossible to contact after the initial payment to a bogus contractor clears. Several other umbrella companies have spoken to ContractorUK to share their experiences of being targeted. One told the website that they believed the majority of umbrella companies had already been targeted by the same scam in one form or another. One wrote about having Teams meetings with the mysterious Ravi and Eliza!
Sophisticated and persistent
The concern is that the sophisticated and persistent nature of the scam will see others fall for it. Not only do “Ravi” and “Eliza” go to great lengths to come across as genuine, including agreeing to Teams meetings, LY Holdings is also officially registered on the Companies House website, and the scammers’ initial email provides details to invite background checks.
Luckily, it seems most companies targeted so far have spotted red flags early, including the request for credit rather than the more usual arrangement of paying the umbrella before money is released to employees, plus the unusually short terms.
It’s a timely reminder of the importance of UK Finance’s Take Five anti-fraud campaign, which provides specific warnings about treating requests for upfront payment with utmost suspicion. As per the campaign, should you receive any such requests, no matter how genuine they appear at first, you should always stop to give yourself time to think before agreeing, and challenge anything that seems suspicious.
