Umbrella company cloning: why is it a growing problem?

Umbrella company cloning is a scam hitting the headlines, but what is it and how can you avoid becoming a victim? Our dedicated team at Mint covers everything you need to know in order to stay safe as a contractor.

What is umbrella company cloning? 

This type of fraud occurs when scammers pose as a legitimate umbrella firm by copying branding and adopting an almost identical name. Hard-working contractors are then lured in believing they are working with a credible umbrella company and as a result, end up being bamboozled out of pocket. The ease at which these clone companies can be set up is another troubling matter and the lack of policing from Companies House means the problem is only accelerating.  

Telltale signs of a clone 

1. Missing ‘L’

Omitting the second ‘l’ in ‘umbrella’ to help the clone appear as the target umbrella company is a common tactic to watch out for. For example, Mint Umbrella would appear as ‘Mint Umbrela’ on any emails or correspondence. 

2. Lack of online presence 

Vet an umbrella company like you would someone on a dating app. If they have no social media presence, you’ve probably been catfished. Try googling the company name and see if a website comes up. If they do have a website, do some digging. Small aspects like a plethora of spelling mistakes can usually help you separate the real from the fake. 

3. No accounts

Research the Companies House information – if you’re dealing with a clone then it is likely they won’t have any accounts lodged. 

4. Inflated take-home pay 

If an umbrella company is offering you upwards of 85% take-home pay then it is highly likely they are non-compliant and engaging in tax avoidance. Report the ‘company’ immediately and ensure you don’t face a nasty fine down the line. 

5. Cold calling

If you get cold called by an ‘umbrella company’ don’t provide any personal details. Try googling the name – the first result is likely to be the real umbrella company and you can call them to confirm any deals/information provided during the cold call is legitimate. 

We hope you found this article helpful. Remember to stay vigilant and spread the word to keep others in the construct and freelance industry safe!