Recruitment companies forcing contractors to join their "preferred" Umbrella company

[TykeMerc]

Has anyone else noticed the current trend by recruitment agencies to refuse you contracts unless you sign up with their preferred umbrella companies? Isn't this illegal?

Illegal? No Far from it.

Any company is entitled (and very foolish if it doesn't) to decide who they will do business with. The larger the company the more controlled their suppliers list. This is sensible for many sound business reasons.
Due to there being more than a few "schemes" disguised as Umbrella companies many Agencies have become extremely wary of these and possible fallout so they won't even contemplate dealing with them.
Some Umbrellas offer a kickback to Agency staff that put work their way, it's sharp practice, but legal (more or less).
Agents tend to take the approach that they will ONLY deal with the Umbrellas on their Preferred Supplier List (PSL) or people using a conventional MyCo Ltd. This is to protect themselves against future hassle and reputational damage. They are also protecting the contractors who are either utterly ill informed or dangerously stupid and willing to use the schemes.

[northernladuk]

It's hardly a current trend. It's been going on since the beginning of time.

[LisaContractorUmbrella]

Has anyone else noticed the current trend by recruitment agencies to refuse you contracts unless you sign up with their preferred umbrella companies? Isn't this illegal?

Whilst it may seem unfair it's not illegal because you don't have to take the contract and they don't have to offer it to you - simple as that really. The only time it would be an issue is if the agency were recommending umbrella companies to you that were not compliant with HMRC legislation.

[Rolex44]

Has anyone else noticed the current trend by recruitment agencies to refuse you contracts unless you sign up with their preferred umbrella companies? Isn't this illegal?