If this was explicitly stated as not allowed, why are you interviewing this candidate?

I would simply cancel the interview.

Whether you want to be "fair" or whether you want to avoid embarrassing him seems like a decision you need to make yourself. Although you could just ask him questions about the code he wrote or ask him to solve a similar problem - if he fails there, the fact that he cheated would be much less relevant (if he has no problem there, you might want to consider how likely it is for the similarity to just have been a coincidence).

So you allowed StackOverflow, where in theory they could have asked a question, and then just copied and pasted the solution they received, but you would have been alright with that? "this would clearly embarrass him and might also make him cheat more elaborately in the future" - This is an assumption on your part. I agree that you should just cancel the interview. If pressed for a reason, indicate you don't provide reasons, when candidates are not selected.

"just a few variable names changed" So not a complete copy then? I have to wonder why you're even using an offline pre-interview test if it's so facile that you can copy-paste the answers.

Why are you giving an interview question that can easily be looked up? What exactly are you trying to test?

So you don't want to interview the only one who found a cheap, better, tested, and reliable solution? How can this be a bad thing? (specifically when he found this on SO as you mentioned in another comment)

@FelipePereira - the goal is to have a basic idea of candidate's technical level. While using already written solutions is not a wrong thing per se, the platform explicitly requires the candidates not to copy-paste solutions. By having SO answers to virtually all small technical challenges, one should be able to write "original" code to an average difficulty coding problem.

@Lilienthal - unfortunately, I do not control how the company creates these tests. If it weren't for my suspicion, this issue most probably would have got undetected.

In the question you say SO is allowed, is the copy/pasting that's wrong?, if the goal is to test his skills with the offline task, the interview when he explains it is mandatory

You didn't explain how you found the exact copy so not sure how bad is the fault here. For example when I answer a questions regarding sql pivot, I copy paste the example from Microsoft manual and do the name changes to match the question. When is a question where I need calculate row_number() in my sql also have a example ready where only have to change table names and fields.

@JuanCarlosOropeza - the problem involves finding some permutations having a few constraints. I copied one line that looked to be very specific, searched Google, found one SO question, found the answer, compared the two solutions. Perfect match except for 3-4 variable names. So, it is not a quick SQL statement that can happen to be the same. Also, that particular answer was the most convoluted (code style, split in functions, language features).

That is the problem with those task. For example I don't remember the last time I did permutations. I know was for a puzzle game I was designing like 5 years ago. If you ask me right now I can't tell you the difference between permutation and combination without google it (I know order matter). But that doesnt mean I cant do the game again.

You found the answer on StackOverflow and your guidance says that SO can be used?

@MartinSmith - the guidance says that copying (almost) entire solutions is forbidden. SO and/or other documentation can be used for small things (e.g. how to efficiently sort some array or list in some language).

What exactly is the purpose of giving a candidate a combinatorics problem where the solution can be easily found on the internet, telling them that they can look things up but providing some vague guidance about how much of the things they look up they can use, and then being surprised when they've found the solution on the internet? This candidate cheated, yes, and you should respond accordingly, but it seems your interview process is setting candidates up to fail rather than assessing their abilities.

I don't understand the disconnect between HR (who is scheduling an interview) and the developers who reviewed the test. Is the assumption you will interview everyone who took the test? Isn't it evaluated in some way to qualify the candidate for the next round of interviews?

@JeffO - the recruiting process was started some time ago and a short list of candidates were selected for interviews. I heard about it by mistake and offered to help in order to gain some recruiting experience and also because I know I pay more attention than others to technical details. Out of experience, the company I work in has good HR experience, but it is rather poor of properly evaluating the technical skills of the candidates.

@Alexei How specific was the wording about limiting the SO usage? I'm getting mixed messages from your wording. It almost seems like it may have been ambiguous enough that you may want to examine your own policies as well.

@JMac - I cannot remember the exact words, but the message was: you can use external documentation, but not copy solutions, or code someone else for you.. Clearly, by having a problem with a solution that can easily be found on SO is a flaw within the recruitment process. As a side note, this was the only case when I saw something like this: out of 6-7 candidates with decent results that will be interviewed, all but one provided "original" solutions, or original enough not to draw my attention.

Why not just make another test ?