The vast majority of people using the Salesagents.uk website are honest and reputable sales agents looking for new opportunities to sell products on behalf of principals. But like every online business and community, there are a small number of people trying to make money with false claims and promises, and in very rare cases running illegal scams.

So here are some tips to help businesses looking for sales agents or distributors avoid the online scammers and the small minority who try to take advantage of honest business people.

Most scammers online are after an upfront payment. They will give what sounds like a genuine reason why you should pay them, wrapped in a promise of benefits you will supposedly gain later in return for paying now. I would be wary of anyone asking for an upfront payment, an administration fee, or a retainer before any sales have been made. What exactly are you paying for? If you have the products or services to sell, and they have the customers, is there really any need to pay them before a sales order has been received and verified?

• A typical example of an online scam
• Red flags to check
• How to avoid online scams
• Requests for payments and retainers
• Claims for expenses

A typical example of an online scam

One pattern comes up more than any other. An “agent” gets in touch out of the blue, very often directly by phone or email rather than through your advert, claiming to already have buyers lined up and ready to place orders. The catch is that they want a retainer or upfront fee before anything happens. Once it is paid, the promised orders never appear and the “agent” goes quiet. That is the classic retainer scam.

Here is a real example. Businesses looking for agents in the UK received an email asking for an upfront payment of £250 as a retainer. It included the line:

We charge an upfront retainer fee of £250 which is refunded after the first commission payment is made, or after 30 days if we fail to generate any orders, this is all covered by our company agreement.

It sounds plausible, but ask yourself: why would anyone want £250 and then hand it back after 30 days, or once a commission payment is received? If they will refund it whether or not sales are made, why do they need your money for those 30 days at all?

As with most scams of this kind, there is a promise of something in return, but nothing you can pin down:

I am also currently working with 3 new start up city centre night spots who I think would take your services from the off as it will help them massively when they launch in the next few weeks.

A couple of businesses paid the £250 in good faith. No sales and no refunds followed, and they were left trying to take action against the individual involved.

Red flags to check

Before you act on an approach like this, a few quick checks usually tell you what you need to know. In the case above, every one of these was a warning sign:

How to avoid online scams

No website advertising sales agent opportunities can vet everyone who sees the adverts, any more than a newspaper or magazine could back when businesses advertised there. Your advert is there to be seen by anyone who looks at the page.

All replies to your adverts come directly to you, so you decide who moves to the next stage. Take the same steps you would for an employed role: ask for references, research them online, and ask about their past experience and career to date. Our guide to spotting a successful sales agent covers the checks and questions worth focusing on.

Requests for payments and retainers

If you are asked to pay a retainer, look hard at what you get for it and when. At worst it is a scam. At best, the risk and liability if things go wrong are being shifted onto you before the relationship has even started.

That said, a retainer is not always a red flag. There are legitimate situations where an experienced agent with a track record you have checked and verified asks for a retainer against their time, and that can be a perfectly reasonable arrangement. The key is that the agent checks out first. Do the research, confirm who you are dealing with, and only then decide. If the person is unknown, cannot be verified, or is pushing for money before you have been able to confirm anything about them, that is the point to walk away.

Claims for expenses

At the start of a relationship there may be expenses that are reasonable for you to cover, such as travel or training. To reduce the risk, rather than sending money to the agent, arrange and pay for the travel and accommodation directly yourself.

As I said at the start, the vast majority of people online are honest and professional, but there will always be a minority looking to make easy money without earning it. Take precautions, do your research before making any financial commitment, and always ask yourself whether it feels right, whether you are carrying all the risk, and, if you are unsure, keep asking questions until you are satisfied with the answers.

Written by Stephen Craine, Partner, Sales Agents UK Ltd.