How Principals Can Avoid Online Scams
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 all other online businesses and communities there are a small number of people trying to make money with false claims and promises, and in very rare cases operating illegal scams.
So here’s some tips and advice to businesses looking for sales agents or distributors that will help you to avoid the online scammers and the small number of dishonest people looking to take advantage of honourable business people.
Most scammers online are looking for an upfront payment from the victim. They will give what sounds like a genuine reason why you should make a payment to them. They will make false promises of benefits that you will gain in the future in return for the upfront payment being made now.
I would always be wary of anyone asking for an upfront payment, an administration fee, or a retainer. What exactly is it that you are paying for? If you have the products or services available to sell, and they have the customers, is there a real need for you to pay them before a sales order has been received and verified.
Included in this article:
- A Typical Example of an Online Scam
- How to avoid Online Scams
- Requests for Payments
- Claims for Expenses
A Typical Example of an Online Scam
Here’s an example of a recent case where businesses were asked to make upfront payments of £250 as a retainer. An email in response to businesses looking for agents in the UK 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.’
This sounds like a blatant scam to get people to send £250 and all you will get afterwards is bad luck stories and excuses but still never see your money again or any sales orders. Why would they want £250 and then pay it back after 30 days or when a commission payment is received?
They say they will pay it back whether sales are made or not, so why do they want your money for 30 days?
As with most scams of this kind there is also the promise of something in return but nothing definite:
‘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.’
Unfortunately a couple of people made the payments of £250 in good faith but no sales or refunds were received and they are now looking to take action against the individual concerned.
Here are some pointers to look out for if you receive a similar email:
- In other information that was sent with the email the marketing literature had the wrong postcode for the business address.
- A quick check on Google found nothing relating to the alleged business and there is no website.
- A search on the email sender shows a LinkedIn account with no recent activity.
- On the sender’s CV he states the business was only started this year.
- There is no listing for the business on BT Phone book or Yell.com.
How to Avoid Online Scams
No website advertising your sales agent opportunities can research or check all the people who have access to the adverts. It’s just like when businesses used to advertise in newspapers and magazines. Your advert is there to be seen by anyone who looks at that page.
All replies to your adverts go directly to you so that you can make the decision on who to take to the next stage of application. You can take steps to ensure the person you are considering matches up to their claims, just as you would with an employed position, by asking for references, researching online, and asking questions on their past experience and career to date.
Requests for Payments
If you are requested to make a payment as a retainer I strongly suggest you look at what you gain from this payment and when you will get that benefit. You should also consider if this is a good way to start a mutually beneficial business relationship. At worse this could be a scam, at best the risks and liability if anything goes wrong are being put on you.
Claims for Expenses
At the start of a relationship there may be expenses which it may be reasonable for you to pay in relation to things like travel or training.
To lessen any risk I would advise that rather than send any monies to the agent that you arrange the travel and accommodation and pay directly.
As I said at the start, the vast majority of people online are honest and professional, but there will always be a minority that look to make easy money without working for it. Take precautions and do research before making any financial commitments, and always ask yourself if it feels right, are you taking all the risks, and if unsure ask more questions until you are satisfied with the answers.
Written by Stephen Craine – Partner Sales Agents UK ltd