3 Simple Ways to Avoid Being Scammed by Bad Clients

Sometime within my second year as a freelance writer, I was scammed by a client.

The client was the owner of a modeling agency based in California. He asked me to write content for the agency’s website, but before that he hired me to write a legal document (I forgot what, but it was some kind of contract).Red flag na dapat yun.

If a client is running a legitimate business, lawyers or notaries or even online legal template sites should be doing this stuff for him - not a freelance writer with no background in law. If I just dug deeper, I would’ve realized that this meant that he did not care how tight or accurate his contracts were - and these contracts could make or break his business.

After I finished writing up the contract, I billed him for $15. And he did not pay.

I chased after him, sending him email after email - but he wouldn’t respond. I was so angry, not even because of the amount, but because of the principle. The cost to me wasn’t just $15 or a few hours of my time, the real cost was that I was actually easy to exploit. If I didn’t find a way to fix it, clients were going to do this to me over and over again. I didn’t want that.

So I looked for his posts on several online forums and posted a response to ALL his discussions. This response included screenshots of our emails and a warning not to do business with him.

Eventually, he found these posts and emailed me. I then demanded payment of the $15. He paid me, but within a day PayPal canceled the transaction because it came from a fraudulent credit card number.

Only You Can Protect Yourself

I quickly learned that there was no organization, system, or department that could look out for me. And even if there was, how would they chase the scammer? I wasn’t even sure if the name I had on file was real. It eventually became clear to me that any information he gave me about his business was fraudulent.

More surprisingly, I found that things like contracts don’t really do much to protect freelancers - especially if their clients are overseas. I had a contract with that client, yet he did not honor it.

Since I don’t like playing the role of “helpless victim” and I didn’t want to gamble, I wondered if there was any other way to protect myself. After some research and trial and error, I decided to establish a system that would help me avoid and prevent being scammed. And I’ve never been scammed since.

Here’s what I’ve been doing:

#1 - Know more than one way to reach the client.

Upon first contact with the potential client, I try to answer the following questions:

  • What is their full name (if an individual) or the full name of your contact person (if an organization)?
  • What is the name of their business?
  • Where is their business based?
  • Does your main contact person have social media accounts? How many and how old are his/her accounts?
  • Can you find their full street address? What about their phone number?

All of these questions can typically be answered with a bit of Googling, or by asking new potential clients to fill up an information sheet before your first meeting or before you discuss the details of the project.

If you’re going to use an information sheet, you can use tools like Wufoo or SurveyMonkey to create this information sheet (the free accounts will do). Here are some of the key fields you should include:

  • Contact Person’s Full Name
  • Business Name
  • Complete Business Street Address
  • Business Email Address
  • Business Phone Number
  • Website URL
  • Business Social Media Account URLs
  • Optional preliminary questions like:
    • “Briefly describe what your business does:”
    • “Why do you need my help?”

While most job bidding sites have some security measures in place that prevent freelancers from getting scammed, it’s still helpful to know their identity and business details. What’s even more surprising is that once in a while, I see seasoned freelancers work with clients outside the verification process of job bidding sites without even knowing the client’s full name! In all cases where I’ve seen a situation like this, the freelancer was scammed into doing a lot of work upfront, and the client disappears by the time they have to make the first payment.

Even if I’ve personally never used job bidding sites to get clients, I have all the above information about them and have verified it with simple searches.

Knowing all the possible ways to contact your client isn’t just a way to protect you from scams, it’s a standard business practice for consultants. (Even your doctors or lawyers do it!)

#2 - Start the relationship by asking the “Inside Look” question.

It’s easy to meet a new potential client, just receive instructions, and start doing your work. Yung hindi ka na masyado mag-iisip, naka-depende sa ideas ng client lahat ng gagawin mo. All you have to do is say “yes”.

While that approach is fine for some people and it was fine for me at first, I found it very risky later on because:

  • I didn’t know or understand how my clients made money. If you don’t know how your clients make money, you don’t know what your role is in the business. If you don’t know your role in the business, it’s hard for you to justify pay increases, or even your existence as their freelancer.
  • I didn’t know how stable the job was. Relevant to the above point, if you don’t know how your clients make money, you don’t know how secure your position is. Kumikita ba sila at all? Passion project lang ba nila ito or business talaga ito? The stability of your job or project depends on the stability of the client’s business. If they are losing money, you wouldn’t know it - magugulat ka na lang na wala na yung project.
  • I didn’t know if my clients were scammers or not. There’s more than one way to be a scammer. Clients could be paying their freelancers, but this doesn’t mean that what they do is 100% legit. If your client’s business model is scammy, it could fall apart or change any day. Remember how my scammy client tried to pay me but PayPal canceled the payment? This was because my clients’ credit card number was reported as fraudulent! Who does that? Scammers.

This is why I developed the “Inside Look” question. During my first meeting with my client, this is the first thing I ask:

“Can you give me an inside look on how your business works? Take me from the moment that your target customer first hears about you, to the moment when you make the sale. What happens in between?”

Though it’s best to ask this via an audio call/chat, which scammers often hate doing, shy freelancers can ask this via email or via their client information form (see above). The advantage of the audio call is that you’d be able to hear any hesitation or overthinking in your client’s part. (Plus, you’d hear how impressed they are with your question! I find that most clients are impressed when you have a deep interest in their business.)

 #3 - Send the “Sandwich Schedule”.

Another way that I’ve avoided scams is by presenting the client with a concrete work schedule that sandwiches the payments in between. See a sample from one of my archives below:

As you can see, work is sandwiched between payments. I ask for an upfront downpayment (this could be anywhere between 10% to 50%), then I submit some deliverables to the client, then they send another payment, then I send more deliverables until the project is finished.

A lot of Filipino freelancers seem hesitant to ask for upfront downpayment. Some of you might feel shy about it, or you might think “Baka isipin ng client na ako naman yung scammer at itatakbo ko lang yung downpayment niya!” Here are some reasons why you shouldn’t worry about it:

  • It’s a standard business practice among consultants and freelancers almost everywhere.
  • There are many ways to build a client’s trust before you even discuss pricing. If you show them your previous work, LinkedIn profile, and testimonials from previous clients, it’s unlikely that they will be worried about you being a scammer.
  • Besides, what’s the worst thing that can happen if your client doesn’t want to give you the downpayment? They will say “No” to the downpayment and ask you if it’s possible to waive it! It’s as simple as that. It doesn’t mean that they won’t hire you - especially if they saw that you put the work into preparing such a detailed and itemized work schedule. If they passed the other tests you had for them (the information sheet, the “Inside Look” question, the thorough Google searches about their name and business name), then you often have nothing to worry about.

The goal here is not to get the client to immediately agree to your Sandwich Schedule - it’s to observe and analyze your client’s reaction to it. Did they hesitate? If so, how? Were they calm and clear, or did they panic? What are their reasons for hesitating? Can you address those reasons? Do they seem legit anyway and did they pass your other tests even if they hesitated with the down payment?

Other Things That Worked

While the above 3 things are simple enough for you to start doing TODAY, there are some other more long term and more difficult things that I did that protected me from scams:

  • Charging higher rates. Once I started charging at least $20 per article, I was no longer approached by scammers. I don’t know if it’s the number itself or the fact that when you do charge higher rates, you tend to look for clients in scam-free zones. I suspect it’s also because legitimate businesses know that you get what you pay for and that a $20 article is more likely to give them better returns than a $1, while those who are obsessed with cutting costs and getting as much free stuff as possible would browse more towards the lower price points.
  • Looking “legit”. If you look at my online folio, you’ll notice that it’s very bare, contains the logos of my highest-profile clients, and has a big picture of my face. Having a well-designed portfolio with client logos and containing your best work makes you look like a pro. And nothing terrifies a scammer more than a pro, because pros know what they’re doing.
  • Having an initial “phone call” rather than relying on email to discuss the project. As I mentioned earlier, it’s best to gather your potential client’s information via an audio call at the very least. This helps you build rapport with them, gives you the opportunity to ask as many spontaneous questions as you want, and helps you hear their real-time reactions to your questions and statements. I very rarely get into a working arrangement with a client without having an audio call with them first.

Staying Scam-Free

I’ve mentioned earlier that since that first time I was scammed, I was never scammed by a client again. But scam clients and fake job opportunities are still out there. There will always be scammers who are out to get articles, design work, research, and any other services for free. The question is: what can YOU do to repel them?

If you find yourself being scammed by a client more than twice, it’s time to ask yourself if there’s something that should change in the way you attract, acquire, and communicate with potential clients. Even if you just copy one thing from my process above, you’re already setting up your first layer of armor against them.

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4 thoughts on “3 Simple Ways to Avoid Being Scammed by Bad Clients

  1. Jovell Alingod

    Thank you Celine. This is one thing we haven’t discussed in the group. Good thing you wrote about it.

    “…the real cost was that I was actually easy to exploit.” Having this feeling is like having a dark cloud lingering over your head all the time.

    “I had a contract with that client, yet he did not honor it.” Yun nga, even if we have terms, e-signed and all, but international clients are not bound by our country’s law. And even if they were, it’d be more of a hassle for us to run after them than it it for them.

    So…you can count on me to copy your process from now on. But I’ll probably tweak it a bit, don’t worry.

    Reply
    1. Celine (Pinoy500.com) Post author

      You’re right! I’m starting a discussion in the group right now. Thanks

      Yun nga eh, alam nila na kahit technically legally bound sila to honor that contract, they can easily get away with not honoring it kasi hassle for either party to pursue litigation. Some things have made it easier (like filing a DMCA notice if your unpaid articles or graphics were used, tapos mate-take down yung site http://en.wikipedia.org/wiki/Digital_Millennium_Copyright_Act), pero paano kung something intangible like hour-based work (like what many VAs and consultants do)? Mahirap pa rin talaga.

      So the best way - I think - is to make the client-filtering process better, kasi yun yung part ng process that we can do something about. Yung paghahabol, a lot of it is difficult and outside our control.

      Reply
  2. Claire

    Very valuable information, especially the “inside look” on the business.

    I have also been doing background checks on prospective clients to avoid being scammed.

    I want to ask, though, if you are the one applying for an advertised project, how do you ask the business and contact person details without sounding like the inquisition? This is especially if the business is a startup and the website is not up yet.

    Thanks!

    Reply
    1. Celine (Pinoy500.com) Post author

      Hi Claire

      Pre-interview, you can look up the name of your contact person and the email address they gave you (or the email address they used to reply to you) and do searches of those. See what comes up. If they use a customized domain name for the email address, I look that up too and do a WHOIS search (http://www.rackspace.com/knowledge_center/article/how-do-i-do-a-whois-search) This is what I do when I have almost nothing to go on, and I end up turning up a lot of things (previous businesses and jobs, their social media profiles, any other ads they put up, etc.)

      On the interview itself, you can use asking for their contact information as your primary question. “Before we get started, I’d like to know how else I can reach you for further communication. Do you have a business phone number I can put in my contact list?” should be fine.

      If you take the attitude of a psychotherapist, it’s going to sound less of an inquisition and more of a natural curiosity with the purpose of helping out the other party. That’s the approach I use for these in-depth interviews, esp. since most of the time, their problems are not technical business problems but psychological ones. That’s how I make the questions sound natural, I suppose.

      Hope this helps!

      Reply

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