A few years ago I had an enquiry from a potential client who was an acquaintance of a friend.
I had my doubts early on that he was a scammer but initially gave the benefit of the doubt, and then continued out of curiosity as to what he would do, with no intention of ever parting with money or doing work without a full contract in place.
The following is a brief outline of some of our interactions, along with alarm bell triggers, which I include mainly for the benefit of those who may face a similar situation and who may want to know how such a scam might progress (questions at the end):
- Initially very hazy about what his business did. Didn't seem to be able to give an adequate explanation of how it worked, his product or target market.
- Vague and suspicious story about previous web designer who disappeared without finishing the job (I asked him about any previous sites or design work carried out on his business). There were a few graphics and a page of text but there never was an actual website for the business.
- Met in small rented office with no phones, computers or filing cabinets.
- Checked out the business name on Companies House register (the official UK corporation register for those who don't know) and the name is listed there but I didn't pay the fee to get more details. Thought it could be a sign of legitimacy.
- A phone call one evening that he had to pay an urgent bill but all his payment cards and cheque books were locked in a filing cabinet for which he had lost the key. Wanted to borrow money from me to pay for a locksmith and to help pay the urgent bill (first major alarm bell that made me conclude this was most likely a scam in progress). I said I couldn't help with that and to have a chat with his bank.
- Silence for about 6 months. Then another phone call wanting to continue the web development work.
- More vague information over the phone followed by a face-to-face meeting in which he requested to borrow from me £2000 to help with some cashflow problems and said he would pay me back "generously". I said I'm not in a position to help with those sorts of things.
- I didn't hear back from him for about a year. Then I got an email out-and-out just asking for £20,000 to help with his business (again offering to make it "worth my while"). I ignored it.
- Another year or so, last November, he contacts me again and is just interested this time in getting the website built again. I'm curious to see what he says this time so I go along with it. I tell him I can't meet him but we can talk on the phone. He says he has dissolved his last business (checked out Companies House register and the business name is listed as dissolved). I checked their list of disqualified directors and his name does not appear there.
- He is reluctant to call me asking me to call him because of the cost of his mobile phone tariff. He wants me to always call him (though it also costs me more to call mobiles!). He does not have use of a fixed-line phone and uses a public telephone box when I ask him for fixed-line number to call.
- I email him my contract and fee schedule and tell him I need his signature and an address to send it to (thinking it would put him off) - he seems willing to sign it; however, he keeps telling me how his business is in the process of being "reconstituted" and they don't have an address yet but I can send the contract to the address of one of his "associate partners" whose office he is temporarily using (in the same serviced office building as before).
- He was also reluctant to register the domain via my web hosting website and he wanted me to register it for him and add it to the overall bill for web development. I told him I keep the two services separate (partly because I prefer to do it that way, but also I wanted to see if he would give an address after I told him the domain can be seized if he provides false information). He is making vague excuses for not doing that.
- Now he is saying things like "you said you would start on this date" and "there seems to be a miscommunication" and "I can go to someone else to do the website if you prefer".
- I have just now told him that I expect him to sign and return the contract before I start doing any work and that he needs to sign it either as an individual providing his home address, or as a representative of his company providing the trading address that is registered with Companies House.
UPDATE: A month later I receive no reply after asking for a home or registered trading address - the strongest evidence of a scam, I think.
Are scams like this widely experienced by other freelancers / small businesses?
What can be done to inhibit the risks of people falling for such scams?
As he has done nothing illegal yet, are there any standards, quality-control, or investigatory groups that monitor/investigate potential scams from B2B clients / customers?
There are usually several official/unofficial organisations that monitor & investigate unscrupulous traders and service providers but, as far as I am aware, none that look into clients.