How to Avoid Scam Freelance Clients (Freelance Due Diligence)

How do you spot untrustworthy, problematic, illegitimate, and out-of-money customers as early as possible? This can be a hard task – especially when communication with your new freelance clients is entirely remote.

Here are some simple measures you can take and the red flags to pay attention to when accepting your new freelance client. Find best-fit clients and avoid the problematic ones!

How to Know Which Clients You Should Avoid?

Before signing a contract and starting work for a client, you should first research the other party to see if they’re trustworthy, legitimate, and reputable in their dealings with freelancers. And it may sound obvious, but they should also be solvent! Evaluating potential clients like this is crucial for the success of your business.

Exercise your own basic due diligence, i.e. take action in order to keep yourself and your freelance business safe from untrustworthy clients who can’t fulfill their payment and other obligations towards you.

The procedure to verify a new potential client is fairly straightforward and always comes in handy when dealing with a new person or business. Save it for later and come back to it anytime necessary.

Potential Client Verification Basics
Client’s Website
Client’s Information in the Official (Company) Register
Client’s Online Presence (SM etc.)
Your Contact’s (And Senior Staff’s) Online Info
Written Contract

6 Easy Steps to Verify Your Client Before Entering Into Business With Them

1. Verify the Client’s Information

You should verify and be in possession of at least the following info on your client:

  • Full legal name,
  • Registered office,
  • Mailing address,
  • Identification/registration number,
  • Email address,
  • Contact phone number.

In the case of businesses, check their data in national registries, which are publicly accessible online in most countries.

Verify the information published in the applicable registry with the information published on your client’s website.

You need to have the right information mentioned above to verify if the client is legitimate, but also to issue an invoice and sign a contract or collect payment.

2. Check Your Potential Client’s Website

Review the client’s website to see if it looks unprofessional or questionable, starting with basics like spelling and grammar. Additionally, look out for an excessive amount of broken links, empty pages, errors, no privacy policy, and no terms and conditions page.

You can also check whether the website has an SSL certificate. Look for the little padlock in the left of your browser’s address bar that shows it’s providing an encrypted connection. This isn’t always present even on legitimate sites, but I’ve noticed it being absent more often than not with scammers or unprofessional clients.

3. Stalk Their Socials (Professionally) & See What People Say

Investigate the internet for information about the company’s performance and conduct. Check their social media and run a quick Google search. It can be a goldmine to gather pieces of the bigger picture.

Read through the comments on your potential client’s social media. Search online for customer reviews, and feedback, and pay especially close attention to complaints. Customer reviews are great for learning about how your client delivers specific services and how they treat their business partners and staff.

Look out for any comments regarding on-time payment, treatment of contractors and employees, and running projects. Putting the pieces together will better let you know what to expect from the client. If the company is publicly traded, you can also see its public regulatory filings.

4. Check Your Contact’s (And Senior Staff’s) Online Info

Take a look at your contact’s LinkedIn (or other available social media profiles). You should get a gut feeling about them, as well as see if their work history looks good to you.

Try to get a rough idea of how long they’ve been working on the project and what their role is. It’s also worth doing the same with senior staff at the company to see if the company generally consists of credible and trustworthy people.

As a rule, trustworthy people with a good career history will be more likely to work on legitimate projects. Odds are they work around like-minded people and the organization as a whole is reliable.

5. Talk it Out & Ask Questions

During a discovery call (preferably through something like Zoom so you can see their face) find out exactly what they need from you and clearly communicate what they can expect from you and your work.

All of the details should be written down in the follow-up email, so you have something to reference. If you want to enter into business with the client, all of the arrangements should be included in the written agreement for your freelance work.

6. Get a Solid Written Contract

Get everything in writing and always read everything you sign carefully. Agreements that are not in writing (oral contracts) often cannot be proven and as a result, properly enforced.

In case of a dispute, proof of oral contracts normally centers around the conflicting testimony of you and your client. In some cases, if one of the parties isn’t able to establish that their version of the agreement is the correct one, the oral contract may even be considered non-existent. This way you’re only wasting your energy, money, time – and frying your nerves.

However, never sign anything you haven’t read and understood or that has blank spaces that will be filled in later. Your freelance contract should be written in simple language that both you and your client understand and it should spell out the terms you agreed to.