How can freelancers avoid a “jobfish” scandal?
The Madbird design agency scandal unearthed an elaborate “jobfish” scheme that impacted up to 50 remote workers across the globe, placing many in debt. What steps can freelancers take to ensure they are dealing with a legitimate client and don’t get scammed?
In the world of remote working, a little due diligence on a new client can go a long way. This is something Gemma Brett, a 27-year-old designer from west London and Antonia Stuart, “hired” to expand the international expansion of the “Madbird” design agency, soon learned after some surfing and phone calls. But before the two started to question the legitimacy of not only the company and its management, there were dozens of other “workers” that had thought they had landed a dream job that would not only elevate their design portfolios with big-name brand clients but a cut of the deals they landed.
The Madbird design agency website looked slick, professional and a beacon of hope for many designers. The zoom calls “proved” there were people just like them working on projects, so why would they even question the agency’s existence and that the pitches they were working on were fake? That the headshots and email addresses of the people on the zoom calls were fake – copied and doctored from social media or photo agency sites? That the agency founder, Ali Ayad, reportedly added fake LinkedIn testimonials to the company’s profile?
Hindsight is a beautiful thing, but one of the first red flags should have been that all the agency workers had agreed to work on a commission-only basis for the first six months.
“It was only after they passed their probation period that they would be put on a salary – about £35,000 ($47,300) for most,” reported the BBC.
“Until then, they would only earn a percentage of every deal they negotiated. They were all young adults looking for work and living through a pandemic. Many felt they had no choice but to accept the terms in their contracts,” said the report.
The next sign that something was not right is that not one deal was ever finalised. By February 2021, not a single client contract had been signed, said the BBC. “None of the Madbird staff had been paid a penny.”
While some recruits ended up leaving after a few weeks, many stayed for up to six months in the hopes their projects would get signed, so they took out credit cards and borrowed money from family to pay for bills.
After a couple of weeks working for the agency, Brett was reported to have reached out to Stuart to suss out whether the company actually was in a swanky office and landing clients. When Brett looked into the registered London address, it was a residential building. Brett made calls to the estate agent linked to the property and those working in the building to verify that not only did Ayad not live there, but no one had even heard of him or the company. Then, the two dug deeper and found that the previous projects listed and client logos listed on the agency’s website were copied. The company was a fake.
It was then that the two decided to let others working for the company know via an email of what they had uncovered.
The agency workers were dismayed and distressed once they found out that they had worked for months on fake projects and weren’t going to get paid.
For the most part, freelancers can trust a new client is who they say they are. However, if your sixth sense sets in that something just feels or looks fishy, then do your due diligence. It could save you money, time and your reputation. If you think your new client will be offended, then you can always mention the Madbird scandal and they should understand where you are coming from. Or just say that you had a bad experience once and always do a check on new clients.
Due diligence you can carry out on a new client
- Check out a company’s registered address and if in the UK its Companies House accounts.
- How long has the company really been running: check out the date that the company registered with Companies House?
- If there is an accountant listed to the client you can contact the accountancy form for verification.
- Does the company have an accounts department or payroll company?
- Contact clients that they have mentioned on their site to verify that they are in fact suppliers to the client.
- Do not rely on social media for identities of company founders, look at their previous roles listed on their profiles, then look for any details that can prove they did in fact work at those companies.
- Does a contract leave you out of pocket even if you work in any capacity to the agency/client? What are the payment terms?
- Look on LinkedIn for employees or freelancers that are working or have worked for the company: are they real? Check out their profiles and job history.