Today’s episode is going to be a culmination of a lot of lessons that I’ve learned recently through my own experiences and my client’s experiences. We’re going to talk about how to spot a scam artist. I’ve done a few reels on this on instagram (shameless plug >>> @ninathelawyer) and it’s all fun and games. Read on to learn the 6 questions to ask yourself when you are trying to spot a scam artist!

1. Do They Use a Contract?

Red flag #1….If you are newer in business, you might not know the importance of using a contract and think that you can’t afford it… BUT my question is to you >> can you afford NOT to use a contract? I’ve had clients not pay me this year and I’m so grateful for my contract. Because when they’ve tried to throw in my face that it was my liability and the risk I was willing to take offering payment plans, I could go back to the contract they signed. My liability is covered in my contract which they signed voluntarily out of sound, mind, body, and soul. And in that contract, I protect my liability of offering a payment plan by having things that say: I can collect late fees if you’re more than 10 days late. And I can report you to a collection agency and recover fees of me having to track you down, such as:

>> The admin costs of me or my team’s time (creating new invoices, sending you emails, and dealing with your bullshit in the DM’s) 

I can collect those fees because my contract is drafted in such a way where it says, you acknowledge that I have the right to collect legal fees, as do you. 

If she had to sue me for something and won, she could collect legal fees to those terms that are in the contract. The legal terms for whoever breaches the contract is in there to protect the other person if they have a claim under the contract. So when someone says that they can’t afford to use a contract, I say, can you afford not to? I spent four months with this person inside of CEO skills, which is the only way to work with me in a high touch capacity. She came to every call and I spent so much time with this person…

>> Gave them so much insight

>> Gave them so much information

>> Gave them so much of my time and energy talking to them

I didn’t skimp out on services or advice. If you’re in a contract or container with me and you don’t pay, I know that my contract protects me. I’m going to keep delivering the services until the time comes. So if you or someone else thinks that they don’t need to use contracts because you only need to use “soul contracts”, this is a red flag. If you aren’t using a paper contract and then pay 5k for a program and never get in writing what you are receiving, you may have problems down the road. I’ve been on too many phone calls with people who have paid 10k, 20k, and even 30k to life coaches, business coaches, or trauma coaches just to have them not honor what they had said. They are having sales calls, which are verbal and there’s no recording for you. And then you wire them 30K and you have nothing in writing that says what they’re promising you. And then six months later, realize you have:

>> Only had three phone calls (5 things had been rescheduled) 

>> The retreat was cancelled

So when someone says “I don’t use contracts, I use soul contracts,” this says to me that they have no intention of committing to their word or acting with integrity. Because if they did, they would have no problem putting it down on paper. And yes if a problem arises, it still can be fraud even if you DIDN’T have a contract…BUT you’re dealing with:

>> A lot more drama

>> A lot more energy going into resolving something

>> A lot more money because you are paying up front in legal fees

And without a contract, you don’t know if you can collect those legal fees from the court if you do have to sue, because every state has different laws. But if it’s in the contract, then it’s in the contract and you’re agreeing to that because those laws control. So make sure to use a contract!

2. Are They Skilled and Experienced in What They’re Selling? 

Not everybody has a law degree, a bachelor’s degree in neuroscience, or a doctorate in psychology. That doesn’t mean that you don’t have knowledge about contracts, it doesn’t mean you don’t have knowledge about the way the brain works, it doesn’t mean that you don’t have knowledge about trauma informed healing, but there are people out there who also don’t have anything but their own experience. Your own experience is great, and especially for the coaches that use healing modalities or spirituality, this can take you very far. Even in business coaching, your own experience can get you far in the beginning.

There comes a certain point where that’s not going to cut it for the prices that some people are trying to charge. I see people out there who are charging 5k for a business coaching program and they’ve only ever worked with their business. They don’t have experience on the inside of other people’s businesses getting those results. For example >>  as a lawyer, when there is a dispute I get insight to information that is confidential for my client and the other client. I’m at the table with them when they’re:

>> Talking about strategy

>> Making decisions about whether they should hire that consultant 

>> Making those decisions about whether they should launch that product because of their finances

>> Making the decision as to what kind of trademark or brand protection they need

>> Talking about the negotiations they are dealing with

That gives me, not only my experience from running my own businesses, but I have the inside scoop on all of my clients experiences. And in the last two years of running my company online and only working with online entrepreneurs, I’ve now worked with over 560 clients just in online business. I’ve seen a whole wide array of clients and not only on a surface level, but on a deep, confidential level. And that gives me a different perspective than I would have if I only had my own.

It’s great that there are life coaches, business coaches, and healers out there who are speaking from their experience but question the prices that they’re charging. And if it’s you and you’re starting out, charge prices that reflect that you only have your experience and that will incentivize people to work with you. Then you can have the experience of learning about their life and getting as much experience as possible. 

This way you can say >> “I’ve worked with over 10 people from five different countries and all these different backgrounds and all these socioeconomic conditions.” You’re getting that higher perspective and then you can elevate your prices to match that. So “scam artist” is a strong word for this, because not everyone’s going to start out with experience. And it doesn’t mean that your experience isn’t valid >> But is it as valuable as you as your coach tells you to charge so they can boost their own reputation? Or are you charging a price that’s relevant for the level of experience that you have and invites other people to come and work with you so that you can keep building that experience exponentially? 

Niche Specific Disclaimers

Also, when you are working with someone there are niche specific disclaimers that different businesses need to use. A big red flag is people who use the word healing or therapy that are not therapists. I know at least in New York State, it’s illegal for you to say or sell anything with the word therapy attached to the marketing if you are not a licensed therapist. That even goes for something like hypnotherapy.  There are certain states in the US where you cannot sell or present yourself as a “hypnotherapist” unless you are a licensed therapist in that state. You have to make sure that you are using the right language in your contracts that are compliant in your state. And if you don’t even care what the regulations are and you are trying to ignore them it shows that:

>> You’re not aware of anything except your own business

>> You’re not concerned with the bigger picture

Some of these regulations are placed for the safety of you, for the safety of your clients, for you to be able to get insurance, and for you to not get sued. 

>> So here’s how you get around that in New York. If you are a hypnotherapist, you’re not allowed to say hypnotherapy. You can say non therapeutic hypnotism. Only a licensed therapist in New York State with the qualification certification in hypnotherapy can perform hypnotherapy. So what does it mean? 

>> One of them is self-hypnosis

>> The other is practiced by a hypnotherapist who is a trained, licensed, and/or certified professional

Each state is different. Some states you can say hypnotherapy, some states you can’t. Which is why I have niche specific contracts in my “scale your biz bundle!” So you are covered in the disclaimers. 

These kinds of regulations exist to help the consumer. When they are looking for hypnotherapy they have the right to know if >> this someone who just got certified in hypnosis and never did anything yet or if this someone who is a licensed therapist and has done this for a thousand people. I believe that your price should reflect that. And this doesn’t mean that you can’t be a very experienced person and charge low ticket. I have my contract templates that are “low ticket” respectively compared to my other legal services. I don’t believe that can go the other way. If you are a new business owner, make sure your prices reflect this. Use your judgment with what you charge and who you buy from. Don’t just charge prices based on what you think or you’re told you should charge. 

“Catch-All” Services

Make note of the businesses that are trying to be a “catch all” service! There are a few creators that I have seen do this. One is a marketing professional that runs her business with her husband. I saw a VIP week that she did and her husband gave a legal discussion. That is why these regulations exist, this is called unauthorized practice of law. Because without having a law license, you could be harming people if you are generalizing it. Just because you know something about contracts, doesn’t mean you should be teaching on it. There’s another person that tries to post about everything from how to start a business, how to write your website copy, how to get an LLC, and trying to be a one stop shop. So be mindful of these people because they might not be experienced in what they are selling. 

3. Is Their Team Real or Do They Just Make Up Email Addresses and Names? 

This sounds ridiculous, but let me give you an example. Some people have different emails for “pretend team members”. This happened within the story of Anna Delvey. She was a New York City socialite who moved there from Germany. She was staying in all of these expensive hotels and then skipping her bills and racking up like 20 thousand dollars. It turned out that she was a fraud the entire time. She was taking out loans to pay off other people and getting into debt. She just was scamming people to give her loans.

One of the things she would do is have fake email addresses for her “accountant”, “trust fund manager”, or her “assistant”. And for those of you who want to learn more about her, you could watch the series “Generation Hustle”, which is all about con artists. I have been dealing with someone who has been using fake names and changing their email all the time. I have had multiple people contact me about her being a scam artist. So if something seems off with their team and email addresses, look into it. 

4. Are They Using THEIR Real Name?

A lot of people operate under pseudonyms. And many people don’t have a business registered as an LLC or C-corp. So do you have a way to find their real name or their contact information? If you wanted to track them down and you don’t know their name or residence, it’s going to make it difficult to move forward with any kind of dispute that comes up. This is what having a registered corporate entity helps with. 

If someone fucks with me or my client, I can pull up the corporate records from the state where I think they are from then I would figure out:

>> What the name of their LLC is

>> What their official legal name is

>> What their address is

You need to have a registered agent address on record for people to send you mail in person (it can’t be a P.O. box). That’s part of our due process in America. You need to be able to physically hand them something if you’re going to sue them. And so that’s why you need an address on record if you’re an LLC. If you are worried about having an address on file, question your intentions. Hopefully you are doing your best to act with integrity and never get sued. If you get served with a lawsuit at your physical address it’s easier than having a court subpoena you, enter a default judgment against you as Jane Doe, and then find out your real name five years later. And you would still owe them all the money and be in contempt of court which can sometimes put you in jail. So make sure that YOU have an address on file as well! 

Real Life Example >> Many people are coming to me to see if I could represent them in their breach of contract claim against a certain person. I noticed when I searched her corporate records, she had just filed for her LLC two weeks before signing all these contracts with people. She had used one name on her corporate records (because they would track her down with taxes) and then another name for contracts (so she didn’t have to pay any of these people). 

So what I do when I try to find someone’s real name is: I go to their website, I click their privacy policy and their terms and conditions because those are required by law. Every single website is required to have a privacy policy. And this is where I can also tell if people steal contracts from other people because they don’t change it. So in the privacy policy, it should say, “this website is owned by: their real name or their company name, and their domain name and their contact info for the email address. 

And this is NOT a scam artist, this is just an example >> If you go to the website of one of my favorite podcast hosts, Sahara Rose, you will see her last name under the privacy policy. So if you did need to contact her, you can go and try to find her LinkedIn, or you can go to the state where they’re “from” and look at the corporate look up. A government website will come up where you can search for an entity name and see the address. 

A lot of times, these addresses are registered agents. They’re not their person’s actual address. It’s a registered agent where YOU can make yourself a registered agent or you can use a different address so that no one comes to you and knocks on your door. But it’s someone who you tell the government, yes, this person can accept paperwork on my behalf. A big part of my job as a lawyer is making sure I can find someone’s real name and real contact information. This is so they can make sure that I have a paper trail of why I’m naming this person if I have to have a court case against them. 

5. Is Their Business Really Worth What They Say It Is? 

My brother used to work for WeWork and part of what he was promised when he was signed on was stocks that would mature in X amount of years. So they would offer a lower salary but they would let you know that in a few years, the stocks will be worth X amount. BUT this was a scam, they lied about what they were worth. They lied to secure investors, which is fraudulent inducement. WeWork was claiming they were valued at 20 billion dollars which wasn’t true. Click here if you want to learn more about this shady settlement.

What I want you to look out for and avoid is this sentiment of “I’m a seven figure company.” Without actually qualifying those income claims. A 7 figure company doesn’t mean that you earned 7 figures over the course of a few years…just because you’ve spent a million dollars in your life doesn’t mean you’re a millionaire. So when you say I’m a 6 or 7 figure company, it has to be in the fiscal year. So when I say I’m a 6 figure company, it’s because I earn six figures in a fiscal year. I don’t say I’m a multiple six figure company because my income last year was, let’s say, 140k >> that doesn’t make me a multiple six figure income business. That means you crossed six figures.

Let’s break this down:

You see people saying multiple 6 figures because they’ve earned 100,001….multiple 6 figures would be something like 200k in one year. A 7 figure company is someone who has earned 7 figures in ONE year. Someone who values their business at 10 million dollars is because today they have 10 million dollars worth of assets between:

>>  The amount of income that they’ve earned

>> Property that they own, such as trademarks. Trademarks add tangible value to your business. Or real estate that has a current market value at a million dollars. 

That’s what it means truly when people say “I’m valued at 10 billion or my company 6 or 7 figures” A lot of people are misleading when they are talking about this. And when a lot of people talk about their launches, they talk about how much money they made in the launch including payment plans. And then the next month they’re going to say, “I had a 40k cash month.” But most of them counted that money from the payment plans LAST month when they said they had an 800k launch.

It’s one thing to say it to people on Instagram, because the laws haven’t caught up. It might seem like this world is very infiltrated, it’s very big and saturated. But the world of Instagram, online business, business coaches, life coaches, is very new. And if you’re not in this community, you don’t know. And when more people are screaming from the rooftops that this is a lucrative industry, they are inviting in:

>> The IRS

>> The government

>> The regulatory bodies who want to put their hands in everybody’s pocket 

All these government agencies and they will eventually say, “now you have to have this license to call yourself a life coach or business coach”. So beware of what you’re saying.

And if this was not in the online space and you went to a business presentation to investors and you had a pitch and said: “Last month we made 800k on this product launch and this month we’re having a 40k cash month.” And you’re using the same numbers from both sides, they would call you out on that. That would be fraud because you are misrepresenting things to induce people to sign a contract with you. 

It is called fraudulent inducement. This is way scarier than a breach of contract because you don’t want to be in public records (that are searchable) as being a fraud. So when you are on Instagram presenting these numbers, think of how you would do it in a room full of investors. And ask yourself >>> would they think I’m a scam? And I’m not saying that to be mean or to diminish your success, I’m just asking you to look out for these things. Look out for this when you’re thinking about “should I pay 5k to go work with them?” Make sure their business is worth what they say it is.

6. Do They Focus on More Than Sales and Marketing? 

Do they focus on more than just marketing & sales including:

>> The systems

>> The infrastructure

>> The health and safety

>> The client experience

>> The legal shit

This is what my signature program CEO Skills is all about. If you join the waitlist you will get exclusive access to certain packages, discounts, and you’ll be the first to know, no strings attached! I am breaking this up into the three phases of business. And you go through the phases and then you circle back to the phase and you revisit each one. That’s how you build a sustainable company. So all the content inside CEO Skills is going to be organized into phases so that you can understand what to prioritize based on where you are at in online business. AND you will have lifetime access so that you can come back to different phases. This will be the first round where you could buy the self-paced version of the templates, tools, trainings, and everything that comes with it without paying for the coaching with me or the networking. I am adding in more practical things like setting up your Notion and giving you templates so you have systems in place. This will be more intentional, more transformational, and more custom to you in the different phases of business. So make sure to get on the waitlist!

Make sure to use this post when you are signing up for programs and desiring to work with someone! Remember to ask yourself these questions >> do they use a contract, are they skilled and experienced in what they are selling, is their team real, are they using their real name, is their business worth what they say it is, and do they focus on more than just marketing and sales? Protect your energy and spot the scam artists before you get into a dispute!

CONNECT WITH NINA >>

@ninathelawyer