About a week ago I got an inquiry from a Mr. Smith who wanted to host a surprise wedding anniversary for his disabled wife. I quickly responded to his email inquiry and asked him the essential questions: when, where, why and how much? He was expecting 100 guests, he knew the menu he wanted and that he needed a venue, dj, and photographer. He was tasking me with finding the venue, his vendors, decoration, and full event planning because, as most people in today's busy world, he had absolutely not time to put a party together.
We corresponded via email for about two evenings before he decided that I was the right person to plan his anniversary dinner. We finalized a fee, the contract and an invoice was sent to him. Here's where the story goes sideways: Smith is a common name, so when the contract came back with a typed signature it just made my Spidey-senses tingle. No big deal I thought, I'm a little wary about a lot of things so maybe I'm just being paranoid, but then he texted me and asked me to send him another invoice. This invoice was for him to send me money to pay his dry cleaner to launder his disabled wife's gown, it was for $3,000. Spidey-senses are now kicked into hyper-drive at his constant reminder that his wife was disabled. Long story short, I told him I do not act as liaison between clients and vendors. I reminded him in our initial communications that I will source the vendors but he is responsible for approving, contracting and paying them. He asked me to do this as a favor and when I told him I could not, he promptly dropped me as his planner.
Now you may be thinking that he was going to give me the money to take care of this for him so what's the big deal. Well, first of all, why is the dry cleaner $3,000 and secondly... why the heck is the dry cleaner $3,000??
The reason this is an issue is because not only would it put me on the hook to exchange money to a vendor I had no involvement with, but it could have also possibly made me, as the FBI calls it, a "Money Mule".
A Money Mule is a person, knowingly or unknowingly, who fraudulently transfers funds from one organization to another. According to FBI.gov "the ask comes through a job posting or from someone you meet online. It seems simple and harmless enough: provide your bank account information and allow money transfers to flow into your account. Then move the money elsewhere and maybe earn a little cash for the trouble...You are likely aiding criminals by acting as a money mule, which can land you in prison and permanently damage your financial standing." No thank you!!
After receiving his text that he could not move forward with me, I thought to myself "I wonder how many new or young planners fall privy to this sort of ask?" "If I did not have the experience that I had and was anxious to sign a new client, would I have taken him up on his request?" As a seasoned professional, it's easy to stand firm in what you are and are not willing to do, but as a new company owner or a newly minted planner, how susceptible could you possibly be to falling for the enormous amount of scammers that contact you every day (and I do mean EVERY day)?
Besides the Money Mule scam it is important to know when and/or if it's okay to float an expense for a client. Maybe it's not a huge expense, or maybe you know the client or you just know they're good for it; but always keep in mind that paying for expenses acquired from third party vendors such as the caterer, the printer, the photographer, whatever, puts you on the hook for any missed or late payments. It could lead to your reputation within your vendor circle tarnished if the client cannot or will not pay, and most of all, it means you'll have to. This includes signing contracts on their behalf.
So that's this weeks chronicles of a small-business owner. I hope that you, my fellow professionals, hueman beings, and super-sheros, will remain vigilant and that you won't allow ANYONE to put everything you work so hard for -- your livelihood, dreams, and reputation in jeopardy.