How to Protect Your Interior Design Business from Fraud

Last Updated on January 24, 2024 by SampleBoard

There are many challenges facing the interior design business, but fraud seems to be one of the top lists. With many entrepreneurs taking their companies online, scam in the industry has multiplied. 

Millions of hard-earned dollars have been lost to tricksters over the years, and the number of losses keeps increasing.

Many companies in the industry are left in an awkward position of trusting a goodwill client because most cannot tell if this client is genuine.

If you own such a company and you are wondering how you can protect your business from scammers, you are reading the right article.

In this article, we will discuss the common types of cons in this line of work, how you can identify them, and how to protect your work from them. 

Image credit: Pinterest

Types of Interior Design Fraud

We will summarize interior design fraud into three: 

  • Intellectual property fraud 
  • Fraud by false pretense
  • Overpayment scam

1. Intellectual property fraud: 

This is one of the biggest fears that interior decorators face. Intellectual property fraud was easier to deal with before the advent of the Internet.

Before, when a client wants to take a look at the drawing, the entrepreneur takes it to them for a presentation. After the presentation, the owner can go back to the work. 

But today, it is hardly so. It is easier to mail the drawing to the client and do the rest of the talking via phone or electronic messages. 

Fraudsters know this. They will get a decorator to send them a proposed design but will reject it afterward or claim that they have accepted one from another professional.

These deceitful clients will end up not paying for the work but end up using it without the permission of the owner. 

The whole aim of the supposed client from the get-go was to get the interior decorator to do it without them paying.

Many company owners have spent time and resources creating these drawings but lost their creations to tricksters.  

2. Fraud by false pretense: 

Many companies that are mostly online face this type of scam, and interior decorators are not exempted from it.

Many scammers are online pretending to want to do business but are looking for how to extort money from these decorators. 

They usually use email to communicate with their victim. These scammers pretend they have a large property that needs renovation with a promise to pay a huge amount of money to get it done. 

Some may even make little deposits to get you to trust them. Later, they may come up with stories about wanting to buy some materials or paying for delivery of materials needed for the work but cannot due to one reason or the other. 

They will end up asking their victim to make the payment so that when all is good, they will be refunded. Because of the trust that has already been developed, a lot of people fall for this. 

3. Overpayment scam: 

In this case, the scammer deliberately overpays you with a cheque and asks you to wire the difference back.

Usually, they will mount pressure on you to quickly send the difference within the shortest possible time. 

The cheque they issued to you will eventually not clear, but by then, you have ended up sending them your money. 

How to Detect Fraud in Your Interior Design Business

Scammers are constantly improving their methods to swindle home decorators, hence the need for interior decoration company owners to be smarter to be ahead of them.

Here are red flags that can help you spot con artists. 

1. Be watchful of first-time emailers: 

Most scams come from new contacts. If you have not done a successful job with a new client, you should be careful. Don’t get yourself over-excited because you think you are about to land a new client.

2. Emails that propose large payment: 

To get their victims excited, scammers can propose to pay $10,000 for a service that should cost less than $5,000.

This may be the type of person who just wants you to send your work without the willingness to pay. 

3. Emails not requesting details: 

When you are communicating with a client, and they are not interested in your company's reputation, quality of delivery, or basic details that a genuine client would want to know, then you need to be careful. 

4. Clients that are too in haste to close a deal: 

There may be genuine reasons why a client may want your services in the shortest possible time, but most times, con artists are usually in a hurry to close the deal and move to the next victim.

When you see this, tread with caution. 

5. Request for payment: 

When a client is asking your company to cover the cost of shipping, delivery, or forwarding with the promise of refunding you later, this is a huge red flag. 

6. Clients requesting a change in terms and policies: 

When a client asks you to change certain important terms of your company, you need to be watchful. 

How to Protect Your Interior Design Business from Fraud

Now that we have explored the major types of cons interior decoration companies are exposed to and how to detect them, we can move to the next step.

Knowing how to protect your company from these tricksters is key to ensuring you do not fall victim to their tactics.

Here are five ways to make sure you do not lose money to scammers:

1. Have well-defined terms and policies: 

Having well-defined terms and policies can save your company many issues.

Some of the terms and policies you should share are those of emailing a decoration sample, shipping and forwarding, payment, etc. 

When these policies are well-defined, you will have a base from which you can begin dealing with a new client.

It will be assumed that clients are okay with the way you do your business before deciding to contact you. 

2. Digitally protect your designs: 

Although the use of the internet created an intellectual property problem, it also created a solution.

When you want to email your work sample to a client, especially a first-time client, it is important you use document protection software. 

These software are made to help interior decorators share their work while being in control of their creations.

Clients can view the drawings but are not in control of it. They cannot download, print, or share it. 

Some of the software even has a self-destruct feature immediately after the client has finished viewing it.

In addition, you can digitally share a teaser of the work pending when the proposal has been accepted.

3. Investigate first-time mailers: 

When you receive emails from first-timers, don't be quick to respond. Make sure you investigate the email by searching it on Google.

You can also search the name of the email to see if anything comes up on Facebook, Instagram, Twitter, LinkedIn, etc. 

When you start communicating with the first emailers, ask basic questions like names and addresses and try to verify them.

When the client shares any other information with you, investigate it. Don't let your guard down until you have closed the deal. 

4. Don't limit communication to just emails:

If someone is willing to pay you their hard-earned money for you to do a job, then speaking with you via phone call will not be a problem. 

Once in a while, propose communication through a phone call. Aside from the fact that speaking with the person via phone is reassuring, you can also use the phone number for your personal investigation. 

You can look up this phone number on PhoneHistory to get more information about the person. Also, request for a video call. 

5. Be careful as soon as money is involved: 

Never help a client pay for any shipment or forwarding, most especially if they are a first-time client. Don’t be quick to refund the overpayment. Make sure the cheque clears before refunding the overpayment. 

If the client insists on the payment, write them a cheque, and this should be clearly stated in your policies and terms. And don't allow any new client to cajole or bully you into changing your policies. 

Final Thoughts

Today’s digital world has made it easier for fraudsters to swindle interior design business owners. 

You can protect your business by having well-defined policies and terms, digitally protecting your creations, investigating first-time emailers, using other means of communication, and, very importantly, being careful whenever a payment is involved.