Cash Flow

A Risky Way to Get Deadbeat Clients to Pay: Shame Them Online


Self-employed writer and designer Mikey Rox doesn’t like to use it, but every once in a while he turns to a sure-fire method to collect money from clients who don’t pay him what they owe. “I send e-mail after e-mail, month after month, and I get the same, sad sob story or ‘the check is in the mail,’” he says. “Or they don’t communicate at all.”

When every other avenue has been exhausted, Rox has twice posted polite yet pointed questions about his overdue bills on clients’ Facebook (FB) pages. It worked both times: “I’ve gotten immediate responses and payments right away. Shaming these deadbeats on Facebook is my last resort,” Rox says.

Whether you call it shaming or, more gently, “accountability,” freelancers are using social media to solve a perennial problem of not getting paid on time.

After years of being advised to fork out the funds to sue, send bills to collection services for partial returns, or write off losses as “lessons learned,” small business owners have some newfound leverage with bad clients. After all, companies may be intent on privately wearing out small vendors they see as powerless, but their marketing departments can’t as easily ignore situations that go public on Twitter (TWTR) feeds or LinkedIn (LNKD) profiles.

Shelley Seale, a freelance travel and lifestyle writer, tried the tactic in August 2013. A travel publication owed her $800 for several articles she’d contributed, she says, but months went by without payment despite her “bugging and bugging them” about her unpaid invoices. Finally, in desperation, she posted on the publication’s Facebook page and tweeted a message asking “why haven’t you paid your writer as agreed?” She tagged both the publication and the editor’s personal Twitter handle.

“Within a couple of hours he contacted me by direct message on Twitter, very defensive, and 24 hours later I had the money via PayPal (PYPL),” Seale recalls. “He followed up with an e-mail chastising me and saying, ‘You didn’t have to do that.’ I responded, ‘Well, obviously I did have to, since you ignored me for months.’”

Efficient as it may be, the tactic is definitely controversial. First off, it could get you into hot water legally, says Stephen P. Dem, a longtime Encino (Calif.) collection attorney who represents many self-employed people. “Of course we have free speech, and there are safeguards there. But there are legal ramifications of bad-mouthing a business publicly, not least of which is facing the wrath of a millionaire who could sue you and force you to spend thousands on a legal defense,” he says.

Kenneth C. Wisnefski, founder and chief executive of digital marketing agency WebiMax, recognizes that “calling out delinquent payers via social media is something that has begun to gain steam, but I feel it is a very slippery slope. Damaging people on social media can reflect poorly, because it crosses an etiquette barrier—it can make your business, in some cases, look very small and extremely confrontational.”

It’s better to adopt business practices that minimize the chances of nonpayment, many experts say. That involves financial vetting of clients, using legal contracts to avoid payment disputes, and requiring upfront deposits and incremental payments during the job. Freelancers Union, which advocates for the self-employed, has a contract creator on its website that freelancers can use before taking on new clients.

Susan Liautaud, a Stanford University ethics lecturer and consultant who founded London-based consulting business Susan Liautaud & Associates, recommends such tactics over taking to social media. “A culture of smearing people on the Web is a very dangerous place to go,” she says. “However unethical the creditor’s behavior may be, that behavior doesn’t justify bad behavior on the part of another. Shaming campaigns are not respectful, and they’re not a dignified way to treat a client.”

When a website design client stiffed Andy Valde, owner of Chicago creative services business Rockvibe Productions, for $500 a few years ago, he couldn’t bring himself to take the pay dispute public. “It seemed very unprofessional, so I decided never to do that,” he says, though he admits it was tough to see the client drumming up new business with the site he’d designed.

Other freelancers are not apologizing. “I absolutely would do it again,” Rox says. Even if he doesn’t get paid, he figures other small business owners will be warned off working for a bad client. “It’s not like I’m burning a bridge. I’m certainly not going to work with those people again.”

And Seale, for her part, doesn’t worry about damaging her own reputation. “I had so many writers and editors contacting me and saying, ‘Good for you.’ This is one of those negative aspects of being a freelancer, and we’re finally finding a recourse for the small guy,” she says. “I don’t feel bad at all.”

Karen_klein
Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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