Checking Compliance Practices
How to check if a vendor is legit?
How to check if a vendor is legit?
Key Facts
- 96% of companies were targeted by payment fraudsters last year, making vendor verification essential according to Trustpair.
- Organizations performing regular vendor screening cut fraud exposure by over 70% per UpGuard and PaymentWorks data.
- Google and Facebook lost over $100 million combined to false invoices from a single unverified vendor per Trustpair's case study.
- More than half of scams targeting accounts payable departments involved fraudulent supplier communications, per the BBB's 2024 report.
- A European logistics company lost nearly $1.5 million to a fake supplier whose email domain differed by one letter according to a Trustpair case study.
- MediaAlpha paid $45 million to settle FTC allegations over deceptive lead generation practices per the FTC.
- A legitimate marketing agency never guarantees specific rankings or fixed lead volumes, since no agency controls Google's algorithm.
Frequently Asked Questions
What are the biggest red flags that a vendor might be a scam?
Watch for urgency pressure ("pay now or lose the deal"), guaranteed results, vague budget breakdowns, and inconsistencies in documentation — the FTC notes most successful vendor scams involve urgency or document inconsistencies. Also beware of lookalike email domains; one European logistics company lost nearly $1.5 million to a fake supplier whose domain differed by a single letter. Source
Should a vendor guarantee me specific results, like rankings or a set number of leads?
No — a legitimate marketing agency never guarantees specific rankings or a fixed lead volume, because no agency has special access to Google's algorithm. Trustworthy vendors talk in probabilities and realistic timelines instead, since SEO and organic growth typically take months to show meaningful progress. Source
How do I verify a vendor is a real, legitimate business?
Check five pillars: legal existence (official registries), credentials and licenses, financial stability, beneficial ownership (to expose shell companies or nominee directors), and reputation and litigation history. A verified vendor's bank details match genuine bank records, and they don't appear on international blacklists. Source
Is vendor verification a one-time thing, or do I need to keep checking?
It's ongoing. Companies typically verify vendor details at onboarding and rarely re-check them, which is exactly when fraud slips through — 96% of companies were targeted by payment fraudsters last year. Regular screening matters: organizations that do it cut fraud exposure by over 70%. Source
What kind of reporting should I demand from a legitimate marketing vendor?
Ask for live analytics dashboards and monthly reports tied to revenue metrics — conversion rate, customer acquisition cost, and return on ad spend — not vanity numbers like impressions, likes, or follower counts, which are easy to inflate and nearly impossible to connect to revenue. If you couldn't tell whether your marketing was working from the report, that's a red flag. Source
Can my company get in trouble if a vendor I hire breaks the rules?
Yes. The FTC's $45 million settlement with MediaAlpha made clear that a company can't avoid responsibility for deception it facilitates by intentionally burying its head in the sand — you can be liable for a partner's violations if you know (or consciously avoid knowing) about their unlawful conduct. That's why active vendor due diligence is a legal necessity, not just a best practice. Source
Want help putting this into action?
Book a Growth Call