People who work in sales frequently earn commissions or bonuses based on their performance. Even if they don’t, their job security is largely tied to their performance and the performance of the company as a whole.

Some salespeople get into the profession because they are smooth talkers. They may have the ability to convince anyone that a purchase would be in their best interests. While that kind of charisma and skill can absolutely help someone close more sales, in some cases, it could open your company up to allegations of business fraud.

Creativity in sales pitches is legal, but outright lying is not

Depending on what your company produces or sells, there may be a variety of tactics employed in order to overcome people’s reticence to spend money. Salespeople sometimes overemphasize the benefits that a product or service might offer a specific person. They might exaggerate environmental or social threats to make the product seem more necessary.

Taking small creative liberties in order to get someone to consider a product isn’t necessarily wrong. However, knowingly making inaccurate or misleading statements to a potential client or customer could constitute fraud.

For example, if your salesperson promises a function or feature that your company cannot deliver, the individual who completes the purchase may have done so solely because of that specific feature. Individuals who experience this may feel lied to and manipulated. In some cases, they may even have grounds to take legal action against your company.

White-collar crimes and business fraud can damage your bottom line

As the owner or operator of a company, you have legal and ethical responsibilities regarding the behavior of your employees and the practices that your company engages in. If there are fraud allegations against your company, it could damage your reputation and your sales.

Making sure that sales staff know that lying or tricking people into sales is not an acceptable practice, ideally in writing as part of their employment contract, can help protect you against salespeople who take extreme steps to close a sale.

If you find yourself implicated in the questionable behavior of a salesperson that you did not know was going on, you may need to look into options for defending yourself or possibly your business.