The Channel’s Dirty Little Secret

By Khali Henderson

I may be the last to know, but I’ve just been clued in to the channel’s dirty little secret.

It seems there are some agents conspiring with direct salespeople to get compensation for deals they didn’t work.

As I understand it, the scenario goes something like this:

• The direct salesperson closes an account that qualifies for teaming.
• The direct salesperson puts the agent’s name on the order as part of the team sale.
• The direct salesperson and the agent are BOTH paid commission for the sale.
• The agent kicks back half of the commission he or she earned to the direct salesperson, who is a subagent for the agent – albeit through a third party, e.g. a spouse or sibling.

Apparently, this has been discovered by some carriers that offer teaming between direct and indirect sales channels. I am not sure how they have handled it, but dismissal of the employee and cancellation of the agent contract would be a good first step. Legal action for recovery of the “unearned” commissions might be another.

Besides being unethical and illegal, this seems to be a major slap in the face to carriers that have attempted channel integration – something agents say they want. I am not sure how an agent can justify being part of such a scheme.

If you can, fill me in. Post a comment below.