Scams, Frauds, and Bad Deals: Protecting Athletes in the NIL Era

Introduction

Since the introduction of Name, Image, and Likeness (NIL) rights in 2021, student-athletes have stepped into a new world of opportunity and risk. While NIL deals offer life-changing income, they also attract unethical agents, scam artists, and bad actors looking to exploit young athletes with money and influence.

For athletes who are new to contracts, business, and financial decisions, one bad deal can cost more than just money, it can damage reputations, eligibility, and future earning potential.

In this article, we’ll explore:

• The most common scams and frauds in the NIL space
• Red flags to watch for in agents, deals, and advisors
• Practical steps athletes can take to protect themselves
• Why education and the right team make all the difference

1. Why Athletes Are Vulnerable in the NIL Era

Student-athletes, especially those earning money for the first time, face unique challenges:

Lack of experience with contracts, taxes, or business negotiations

High-pressure environments with agents, brands, and fans all vying for attention

Limited access to trusted legal or financial advisors

Belief that "everyone is trustworthy if they seem legit"

These factors make them prime targets for:

• Scams
• Predatory deals
• Identity theft
• Mismanagement of funds

Being aware is the first step toward protection.

2. The Most Common Scams and Bad Deals in NIL

⚠️ Fake NIL Agents

Scam agents promise deals or endorsements in exchange for upfront fees. Many are unlicensed or unverified, offering big promises with no delivery.

Red flags:

• Asking for upfront fees
• No track record of success or references
• No formal contract or vague terms
• Pressuring you to sign quickly

⚠️ Shady NIL Collectives

Some NIL collectives offer athletes money with strings attached like signing with a specific school or giving up rights. Others are simply poorly managed or completely fraudulent.

Red flags:

• Lack of transparency in how money is distributed
• Asking athletes to commit without clear legal terms
• No official partnership with the school

⚠️ Phishing & Identity Theft

Scammers impersonate brands or agents to get personal info like Social Security numbers or bank account details.

Red flags:

• Emails or DMs from unknown sources with broken grammar
• Requests for sensitive info without a formal agreement
• Links to sketchy websites or platforms

⚠️ Bad Contracts

Many athletes unknowingly sign contracts that:

• Give away exclusive rights to future earnings
• Include lifetime commitments with no exit clause
• Force the athlete to pay high percentages or hidden fees

Red flags:

• Long, complicated contracts without legal review
• No clear explanation of deliverables, payment, or duration
• No cancellation or termination language

3. Real-Life Examples: When NIL Goes Wrong

• An athlete signed a $25,000 NIL deal only to discover it was actually a loan with high interest rates and a payback clause buried in the fine print.
• A five-star recruit signed with a marketing firm that took 40% of every NIL deal and locked him into a 5-year contract, even beyond college.
• A gymnast shared banking info with a fake brand and had thousands withdrawn without authorization.

These situations are increasingly common and preventable.

4. How to Vet an Agent or NIL Opportunity

Before signing anything or giving away information, take these steps:

1. Ask for References and Track Record

A real agent will be able to:

• Share successful past NIL deals
• Provide contact info for other clients
• Explain their credentials (law degree, agent license, etc.)

2. Get Everything in Writing

• Always ask for a contract before doing any NIL work
• Review terms carefully, how long does the deal last? What are your deliverables? How will you be paid?

3. Do Background Checks

• Google their name + “scam” or “lawsuit”
• Check LinkedIn and professional directories
• Ask your school’s compliance office or legal advisor to help

4. Watch for High-Pressure Tactics

If someone’s rushing you to sign or saying “this deal won’t last”—walk away.

5. Build a Trusted Team Around You

Every athlete should have a NIL protection team that includes:

• A sports attorney – to review and explain contracts
• A financial advisor – to help with budgeting, taxes, and investing
• Your school’s compliance office – to ensure eligibility and transparency
• Mentors – former athletes or professionals who can offer real-world insight

Pro tip: Avoid letting friends or family with no financial or legal experience manage deals. Good intentions don’t replace professional expertise.

6. Use These Tools to Stay Safe

🔐 Secure Communication Channels

Only discuss NIL through official emails or verified phone calls. Be cautious on Instagram DMs and text messages from unknown numbers.

📋 Contract Review Checklist

Before signing, make sure the contract includes:

• Clear compensation terms
• Scope of work and expectations
• Duration and termination clause
• Ownership rights (name, image, content)
• Tax implications and payment timelines

📈 Track Your Deals

Use a spreadsheet to record:

• Every NIL deal
• Who you worked with
• How much you earned
• What you delivered

This keeps your NIL activity organized and compliant for taxes and audits.

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7. The Role of Schools, Coaches, and Collectives

Athletes shouldn’t be left alone to navigate NIL. Schools and collectives must take responsibility by:

• Offering mandatory NIL education workshops
• Providing access to legal and financial advisors
• Vetting NIL collectives for ethical practices
• Creating a database of approved vendors, agents, and sponsors

Athletes, parents, and coaches must work together to build safe, transparent NIL systems.

8. What to Do If You’ve Been Scammed

If you think you’ve been a victim of a scam or bad deal:

1. Contact your school’s compliance or legal team immediately

They can help assess the damage and prevent further issues.

2. File a report with the Federal Trade Commission (FTC)

This helps protect others and creates a record.

3. Hire an attorney

Legal help may allow you to terminate or renegotiate harmful contracts.

Conclusion: Protect Your Brand Like a Business

NIL isn’t just about followers and sponsorships, it’s about building a business. And in business, scams are real. But with the right education, advisors, and protections in place, athletes can avoid bad deals and maximize their NIL potential safely.

Want help reviewing contracts or building a trusted NIL team? Let’s talk.

I help athletes make smart money moves and avoid costly mistakes.