Extortion by Upwork

20801ef7 · ‎09-19-2019

I have for the past few months been in "dispute" with Upwork over a recent contract that has ended in what is clearly extortion.

My freelancer completely refused to hand over work I had paid for as part of a milestone which in accordance with Upwork's terms and conditions was legally mine. The freelancer would only release the work when all milestones were completed. As Upwork was absolutely powerless to intervene I was left with no choice but to pay for all the milestones although the work was nowhere near completed. This is extortion, through the Upwork platform.

I have been in discussion with Upwork for months who refuse to confirm that work paid for as a Milestone belongs to the client. With this in mind I would suggest anybody considering using Upwork seriously reconsiders as in reality your freelancer can do whatever they want and you left with no rights at all.

I would be very interested to learn of other similar cases.

versailles · ‎09-19-2019

Alan W wrote:

I would be very interested to learn of other similar cases.

You many not have much success with this since what you are describing is very uncommon. The way milestones work is that one milestone = one deliverable.

A freelancer submits the deliverable, the client reviews it and then either releases the milestone or requests changes. If the client says nothing, the milestone is automatically released after 14 days. If the client presses the request changes button within this time frame, the release of the milestone is blocked and a new 14-day period starts.

A client does not release any milestone before having received the deliverable. Any different use of the escrow service may have unpredictable results.

Fixed-Price Escrow Instructions

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"Where darkness shines like dazzling light" —William Ashbless

20801ef7 · ‎09-19-2019

Thanks for the reply.

The freelancer would not release the milestone until paid, so not sure how I would have avoided this situation. The actual issue is how completely ineffective Upwork have been. If every freelancer did this the platform would be completely useless.

versailles · ‎09-19-2019

Alan W wrote:
Thanks for the reply.

The freelancer would not release the milestone until paid, so not sure how I would have avoided this situation. The actual issue is how completely ineffective Upwork have been. If every freelancer did this the platform would be completely useless.

The freelancer doesn't release the milestone. You do. They request for the milestone to be released.

If they refuse to deliver, dispute the request of the release of the milestone. Or press the request changes button, you can use it after each request from them and this lilttle game can last forever.

If you dispute, read the instructions.

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"Where darkness shines like dazzling light" —William Ashbless

hoyle_editing · ‎09-19-2019

The freelancer can NOT rlease the milestone - only the CLIENT can release the milestone.

as a CLIENT you should receive the work from the freelancer, review it and then release the funds in escrow.

IF the freelancer is saying that you need to release the money before they supply the work then as far as i am aware they are wrong. That is the whole point of escrow.

On the other hand, as the client, you hold the trump card - if the freelancer has not provided the work then you should not release the funds, if they request the funds before submitting work then you can request changes (i.e. the change would be "please provide the work")

hoyle_editing · ‎09-19-2019

Alan W wrote:
As Upwork was absolutely powerless to intervene I was left with no choice but to pay for all the milestones although the work was nowhere near completed. This is extortion, through the Upwork platform.

At the point the freelancer refused to hand over any work without any milestones being paid FIRST i would have explained that the work needs to be handed over first as per the escrow system.

Your "choice" would have been to NOT release the milestone - i dont understand why you would do it if the work has not been completed.

moonraker · ‎09-19-2019

It seems you recruited poorly and did not take advantage of the protections in place.

Upwork has its faults, but I don't see how you can blame this on them. They provided a system to prevent this and you didn't use it. That's on you. I especially can't see how upwork can be accused of extortion in this case, this is a freelancer issue.

20801ef7 · ‎09-19-2019

The simple reason this is extortion is that I had to pay for all milestones before the freelancer would release any source code as Upwork was completely powerless/useless to act.

I asked Upwork for help after a particular milestone and they were unable to even confirm what their terms and conditions were for this scenario, let alone apply any action on the freelancer. As mentioned, Upwork have been completely and utterly hopeless.

prestonhunter · ‎09-19-2019

Upwork has a very effective system that supports clients. The entire system is client-centric.

I am very sorry that you had a disappointing experience. This was caused by two problems that compounded:

1) The freelancer acted inappropriately. The freelancer should have released each milestone as he completed the work. This freelancer's behavior was completely unacceptable.

2) The client did not understand how to use Upwork properly. The client should never have released any milestone payments without having received and reviewed the work.

The client has nearly all the power here. Unfortunately, the client did not use that power.

There is no fault that I can see on Upwork's part. As Upwork is NOT a project management service or a supplier of products or work, I am not sure what Upwork itself could do differently here.

Alan: Is there some change that you would like to see Upwork make?

20801ef7 · ‎09-19-2019

Thanks for the response.

As mentioned, the freelancer absolutely refused to provide any output from the milestone until it was paid for, so not possible to follow the normal steps.

As for the entire system being client-centric, this example clearly proves differently - the support from Upwork has been almost laughable.

moonraker · ‎09-19-2019

Alan W wrote:

As mentioned, the freelancer absolutely refused to provide any output from the milestone until it was paid for, so not possible to follow the normal steps.

The normal steps are to just not pay on any milestone until the work has been delivered. It is not Upwork's fault if you have not followed that.

hoyle_editing · ‎09-19-2019

Then that sounds like a bad freelancer! I can only assume that they had no/little/bad history on the platform?

I am sorry you have experianced this, but i think you would find most freelancers are certainly not like that!

In hindsight, you should NOT have released the milestone payment before work was provided and at the point the freelancer refused you should of reported them to Upwork and sought a decent freelancer to complete your task.

Having said that, hindsight is a wonderful thing, but doesnt help you now im afraid.

I hope you give the system another try, we are not all bad. Maybe do a little more research on the freelancer before awarding the job if you do try again 🙂

prestonhunter · ‎09-19-2019

Alan: I completely believe that you were disappointed by what happened, and that you feel like Upwork let you down.

For future reference for yourself or for others who read this thread, my advice would be:

Do not plan on Upwork Customer Support bailing you out. That is not their job. Customer Support personnel must follow Upwork policies, and although they can sometimes help clients, they can not necessarily make everything all better. A wise and informed client understands how the Upwork user interface works and uses the power that is his. A wise and informed client never needs to rely on Customer Support in order to interact with freelancers.

Upwork does its best to have only honest, professional freelancers be part of its platform, but it has millions of freelancers, and there ARE some bad apples.

What would I do if a freelancer refused to release milestone work?

I would NOT release any payment to the freelancer. I would explain the escrow system to the freelancer and tell him that he needs to release the work. If he still refuses, then I would close the contract while requesting a full refund of the escrow money. This will almost certainly result in me receiving the money back. Because the freelancer has provided no work whatsoever.

BUT: In the worst case scenario, I would only lose out on the payment for ONE SMALL milestone... I would not have paid out additional money to a freelancer who was providing me with nothing.

As a client, I always start out with small milestones, to make sure that a freelancer can be trusted and that the freelancer is a good fit for my project. So this isn't a big deal if I need to let go of the first milestone in order to end things.

kat303 · ‎09-19-2019

Alan W wrote:
Thanks for the response.

As mentioned, the freelancer absolutely refused to provide any output from the milestone until it was paid for, so not possible to follow the normal steps.

As for the entire system being client-centric, this example clearly proves differently - the support from Upwork has been almost laughable.

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Upwork can not force a client nor a freelancer to do anything. Upwork is just a site that brings clients and freelancers together for the purpose of getting work done. Clients and freelancers manage their own businesses.

But Upwork does provide some safe services. For fixed price contracts they provide escrow services. That is where a client deposits money and it is held there until the client authorises the release of it to the freelancer. It shows the freelancer that the client does have the funds and does intend to pay. And it allows the funds to be held so the freelancer doesn't receive them and then disappears without doing any work. So it works for both sides, client and freelancer. If there are problems Upwork provides dispute services with arbitration with a neutral 3rd party.

If the freelancer demanded payment of ALL milestones, then all you had to do was to end the contract and look for another freelancer. When you end the contract, money in escrow will be returned to you unless the freelancer disputes that request. And that's were Upwork's dispute services come into play. If you didn't get any work, then naturally the funds will be returned to you, no question about that.

You are not obligated to pay for something you didn't receive. You are not obligated to continue working with this freelancer. You can end a contract at any time, for any reason or no reason at all.

In order for work to be done successfully, both sides need to follow the procedures on how to use this site properly. Remember, you are working with a stranger located maybe in another country that you just met online. Common sense plays a part in this too. If the freelancer is not releasing any work (and Upwork can't force him to) what makes you think if you pay this freelancer for the Entire job, that he will release work. What will prevent him from taking that money and walking away? That's why you need to receive work first, check it out and then release the funds in escrow.

gilbert-phyllis · ‎09-19-2019

Alan W wrote:
Thanks for the response.

As mentioned, the freelancer absolutely refused to provide any output from the milestone until it was paid for, so not possible to follow the normal steps.

As for the entire system being client-centric, this example clearly proves differently - the support from Upwork has been almost laughable.

Money in escrow remains under the client's control if the client follows the rules. As Rene pointed out, all you had to do was click 'request changes' and tell the FL to deliver the goods for the first milestone. And keep doing that until either the FL delivered or you got fed up and closed the contract, in which case the money in escrow would have been refunded to you. The FL would've been left--deservedly--with a no-earnings contract. Instead, you let the FL bully you into paying. That's too bad but it's not UW's responsibility.

alex_whittle · ‎09-19-2019

Hi, thanks all for the responses.

In this case the freelancer was developing mobile app software and delivered a version of the mobile app which is why I paid the milestone. However, he would not provide the source code.

I spoke to Upwork to understand how this worked with their regards to their terms and conditions. They told me that as I had paid for the work to be completed I owned the source code, which I related to the freelancer. He point blank refused to provide the source code although I had paid for the milestone and Upwork had confirmed, according to their own terms and conditions I was entitled to the source code.

My issue is that Upwork were completely unable to enforce this policy, which resulted in me having to pay for all milestones as the freelancer would not would release the source code until all milestones were paid for. This by definition is extortion "the practice of obtaining something, especially money, through force or threats".

I understand all the points made, as I am both a freelancer as well as client, and agree I hired very badly but if Upwork cannot enforce it's own terms and conditions the system is completely open to abuse.

prestonhunter · ‎09-19-2019

Thank you for returning to tell us more about what happened.

I know that nobody here wants clients to be treated poorly. Obviously this freelancer did wrong by you. I hope you come into some kind of positive resolution, one way or another.

If nothing else, your experience and the responses in this thread might help other people if they read it.

kat303 · ‎09-19-2019

Alex - There are different thoughts on obtaining the source code. Some freelancers feel that it is a different job and should be separately paid for. Other freelancers feel that it is a part of the job and include that with the actual job without additional payment. And other freelancers will charge for that, but include it in the total price of the job.

ALL 3 ways are correct and within a freelancers right. It just needs to be clarified BEFORE offering a freelancer the job.

ANY client, if their project includes the creation of a source code should make sure whether the source code will be included as part of the entire job and if any additional payment needs to be made to obtain that source code and whatever information a client gets concerning that, it should be noted - in detail - on their contract with the freelancer. And that the freelancer knows that and understands that.

florydev · ‎09-20-2019

Kathy T wrote:
Alex - There are different thoughts on obtaining the source code. Some freelancers feel that it is a different job and should be separately paid for. Other freelancers feel that it is a part of the job and include that with the actual job without additional payment. And other freelancers will charge for that, but include it in the total price of the job.

ALL 3 ways are correct and within a freelancers right. It just needs to be clarified BEFORE offering a freelancer the job.

ANY client, if their project includes the creation of a source code should make sure whether the source code will be included as part of the entire job and if any additional payment needs to be made to obtain that source code and whatever information a client gets concerning that, it should be noted - in detail - on their contract with the freelancer. And that the freelancer knows that and understands that.

Kathy, I would say though by reading this:

https://www.upwork.com/legal#optional-service-contract-terms

Under 6.4 OWNERSHIP OF WORK PRODUCT AND INTELLECTUAL PROPERTY

Upon Freelancer’s receipt of full payment from Client, the Work Product (except for any Background Technology), including without limitation all Intellectual Property Rights in the Work Product (except for any Background Technology), will be the sole and exclusive property of Client, and Client will be deemed to be the author thereof.

It seems to me that unless there was some other kind of contractual arrangement the default terms mean that a FL who does not deliver source code is in violation of the TOS. I say this because source code is considered a copyrighted work in many if not most countries and certainly in the US, then they should have to, by Upwork's terms, deliver it. So if the IP is exclusive property of the client then it has to be delivered.

a_lipsey · ‎09-19-2019

Alan W wrote:
Thanks for the response.

As mentioned, the freelancer absolutely refused to provide any output from the milestone until it was paid for, so not possible to follow the normal steps.

As for the entire system being client-centric, this example clearly proves differently - the support from Upwork has been almost laughable.

So the freelancer won't release the code. So you request the escrowed funds to be refunded and hire a new freelancer who will complete the work. The issue here is you still don't see how you were in control because you aren't listening to how UpWork works. If this freelancer wanted to get paid, he needed to deliver the work first. Since he declined to deliver the work, you walk away (request a refund and note the failure to deliver). Yes, you lose some time on the project by having to hire someone new, but at no point were you required to release those funds to this freelancer.

Sure, he had some code, but it's useless to him. You did have the power here, once you see that, you can correct the mistake going forward.

Me as freelancer: Hi, please release the milestone and I will send you code.

You as client: When I receive the code and review it/approve it, then I will release the milestone.

Me: If you don't release the milestone, I won't give you the code.

You: Okay, you can keep the code. I will request a refund for the amount in escrow and find someone who will play by the rules. Thank you for your interest.

Me: Oh wait! Okay, I will send you the code. Please then pay me.

See?

kat303 · ‎09-19-2019

Amanda =

unless the client signed an agreement or included in the contract before work started stating that the source code would belong to them, the freelancer owns the source code and can do with it as they seem fit. They can separately charge more for it, they can include the charge for it in their over all price, or they can include it as part of the job and not charge anything at all for it, Not separately and not built in to their over all price.

Because of that, hopefully some sort of agreement or a compromise can be made between the client and freelancer. Otherwise, the client would then need to make a decision on whether they want to pay extra for the code. IMO, and I'm not a lawyer, it could be a fine line if a dispute arises and goes into arbitration with possibly the client losing because of the above bulleted paragraph.

a_lipsey · ‎09-19-2019

Kathy T wrote:
Amanda =
unless the client signed an agreement or included in the contract before work started stating that the source code would belong to them, the freelancer owns the source code and can do with it as they seem fit. They can separately charge more for it, they can include the charge for it in their over all price, or they can include it as part of the job and not charge anything at all for it, Not separately and not built in to their over all price.
Because of that, hopefully some sort of agreement or a compromise can be made between the client and freelancer. Otherwise, the client would then need to make a decision on whether they want to pay extra for the code. IMO, and I'm not a lawyer, it could be a fine line if a dispute arises and goes into arbitration with possibly the client losing because of the above bulleted paragraph.

Thank you for the clarification, Kathy. I was treating the source code more like any deliverable. But you are right, it would have to have been listed as a deliverable in the contract.

florydev · ‎09-20-2019

Amanda L wrote:
Kathy T wrote:
Amanda =
unless the client signed an agreement or included in the contract before work started stating that the source code would belong to them, the freelancer owns the source code and can do with it as they seem fit. They can separately charge more for it, they can include the charge for it in their over all price, or they can include it as part of the job and not charge anything at all for it, Not separately and not built in to their over all price.
Because of that, hopefully some sort of agreement or a compromise can be made between the client and freelancer. Otherwise, the client would then need to make a decision on whether they want to pay extra for the code. IMO, and I'm not a lawyer, it could be a fine line if a dispute arises and goes into arbitration with possibly the client losing because of the above bulleted paragraph.
Thank you for the clarification, Kathy. I was treating the source code more like any deliverable. But you are right, it would have to have been listed as a deliverable in the contract.

From an Upwork standpoint I believe you are right Amanda. I have not personally done a fixed contract but I believe that I submit that the client has to pay in 14 days or ask for changes right? The money is already escrowed (essentially paid).

I am also not a lawyer, but in my opinion from Upwork's TOS as I replied to Kathy's previous post the source code is the client's Intellectual Property if they paid. I think that the FL is obligated to provide the source code or be in violation of Upwork's TOS.

tlsanders · ‎09-20-2019

Mark F wrote:

I am also not a lawyer, but in my opinion from Upwork's TOS as I replied to Kathy's previous post the source code is the client's Intellectual Property if they paid. I think that the FL is obligated to provide the source code or be in violation of Upwork's TOS.

FWIW, I agree with your interpretation.

florydev · ‎09-21-2019

Tiffany S wrote:
Mark F wrote:

I am also not a lawyer, but in my opinion from Upwork's TOS as I replied to Kathy's previous post the source code is the client's Intellectual Property if they paid. I think that the FL is obligated to provide the source code or be in violation of Upwork's TOS.

FWIW, I agree with your interpretation.

Good and because I know YOWAL that makes me feel "righter"

tlsanders · ‎09-20-2019

Alan W wrote:
Thanks for the response.

As mentioned, the freelancer absolutely refused to provide any output from the milestone until it was paid for, so not possible to follow the normal steps.

Your recourse, then, is to end the contract and request a refund of the money in escrow. It's true that you can't get the work, but you also wouldn't have paid anything. There is obviously nothing Upwork can do to wrestle the work product (assuming any was done) out of the freelancer's hands and pass it to you, but the system protects you from paying unless/until you get the work.