Fraudulent Transaction - hacked account hired me to do work

[researchqueen]

I just got an email from someone claiming that his son hacked into his account and hired me via a fixed price transaction.  He told me he has asked for a refund and reported the unauthorized transaction with his credit card company.

I finished the job and was awaiting payment for several days when I just got this email.

I filed a dispute, naturally, as it's not my responsibility that his son fraudulently hijacked his account.  

My questions:

1. What should I expect from Upwork?

2. Should I let the account owner know that I will pursue criminal actions?

3. Should I pursue criminal actions?

This is not a dispute of he-said/she-said, but someone that hired me fraudulently.  

Just to add another layer of complexity on this: the account holder is in the name of the son, Michael.  This latest message came to me from Michael's account, but signed Frank.  So I suspect it was really Michael that hired me, but used Frank's credit card number.  And I suppose Frank is using Michael's account under a false identity.

Thanks in advance,

Jean Norton

[holymell]

Since it was fixed price and the guy is filling a chargeback with his CC company ... you can probably kiss that money goodbye. If it was hourly and you used the tracker and wrote memos, you would qualify for Payment protection.

Sorry. I don't think you have much recourse here.

You can try the legal route but I don't know how that would turn out.

[researchqueen]

So the Fixed Price Protection doesn't cover fraud?

[holymell]

I haven't read a single case where a chargeback was reversed on a fixed price contract.

If you want to ensure protection, do hourly jobs, no manual hours, use the time tracker and write meaningful memos. That's the only way you're truly protected against a chargeback. Upwork can't do anything if the money is gone. It's misleading to say that fixed price jobs are protected. The escrow service is really the only protection you've got on a fixed price job.

Edit- but that doesn't mean that you shouldn't talk to customer service or pursue legal action against this person. If the story is true, I'd feel bad for both you and the guy it happened to. Legally you would probably have to prove that it was fraud, but I'm not a lawyer. Plus, before you do hire a lawyer, you might want to read all of Upwork's terms of service to make sure you are able to take legal action against the client. You certainly can't take legal action against Upwork for this.

[felixmena]

Hi Jean,

This is a very unfortunate situation and I am sorry to hear you're going through it.

Indeed, there's an open ticket about this matter. One of our team members is reviewing this case and will provide more details in a promptly manner.

[researchqueen]

Thank you for your responses.  As it turns out the father has had time to think about the gravity of his son's actions and the dispute is now (hopefully) resolved.

However, I would like some clarification on Upwork's stand on an issue like this.  

Someone hires another using a stolen credit card. The work is completed and submitted. Sometime later Upwork is notified that it was an unauthorized transacation. How is the freelancer guaranteed protection for their work?  Does the 20% fee include this protection?  

Given this happened to me so early in my Upwork career, I personally would like some level of comfort by knowing Upwork's policy on this.  It's not clear as written in the terms and conditions.

[gilbert-phyllis]

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@Jean N wrote:

Thank you for your responses.  As it turns out the father has had time to think about the gravity of his son's actions and the dispute is now (hopefully) resolved.

However, I would like some clarification on Upwork's stand on an issue like this.  

Someone hires another using a stolen credit card. The work is completed and submitted. Sometime later Upwork is notified that it was an unauthorized transacation. How is the freelancer guaranteed protection for their work?  Does the 20% fee include this protection?  

Given this happened to me so early in my Upwork career, I personally would like some level of comfort by knowing Upwork's policy on this.  It's not clear as written in the terms and conditions.

---

 As I understand it, the FL is not protected at all in that scenario. Nor in any dispute of hourly payments unless the UW time tracker was used, and used precisely as suggested. Disturbing as that may seem, I recommend thinking about it in the context of what kind of payment protection is available to freelancers anywhere. It isn't much. Several years ago, somebody solicited freelancers to contribute their unpaid invoices online and created The World's Longest Invoice. It totaled nearly $16 million, all in increments too small to be worth suing for. (There was an article in Forbes about it, I think.)

I admit that I was initially attracted to UW by the claims of payment protection. I've come to realize it doesn't amount to much at all if your work isn't conducive to using the time tracker. On the other hand, I'm also vulnerable to chargebacks if I'm working directly with a client (not through UW) and accept credit card payment through dwolla or due or another payment processor. I counter that threat by doing the same thing I do with UW clients: vet them as carefully as I can, limit my exposure in the initial stages of the project/relationship, and practice good client management hygiene: pay attention, communicate clearly and fully, and never make assumptions. There are no guarantees, inside or outside UW.

What I get in exchange for the UW fee is free marketing. I would need to spend far more than UW takes off the top, to have had a decent chance of connecting with some of the clients I've found here. When I take "payment protection" out of the equation, it's still worthwhile for me.