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How I lost $17,350 to Upwork and a freelancer - Upwork's dirty trick (unlawful in the UK) exposed.

Active Member
S S Member Since: Sep 26, 2019
11 of 46
Dear Joan,

My understanding was that upwork charges the money, keep it until I get to review the hours tracked and work delivered and like always I need to login to authorise the payment to be released. Even the invoices given by upwork didn't state that these payments were for the concerned freelander and I had no information what so ever from upwork that the payments were being released.

Upwork did confirm that the money was kept in escrow and given the fact that I did not review and dispute the tracking information that was never available to me withinn 5 days, upwork released the payment to the freelancer.
Community Guru
Preston H Member Since: Nov 24, 2014
12 of 46

I completely understand Joan's curiosity about this.


But someone like Joan has a great deal of experience using Upwork.


I am not sure if someone like her or myself are truly capable of looking at Upwork with fresh eyes and seeing how confusing things might be for someone who is new to the system.


S S had used fixed-price contracts, but was new to using hourly contracts. That experience with fixed-price contracts actually proved to be a hinderance to understanding what was happening with an hourly contract.


As a forum moderator has pointed out, this situation is already being handled by Upwork customer service and Upwork officials are not going to comment on details here in the public thread.


I hope people won't "pile on" to point out mistakes that were made.


S S:

Are there any additional questions that you have about how Upwork works? Or questions about how you can accomplish your goals in the future? Or even any questions you asked already in this thread that you feel haven't been answered?

Active Member
S S Member Since: Sep 26, 2019
13 of 46

Dear Preston,


Thank you. It is in fact not true that Upwork is assisting me with this. Upwork requires me to spend money on a lawyer and send them a subpoena. 

Community Guru
Jennifer R Member Since: Sep 15, 2017
14 of 46

However, the freelancer informed Upwork that until and unless I pay the $2800 cancelled by Upwork for manual hours, he will not provide the code and Upwork offered me $480 compensation for my loss of $17,350 - which is somehting I rejected.


The OP owns the work done by the freelancer minus the manual time. The freelancer has no right to hold the work done and paid so far hostage. If the freelancer clearly stated that he did the work but refuses to hand it over unless manual hours are paid as well, it is an issue UW has to react to.

There are faults on the OPs side, like not checking the time sheets, misunderstanding hourly contracts, etc.

Active Member
S S Member Since: Sep 26, 2019
15 of 46

When Upwork mediator contacted the the freelancer, the freelancer wrote to Upwork stating until and unless he is paid for the manual hours he will not release the code he has received the payment for. Upwork's medator wanted me to consider paying and when I refused i was offered a compensation of $480 as a goodwill. 


This is why I am of the view Upwork is profiting from scams and will not change. 

Community Guru
Preston H Member Since: Nov 24, 2014
16 of 46

re: “It is in fact not true that Upwork is assisting me with this. Upwork requires me to spend money on a lawyer and send them a subpoena.”


S S: You are right. I should not have said that Upwork is “assisting” you, because clearly Upwork is not “assisting you by doing exactly what you want them to do.”


I should have said that there is an existing customer support ticket for this matter.


I do NOT recommend that you spend money on a lawyer. A lawyer does not have the source code for your project and can not produce such. Upwork - even if presented with a subpoena - does not have your source code and can not produce such.


A very inexpensive thing for you to do is to ask questions here in the Forum to help you understand your situation better. And to help you understand how you can be more successful in the future.


But if your purpose here is simply to share your story, I don’t think anyone should pressure you to ask additional questions. Even though I will ask a couple questions below, I am only doing so in order to help you. You should not feel like you need to answer those questions. (I am simply another Upwork user. I don’t represent Upwork or anyone but myself.)


Some of the mistakes made in this situation have already been pointed out.


I am certain that when you work on projects of this size and scope in the future, that you will:


- work with an independent project manager

- use an adequate code management system

- check work diaries


One question I am not certain you have answered is this:

Did the freelancer you hired ACTUALLY create the source code for the project? And that source code COULD be used by project? Or was everything fake?


I ask this because you said that you saw the work demonstrated and indicated that you thought the freelancer was doing real work. If the freelancer did real work, then it would be desirable for you to obtain that work, something you prevented from happening by taking action to cause Upwork to refund the manual time. But if the freelancer did NOT do real work, then there would be no particular benefit on your part to trying to obtain source code files from him.


Are you even interested in obtaining the source code files created by the freelancer? Or do you simply want to share your experience and move on?

Community Guru
Nichola L Member Since: Mar 13, 2015
17 of 46



I think you have made some very bad judgement calls, but in your shoes I would be as mad as fire too. How much would it cost you to subpoena Upwork? If it is only part of what has been stolen from you, I would take CS's advice and go for it. 


That is a lot of dosh. 

Community Guru
Amanda L Member Since: Jan 23, 2018
18 of 46

Okay, if I summarize correctly, there are basically two issues:


1. You didn't read the TOS thoroughly enough to understand how hourly contracts work. I say this because I've worked with brand-spanking new to UpWork clients who understood they were being charged weekly and had to review or dispute weekly. That sucks. I know we all have done that, from time to time, not fully read TOS, and gotten screwed. I'm sorry it happened to you, hopefully you'll either review fully next time or stick to fixed price since it seems to work for you. 


2. FL is holding code hostage. I am not a programmer, but someone in another thread schooled me that often the code has to be written as a deliverable. Was it a deliverable in your project? That could make a difference in how UW is responding. Regardless, it does seem like all the reputable programmers here provide the code without this drama. And of course, as a writer, I provide all my Word or text files for clients so they can use/edit/change at any future date at their desire. 


I'm sorry this happened to you. It's a lesson for everyone to read the TOS very thoroughly. 


If the code is essential (did they really even do the code?) then maybe paying for a subpoena is worth it? You made mistakes, sure, but even so, if UW was doing their job and making sure only the best FLs were here and not scammers, you wouldn't be in this situation, bc you'd have paid $17k plus with something of excellence to show for it. 


In another thread someone mentioned, jokingly, banning all FLs who complain about buying connects. I don't know, but I thought UpWork's game was to have the elite talent crowd here...maybe that's a way to protect clients from scammers like this. I don't really know, but there are clearly problems, and it does seem to me that if UW did more to verify that the FLs accepted here were really the **bleep**, clients would be willing to spend more money. That said, as a FL, I"d like to know the clients are worth something too...


And with that said, I will log off and wait for the scathing replies, while I start my third glass of wine...

Community Guru
Preston H Member Since: Nov 24, 2014
19 of 46

re: "If the code is essential (did they really even do the code?) then maybe paying for a subpoena is worth it?"


Producing a subpoena to present to Upwork does not result in the original poster obtaining any source code.


Upwork does not have any of the source code.


In the future, this will not be an issue for the original poster, because he will not hire and pay freelancers without obtaining and archiving the source code on a regular basis.


As for the current situation:

According to what the client said, the client lost the opportunity to receive the source code when he caused Upwork to refund all manual time logged on the project. The freelancer - thus deprived of a large amount of money he had earned for working on the project - decided to play hardball.


A possible explanation of precisely what happened is this: The freelancer invoked (whether implicitly or explicitly) Upwork's own ToS clause that stipulates that the work freelancers do on a project does not belong to the client unless the client pays fully for that work.


Screen Shot 2019-10-01 at 10.25.54 PM.png


None of this is to say that the freelancer's actions were "right" or "wrong." We are simply trying to understand the freelancer's rationale. (If the freelancer is not simply an outright scammer, that is.) At the same time, we are trying to understand the reasons for Upwork's actions.


Given the fact that Upwork does not have possession of any source code, it would seem that the original poster (the client) is faced with two possible choices:


a) return the money ($2800) to the freelancer (money that the freelancer feels was stolen from him by the client), and thus receive the source code


b) move forward without obtaining the source code


Remember: We have not heard the freelancer's side at all. So we can not know for certain what the freelancer is thinking.


It is possible that the freelancer is wondering: "I worked hard to create this source code for the client. The client spent nearly $20,000 on this. Now the client wants to lose $17,350 worth of work for the sake of just $2800? Why doesn't the client simply pay me what he owes me and thus receive all $20,000 worth of source code?"


But there is another aspect of this situation which is not completely clear: What precisely IS the nature of the source code? The client said he saw the source code demonstrated on the freelancer's laptop computer. But the client has never seen the actual source code or had a knowledgeable third-party programmer examine it. We don't know how the source code should be categorized. Is it:


a) excellent, high-quality source code, probably worth more than the client has actually paid thus far

b) pure vaporware... the freelancer just showed fake screens and mock-ups and never produced any usable source code

c) somewhere between these extremes


If we know for certain that the source code is not usable at all, then it would make no sense to put any effort or expense into obtaining it.


But what if the source code IS functional and useable? If that's the case, what is the smart move? To start over? Or to try to obtain the source code?

Community Guru
Kathy T Member Since: Jul 17, 2015
20 of 46

I am sorry to hear about this. $17k is a lot of money to pay and have absolutely nothing to show for it. 


Just some advice.for the future. - On fixed rate jobs, money is held in escrow until the deliverable of the job or milestone is sent to you. Once you get that, you have 14 days in which to look it over and approve the result. At that point you release the funds in escrow. 

For fixed rate contracts you pay for the WORK that the freelancer does. If they don't deliver work, you just don't pay. If the work is full of errors, you request that those errors be fixed. Also, if the freelancer delivers work through the Submit Work/Request payment button and the work is not complete or full of errors, you dispute that request 


On hourly jobs, you pay for the hours the freelancer works, not for the work produced. That does not mean you shouldn't get work while the freelancer is doing. You can request that they send what they are doing every XX days. If they don't, if you see it's full of bugs etc, you can close the contract right then and there, and you don't need a reason to do that.  At the beginning of the week, you have 4 or 5 (can't remember) to look over the work before your credit card is charged. 

For hourly contract a client only pays for hours that are tracked using the Tracker. that show reasonable activity and where notes are entered into the screenshots the Tracker takes. Clients do not have to pay for manual hours, hours that show the freelancer doing something else besides working on a clients job. and unusual low or high keystroke activity. 


The BEST chance of getting at least some work, was when the freelancer show up in person at your offices. Face to face you couldn't have asked for a better opportunity. 


I hope, some way that you can get at least some of your money back. But I have no advice as to how. The only thing I can say, is to do what Upwork told you to making sure you understand 110% what Upwork told you and what actions will be taken if you do that (subpoena ) and what outcome might happen. I would hate for you to spend more money getting a lawyer/subpoena  and find out you misunderstood what Upwork said to you, or that the outcome is like 0 to none that anything can come out of that if you  do go that route. 


As for the source code, - it depends on the freelancer and every freelancer should stipulate in their contract that the source code is included in the price of the job. Some freelancer, charge extra for it, some will charge but include it in their proposal amount, and some freelancers will include it (no charge) as part of the work.