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1751e9a0
Member

Is Upwork a financial disaster for Clients?

My experience with Upwork is not good. Reading the guidelines when a dispute is raised protects the freelancer but not the Client which makes (unfortunately) Upwork an excellent platform for scammers.

 

Here is an excellent sample of a scam:
- Client puts $1000 in Escrow to show goodwill to Freelancer...
- After 10 days Freelancer claims dispute despite the fact Freelancer has not done any work...
- Upwork Dispute Specialist does not provide solution but throws it back to Client and Freelancer to sort it out...
- Freelancer continues to make allegations/insults but views of Client are ignored by Dispute Specialist...
- Client proofs non-compliance with work but ignored by Dispute Specialist

- Upwork Dispute Specialist does NOT check the (quality or quantity) of the work


So the next step is going for third party arbitration:
- Upwork Dispute Specialist offers to split the money in Escrow despite Client views that Freelancer has not done anything for that money ($500)....
- Alternatively, you can go to arbitration costing everyone an extra $291 (including Upwork) with the outcome probably to split the money in Escrow. All in all it will cost the Client $500 + $291 and loss of time on (an important) project.

- The Freelancer (the scammer) will be the great winner here - $291 - $500 = $209 with a HUGE chance of getting more money awarded for doing absolutely NOTHING.

16 REPLIES 16
sajal36
Member

I believe it is very clear process that client approves the work delivered by the freelancer. If you are not satisfied with the delivery, than do not approve the payment until work is completed to agreed scope and satisfaction.

 

Hello sir my name is karthik .You said write, but client can understand stolen the idea behind the work  . then how we earn the money so .the client he or she pay the little bit money how they done based on the work,And client give review of the work so it will improve them .So that they never do mistake again on that time.

thank you sir

 

Of course, there are Clients that are misusing the system but often don't have money in Escrow. I am talking about honest Clients that have put money in good faith in Escrow...

If we are not satisfied freelancer can still raise a dispute.... As soon as the freelancer raises a dispute it is out of the Client's hand. Client can't control the money in escrow.

Any dispute resolution follow the process of mediation. Both party have to agree to some point and come to a solution as this will be in the interest of the projects. I believe third party arbitration is a scenario when you planned to replace the freelancer that the last resort.  In my opinion, this must be avoided and in case this goes forward than it will go through defined process steps. This is true for any any legal dispute process.

 

I suggest if the clarity is not there in the beginning than it is always better to have the detailed SOW in place so that all deliverable are clearly defined. No one can deviate from SOW stated deliverable commitment and milestone defined. This is true even for supplier / client relationship too in case work is outsourced. 

Hello Sajal,

Fully agree with you BUT what happens if the Freelancer is a scammer and the money the Client put in Escrow was done in good faith. Freelancer doesn't have to cooperate with dispute specialist (as in my recent case) and dispute specialist doesn't want to offend the Freelancer. So if a Freelancer doesn't do the work, raises a dispute (founded or not founded) the money in Escrow will be frozen until a third party decide what happens with the money (and often this will be split) and costing the Client a lot more money than the Freelancer. Therefore Freelancer has not a lot to loose - hence the scam.

If this is something that happens to you more than once, then perhaps you are not vetting your freelancers very well. A well established freelancer should care more about growing their network than running off with $209, and you should be able to discern within reason who is or is not a well established freelancer.

Hello Jarrad,

Fully agree but on paper (and checking referrals) everything looked good. A scammer doesn't care about growing their network. If you do 10x $209 it does become a lot of money for some people - just saying.

The freelancer cannot raise a dispute on fixed-price projects unless the Client requests a refund.

prestonhunter
Member

re: "Is Upwork a financial disaster for Clients?"

 

Generally speaking?
No.

 

Upwork is NOT a financial disaster for clients.

As a client, I have hired over 180 freelancers on Upwork.

I use Upwork PRIMARILY to save money.

 

Having said that, I am aware that there ARE incidents in which clients have had disappointing experiences while hiring on Upwork. This is due to clients using Upwork incorrectly. This does not mean that the clients are intentionally doing something wrong. It is a matter of client education. People ae not naturally born knowing how to hire freelancers. Sometimes clients make unfortunate assumptions about the types of services that Upwork provides, and this leads to clients making mistakes in how they hire and manage freelancers.

 

The good news is that these problems are not "intrinsic" or "permanent." Any client can learn how to use Upwork effectively and then achieve success as a client, without "financial disasters."

 

This new should be welcome news for any client: Upwork does not need to change anything in order for you to be able to safely use it to your advantage.

The example I put forward is when money is put in Escrow. I assume that you do not do this.

I also fully agree that the use of Freelancers will save money. Have used Fiverr many many times without any issues - unfortunately I discovered this loophole too late when the Freelancer raised a dispute and as a Client was left in the cold. Will not use Upwork for work with money put in Escrow anymore...

re: "The example I put forward is when money is put in Escrow. I assume that you do not do this."

 

I rarely use fixed-price contracts.

When I hire freelancers, it is almost always with an hourly contract.

 

The fixed-price contract model, which entails the use of escrow, is significantly more complex than the hourly contract model.

 

Clients can certainly go wrong with fixed-price contracts.

Clients HAVE misunderstood the way that escrow and fixed-price contracts work and have had unfortunate experiences.

 

I think the best thing for ANY Upwork client to do if they are using fixed-price contracts is to tell themselves:

"I am creating a milestone. I am funding this milestone, which means I am paying money NOW, before any work has been done. I will NEVER get this money back, no matter what. Whether the freelancer does the work brilliantly, or does a terrible job, or does nothing at all, I will never get this money back."

If the client can accept this reality, then go ahead and use a fixed-price contract to create and fund a milestone. If this is not acceptable, then use an hourly contract.

df602768
Member

This is why you'd need to fund only milestones. 

If the Freelancer hasn't done any work as you stated, you will win the dispute because the Freelancer will have nothing to show. Thanks!

25005175
Member

- Client puts $1000 in Escrow to show goodwill to Freelancer...


That's how fixed-price projects work. You can call it "goodwill", but it is a safety precaution for the freelancer and Upwork - proof that the client CAN pay up.

 

- After 10 days Freelancer claims dispute despite the fact Freelancer has not done any work...


Freelancers can't file a dispute until you, as the client, request a refund.

 

- Upwork Dispute Specialist does not provide solution but throws it back to Client and Freelancer to sort it out...

That's how mediation works. The first task is to provide the two parties the opportunity to work it out.

 

- Freelancer continues to make allegations/insults but views of Client are ignored by Dispute Specialist...

I have recent experience as a Freelancer. This absolutely can go both ways. The mediator can also get lambasted by either client or freelancer, just for doing their job. I had an outrageous client slander me and insult the Upwork mediator. That's just the nature of disputes with unscrupulous individuals.

 

- Client proofs non-compliance with work but ignored by Dispute Specialist

- Upwork Dispute Specialist does NOT check the (quality or quantity) of the work


That is not their job. Mediators do not validate or judge. They simply attempt to assist 2 parties in finding a resolution that both can agree to. Their recommendations are non-binding.

 

- Upwork Dispute Specialist offers to split the money in Escrow despite Client views that Freelancer has not done anything for that money ($500)....

A mediator can make a recommendation for a split. It does not have to be 50:50. I have seen 50:50 and 70:30 in the same dispute, in favor of the client, after I had presented LOADS of evidence showing that I had done the work.

 

- Alternatively, you can go to arbitration costing everyone an extra $291 (including Upwork) with the outcome probably to split the money in Escrow. All in all it will cost the Client $500 + $291 and loss of time on (an important) project.

Yes, arbitration costs money, because a new, uninterested fourth party is involved. There is no "likely default outcome" when it comes to arbitration. Arbiters are legal professionals and their decisions can be rejected in a court of law if they practice "default decision-making" (expect for the legal "default" in which one party wins because the adverse party refused/failed to act).

 


- The Freelancer (the scammer) will be the great winner here - $291 - $500 = $209 with a HUGE chance of getting more money awarded for doing absolutely NOTHING.


Nope. Arbiters do not award funds to freelancers for doing nothing. If your freelancer actually did nothing, which will be apparent in the distinct lack of evidence of submitted work, then the arbiter will award the funds back to the client - scammer gets $0 - $291 = - $291. Also, an arbiter will award most, if not all, of the funds to the freelancer if the freelancer did do the work and showcases it with plenty of evidence during arbitration. If a party requests only part of the disputed funds, an arbiter can choose to award them what they ask or even more (up to the full amount in dispute), depending on evidence of malfeasance by the adverse party, to compensate for the hassle of the entire process. An arbiter also has the right to force one party to compensate the other for arbitration fees, so a client could be awarded the full escrow amount back, plus the fee that they paid - at the freelancer's expense - resulting in zero dollars spent, but time expended.

Hey Peter, both the Freelancer and Client have to show the facts of the Job. If no work was performed, the Freelancer has nothing to show Upwork Dispute and your money would be refunded. However, if work was submitted there will be proof. Thanks!

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