Thanks everyone for your feedback. A couple points of clarification:
Once we learned that the freelancer attempted to hack into our braintree account to access our customers information after we left him a negative review and discovered that he had disabled our app after we paid him in full, we immediately reached out to upwork. This was within one hour of the contract ending. It was a Saturday evening. We were told by upwork that because we approved the milestone, there was nothing we could do. We also checked to see if our negative review warning other customers of this scam was still up and we saw that it had been removed. Because of this, we realized that the only way to protect ourselves from further loss was to notify our financial institution of the fraud and were able to stop the transaction. We continued to contact upwork to notify them that we had cancelled the payment for our protection and after SEVERAL days of benig told there was nothing they could do, we finally were able to get a response from the dispute team. We produced evidence that the freelancer had attempted several times to access our customer's financial information and had disabled our app after payment was made in full. Unfortunately, Go Daddy would not provide us with information about who had taken down our website without a subpoena.
I want to be clear that this is NOT a dispute about the freelancer's quality of work. We had issues with that as well but understand that due to upwork's policies, we are unable to dispute quality of work once funds have been released. We are informing and providing evidence to support the fact that the freelancer extorted, scammed, and hacked our accounts AFTER the contract ended and disabled our app. This means that we paid the freelancer $3200 ($4000 minus the $800 we were able to stop payment on) and have no app. The freelancer has $4000 because upwork paid him the remaining $800 even after we notified them that we had stopped payment and produced evidence of fraud.
It has been 3 weeks since the fraud occurred. We have been going back and forth with upwork daily. And they are still saying that unless we are willing to pay the last $800, we cannot go to arbitration. We have asked if we can put the $800 in escrow pending the outcome of the arbitration. They have repeatedly said no. We have asked what happens if we pay the $800 and the $291 for arbitration and upwork said that we will only get the $291 back. They cannot force him to give us a refund and will not refund us themselves. We have asked for this to be escalated as it would make no sense for us to pay $800 to someone who has scammed us and has no motivation to go to arbitration since he has received $4000 and did not have to deliver us a product. Upwork has refused to escalate or allow us to put the $800 in escrow.
The purpose of this forum was to warn others about the risks of using freelancers outside of the US to build electronic products. The freelancer is able to retain control over our product and disable it after we paid him in full and upwork's policies are protecting him. If he was located in the US, we might have been able to circumvent upwork and file a law suit against him directly. Because we don't have information about him and he is outside of the US, that is not an option. We must either pay the $800, which we have no recourse for recooping, or allow the freelancer to get away with no consequences.
We are truly concerned about other individuals who may unknowingly enter into a contract with him or have a similar thing happen to them and are hoping that upwork will help us protect their customers. That is the reason for this post.
