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Fixed Rate Contract Payment Reversed

aburla
Active Member
Axel B Member Since: Oct 14, 2020
1 of 3

I have recently completed a logo design for a fixed rate contract. The client said they were very happy, the payment was made for the milestone. The client asked to go ahead with Round 2 (color). Once this was delivered the client stopped responding.

 

The same evening Upwork reached out and deducted the payment from my funds because the client apparently asked their bank to reverse the charge.

 

There is clearly a loophole in Upwork's system. Has this happened to anyone else? This seems like a good method for clients to have free work done.

 

Do you have your own contracts signed by client before using Upwork's system?

andregutierrez22
Moderator
Andrea G Moderator Member Since: Jul 7, 2020
2 of 3

Hi Axel,

 

I'm sorry to hear about your experience with this client. I can see you were able to communicate with our team and your issue has been escalated further. Please allow some time for our team to review and they will update you directly as soon as possible.

 

About having your own contract terms with your clients, please refer to the Optional Service Contract Terms for more information:  

"Users who enter into a Service Contract on the Site with another User are free to agree to these Optional Service Terms in whole or in part, or to agree to different or additional terms for their Service Contract(s)."

 

~Andrea
Upwork
prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
3 of 3

Is this a "loophole in Upwork's system"?

 

Yes and no.

 

You DID get jammed up here by this client's bad behavior.

No argument there.

 

But I would say this is more of a "loophole in the credit card system."

 

What you experienced was because credit cards allow chargebacks, and this dishonest client took advantage of that fact. This could have happened to you anwhere that takes credit cards for payments - NOT just on Upwork.

 

Moreover, Upwork DOES TRY to prevent this kind of thing from happening. Upwork has a specific rule in place that if a client does a chargeback, the cilent will LOSE THEIR ACCOUNT! Upwork won't let them use the platform any more, and won't help them with anything else. They're cut off and on their own.

 

This is a pretty bold policy meant to PROTECT FREELANCERS.

 

I don't blame you if you wish that Upwork could do more. I think it DOES try to fight chargebacks. I don't know if it goes to every possible extreme measure that it could go to in order to fight chargebacks. It probably doesn't. But it's not like Upwork is doing nothing.

 

Due to the possibility that a client can do a credit card chargeback... you are right: There IS a loophole. And it means that Upwork is NOT a perfect, 100% safe system. Fortunately, this kind of thing is rare.

 

Is there a sure-fire way to protect against credit card chargebacks?

Well... Not if you are using Upwork.

If you are using Upwork, then payment goes through Upwork. And you don't get to dictate what payment method a client uses. Most all client payments are done through credit cards (which allow chargebacks) or through PayPal (which allows the equivalent of chargebacks).

 

Upwork itself doesn't allow chargebacks. But if a client BREAKS that rule, there is often nothing taht Upwork can do.

 

What remains to be done?

Most of the time, this doesn't happen. So that's good. Aside from that, all you can really do is provide top-quality work and service to clients. The work that you are doing for them is so good that they never even think of doing a chargeback. And they also value your work so much that they don't want to do anything to risk having access to your services.

 

Will that ALWAYS work?

In the original poster's situation, he wasn't working on a long term development project in which the client depended on him and wanted to use the freelancer's service for a long time. The freelancer probably did work that was indeed high-quality, and which the client did indeed value and want to use. But the client probably planned even before he hired anybody that he was going to do a credit card chargeback in order to get work fo free. That is NOT NORMAL. But this represents a situation in which the strategy of "doing top quality work" could not have defended against a credit card chargeback.

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