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Chargebacks

ultimateapps
Active Member
Pijus P Member Since: Nov 29, 2016
1 of 34

Hello Freelancers,

 

So today I came across something unbelievable. I was trying to get paid, and suddenly I get an error message saying you cannot withdraw, please contact customer service. I contacted them, and I got explained that I need to send upwork money back for the job I have done and have been paid months ago! Because that client went to his bank and made a 'charge-back' ?!?

 

I completely do not understand this concept, why should it be my problem? I have done the job, the money is mine. I have read upwork terms and it says they can ask you to send money back if they suspect that you have done some criminal activity. I have not done anything wrong or illegal, and I do not understand how they can legaly urge me to send MY money back?

 

I am top rated freelancer, earned myself and UpWork quite alot of money and this chargeback amount is really nothing much, but if I hear back from customer support that I still need to pay back. I am closing all my projects and leaving this platform straight away.

 

Colleagues, please tell me what you think. Do you have any advice? 

kochubei_valeria
Community Manager
Valeria K Community Manager Member Since: Mar 6, 2014
2 of 34

Hi Pijus,

 

We won't be able to share much here in the public Community about the status of your or your client's account. I encourage you to communicate with the team about the issue and take their advice to communicate with the client and try and resolve any misunderstanding. Also, please check article 6.4 of the Terms of Service.

~ Valeria
Upwork
kat303
Community Guru
Kathy T Member Since: Jul 17, 2015
3 of 34

If the client specifically initiated a charge back, that means he contacted his credit card company or bank and claimed most likely that this charge was not authorized (meaning he said someone other then himself used the card without his permission.)

 

Another reasonfor a chargback, would be that the client claimed that the service they recieved was not up to par or they didn't receive the service that was paid for. The client may think it easier to initiate a chargeback on that then go through the dispute resolution process and pay a fee for that.

 

In any case, what happens, is the chargeback amount is taken from Upwork to pay the client back. Upwork is out that money now, so they take that amount, that was paid to you, - they take that back

 

What can you do. Basically nothing, because there's no defense against the unauthorized reason that the client used for the chargeback.

 

Chargeback do happen, but not frequently. If a person claims too many chargbacks, their card/account will be close by the bank or credit card company.

ultimateapps
Active Member
Pijus P Member Since: Nov 29, 2016
4 of 34

That makes sense but something needs to be done about this.

 

1.  It violates the guaranteed payment terms.

2. Why would me or any other freelancer would want to work on upwork if you never know when you will be asked to pay the money you earned back. In my case is not that bad because sum is not that huge, but what if the sum was bigger, like 5k? What do you think I would do? Send this money back to you or close my account? Yes, I would just close my upwork account and you would never see me again.

 

That is definitely a big loophole..

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
5 of 34

@Pijus P wrote:

That makes sense but something needs to be done about this.


 You can petition the banking world to disallow chargebacks. Failing that: "Welcome to running your own business"

 

Clients who file a chargeback ARE in violation of the terms of service. They do get suspended. That does not get you your money back.

ultimateapps
Active Member
Pijus P Member Since: Nov 29, 2016
6 of 34

Petra, that's why I am using Upwork as a middleman. I am using it so I know it's secure, and I am guaranteed to be paid for my work, in exchange I am paying 10-20% of payments I am receiving. I was expecting upwork to have fraud prevention system (Can't they communicate with banks directly so this would not happen? It is not my job to create a scheme to prevent that)

 

Simply sending a message, hey something happened, please send the money you have been rightfully paid for back is least to say not correct. I do not even know that the chargeback really happened?

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
7 of 34

This is a mess. I don't blame Pijus at all for being extremely frustrated by this.

 

Anybody would be frustrated by this.

 

Chargebacks are a problem that is not unique to Upwork. Yes, one can take issue with how Upwork handles chargebacks generally and/or with how this particular situation was handled.


But a lot of what is going on here is not due to Upwork being the "bad guy." A lot of this has nothing to do with decisions that Upwork has made. By law (a stupid law, obviously) credit card users actually have two years (!) after the initial charge during which time they can file a chargeback.

 

Let's be realistic: What kind of Upwork client would need TWO YEARS to check whether or not the work a freelancer provided was actually done as requested.

 

Filing a chargeback is NOT the same as "the customer gets his money back." But disputing the chargeback is a headache. Neither disputing a chargeback nor granting a chargeback uncontested is something a merchant wants to do. Either way, a chargeback means that a credit card customer is causing headaches for a merchant. Chargebacks represent a vital and important means by which to combat credit card fraud perpetuated by credit card thieves or dishonest vendors. But a chargeback is a very unethical thing to do as a way of recovering money on an a valid, already-delivered product or service.

versailles
Community Guru
Rene K Member Since: Jul 10, 2014
8 of 34

@Preston H wrote:

By law (a stupid law, obviously) credit card users actually have two years (!) after the initial charge during which time they can file a chargeback.

 

 


Let's be specific here, the 2-year law is in the USA. In France for instance, it's 13 months and you need to bring enough elements to show that:

 

- The card (or the data on the card) was used by a third party without your consent (stolen cards, duplicated cards, etc.)

 

or:

 

- you agreed to a payment without knowing the exact amount, and;

- the amount charged is abnormally high compared to what you usually spend, and;

- you can prove that you were the victim of a breach of trust or a fraud committed by the beneficiary

 

If those 3 conditions are not present, your bank can refuse your request for a chargeback.

 

So it seems that in some countries like in the US, chargebacks can be abused.

 

-----------
"Where darkness shines like dazzling light"   —William Ashbless
tlsanders
Community Guru
Tiffany S Member Since: Jan 15, 2016
9 of 34

@Preston H wrote:

 


But a lot of what is going on here is not due to Upwork being the "bad guy." A lot of this has nothing to do with decisions that Upwork has made. By law (a stupid law, obviously) credit card users actually have two years (!) after the initial charge during which time they can file a chargeback.

 

Let's be realistic: What kind of Upwork client would need TWO YEARS to check whether or not the work a freelancer provided was actually done as requested.

 

Filing a chargeback is NOT the same as "the customer gets his money back." But disputing the chargeback is a headache. Neither disputing a chargeback nor granting a chargeback uncontested is something a merchant wants to do. Either way, a chargeback means that a credit card customer is causing headaches for a merchant. Chargeback's represent a vital and important means by which to combat credit card fraud perpetuated by credit card thieves or dishonest vendors. But a chargeback is a very unethical thing to do as a way of recovering money on an a valid, already-delivered product or service.


 True enough...the client is the bad guy.

 

If I were in OP's shoes, I'd sue the client for the fraudulent misrepresentations he made to his bank, and if the client was a business that dealt with the public, I'd do a press release to accompany the filing.

 

But then, I'm a former consumer protection attorney and a little crazy.  For a normal person, it's not worth the investment, which is what dishonest people rely on.

bizcraftdotbiz
Active Member
Dan M Member Since: Dec 8, 2017
10 of 34

Upwork is just trying to avoid the pain of collections by penalizing the freelancer.  I don't see this standing as appropriate action is taken through the Better Business Bureau and related parties.  In my case, I have now done several hours of work for several clients whereupon Upwork takes the money from the hiring parties, then steals the money from me.  There is no justifiable "oh, it's just the banking system" defense against this type of business practice.

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