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Chargebacks

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

@Daniel P wrote:
Chargebacks should be something Upwork absorbs. They lose that money, but still pay the freelancer.

Given that chargebacks aren't too frequent, I think this is a fair expense on the side of the company. I'm sure Upwork is earning a fair amount of profit for its investors.

I would love to see Upwork absorbing chargebacks but I also understand why it won't happen. First of all, a little bit off topic but Upwork is not making profits yet.

 

Absorbing chargeback is very risky. You say that chargebacks aren't too frequent, I wonder where you got this info. I don't have access to this kind of data so I don't know. But absorbing chargebacks would open the door to many fraudsters that are targeting all financial companies.

 

Imagine this simple scheme: you open a freelancing account and a totally different client account from somewhere else on the net. You hire yourself and pay with a stolen bank card. Since Upwork covers the payment, you get the money.

 

When you see how many fraud clients play cat and mouse with Upwork, opening tons of fake accounts to scam freelancers and how many fake freelancers are running bogus accounts out here, you can easily imagine that they won’t remain with their arm crossed watching to this incredible opportunity for profit, doing nothing.

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"Where darkness shines like dazzling light"   —William Ashbless
cupidmedia
Community Guru
Jennifer D Member Since: Feb 15, 2016
22 of 34

@Daniel P wrote:
Chargebacks should be something Upwork absorbs. They lose that money, but still pay the freelancer.

Given that chargebacks aren't too frequent, I think this is a fair expense on the side of the company. I'm sure Upwork is earning a fair amount of profit for its investors.

 *In general*, card schemes like merchants to have a chargeback rate of less than 2% (source: past experience working in fraud prevention for ecommerce industry). Upwork posts $1b worth of jobs annually (the generally accepted ballpark figure, from media releases etc). Now we know that not all those jobs actually result in someone being paid. We don't know how much their actual revenue is.

 

But worst case: Upwork has $20million worth of chargebacks annually (2% of $1b).

 

Now let's say Upwork are really good at preventing fraudulent chargebacks and their chargeback rate is more like 0.5%. And let's say that from the $1b jobs posted they only make 10% of that in revenue (which is, I think, *extremely* conservative.)

 

That gives best case: Upwork has $500,000 worth of chargebacks annually (.5% of 10% of $1b).

 

That is still a *huge* amount for an unprofitable company to absorb.

csjarmitage
Community Guru
Christy A Member Since: Dec 30, 2015
23 of 34

The Amazon model regarding chargebacks is interesting and sort of splits this down the middle.

 

If the chargeback is due to product quality, etc. the full responsiblity lies on the shoulders of the store owner and the money is charged to them.

 

If the chargeback is due to fraudulent activity (stolen card, etc.) Amazon absorbs the damage.  

 

 

 

 

qq-worker1
Active Member
Muhammad Z Member Since: Aug 3, 2016
24 of 34

I got a message from upwork for a charge back of $80 for a contract I have completed a month ago.

After submitting file to upwork that I had done work 100% accuractely and as per client's requirements, I got message from upwork that they will not charge my account for this charge back and will pay to client's bank on my behalf.

THANK YOU Upwork for Caring!!

 

But 

 

Here are few questions:

1. Neither I or Upwork on fault in this case, then WHY dont Upwork challenge such fake charge backs from client?

2. What If in future I face a charge back with a bigger amount like $1000 or so?

 

As Upwork is my only source of Income so I fear that today one-time courtesy is shown by upwork for $80 charge back.. Will this courtesy be shown on a bigger amount as well?

 

If I faced a charge back for $500 or above, I am sure I will not be able to pay back, as I use money earned from upwork on my family expenses and I will have no option to pay such amount to upwork.. What will happen to my account on upwork then??

 

Highly frustrated to face such issue and concerned about future now..

 

I am also in contact on a ticket as well. But Want that any moderator can please explain on this here as well??

 

Thank you upwork

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

Muhammad:

Your concerns are valid.


I don't have any easy answers for you.

 

Unfortunately, I think the potential for these chargebacks (on work that has long since been completed) is the biggest problem with Upwork these days.

 

Freelancers really should feel like Upwork supports them against inappropriate chargebacks from clients who are trying to "game the system." Unfortunately, a lot of this has to do with the nature of credit cards themselves, and is not necessarily all Upwork's "fault." As a freelancer, of course I would appreciate it if Upwork would do as much as possible to support freelancers and ameliorate the problem.

cupidmedia
Community Guru
Jennifer D Member Since: Feb 15, 2016
26 of 34

It's possible that Upwork *do* dispute chargebacks. But there would be a cost to them to do so, and no guarantee of a win. Unfortunately the chargeback system is tilted far towards the purchaser. That is not Upwork's fault, like Preston said - it's a fault of the entire banking system.

tlsanders
Community Guru
Tiffany S Member Since: Jan 15, 2016
27 of 34

@Jennifer D wrote:

It's possible that Upwork *do* dispute chargebacks. But there would be a cost to them to do so, and no guarantee of a win. Unfortunately the chargeback system is tilted far towards the purchaser. That is not Upwork's fault, like Preston said - it's a fault of the entire banking system.


 I agree with ther part about the difficulty of the process, but I have noticed that whenever freelancers come to the forums complaining of chargeback issues, it seems the first notice they've received is when the money was taken back out of their accounts. It's hard to imagine how Upwork could be making any serious attempt to challenge chargebacks without ever obtaining information from the freelancer.

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

@Tiffany S wrote:

@Jennifer D wrote:

It's possible that Upwork *do* dispute chargebacks. But there would be a cost to them to do so, and no guarantee of a win. Unfortunately the chargeback system is tilted far towards the purchaser. That is not Upwork's fault, like Preston said - it's a fault of the entire banking system.


 I agree with ther part about the difficulty of the process, but I have noticed that whenever freelancers come to the forums complaining of chargeback issues, it seems the first notice they've received is when the money was taken back out of their accounts. It's hard to imagine how Upwork could be making any serious attempt to challenge chargebacks without ever obtaining information from the freelancer.


 Upwork DO defend chargebacks, there is a whole department that does nothig BUT.

 

In most cases there is no need to contact the freelancer before defending, as anything like "unauthorised use" for example is nothing the freelancer could possibly contribute anything to.  A lot of chargebacks are accidental, because a client didn't remember or recognize the charge, or an accounts department and the person hiring didn't talk to each other, or one of joint account holders didn't talk to the other. Stuff like that is usually easily sorted out. Fraudulent "unauthorised use" claims are hard to defend and again the freelancer can't help with that. Matters of use of stolen or compromised cards or PayPal accounts or bank accounts can not be defended, so again there is nothing the freelancer could bring to the situation.

nathunandwani
Active Member
Nathu N Member Since: Apr 29, 2015
29 of 34

This is actually the first time in my whole stay here in Upwork wherein I have this message "Financial transactions have been limited. Please check your email for additional information or contact customer support." above my screen.

 

So here's the story:

 

I had a contract with a client (Hourly) and I have managed to get around 19 hours with work proof (In the work diary) but later, the client had problems with his account which he didn't seem to fix so Upwork terminated the contract and reverse the payment (which I should have gotten this day). My questions are: 

 

-Why still need to limit my account on withdrawals where they already reversed the payment from the somewhat 'problematic' contract? 

-I'll be getting my pay from another contract tomorrow and I feel that I am unable to withdraw that amount to my bank because of this issue. Am I correct?

-Should I be entitled to an hourly protection from that reversed payment? I used the Upwork time logging program for that contract.

-How long should it take for the risk management team to fix the issue? It has been days already and I have yet to receive any updates.

 

Hoping to hear from someone soon. Thank you so much for your time!

vladag
Community Manager
Vladimir G Community Manager Member Since: Oct 31, 2014
30 of 34

Hi Nathu,

 

I'm sorry about the outcome of your contract with this client. I see our agents responded to some of the questions you posted here already on the multiple tickets you created. As noted in their messages, please communicate only through your main ticket, which our team will update following the messages you posted there yesterday. It's important to keep the conversation in one place so please do communicate with our team directly as your case is already being processed as confirmed by the agent in their last reply.

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