Re: Client chargeback request of $12,500 afte... - Page 4

M A · ‎05-14-2021

Hi!

I worked for a client a year ago, and we finished alot of work together with different people creating websites, etc.

I used to record all hours manually as they’re mostly calls and communication, as I’m a project manager.

Now, one year later, Upwork is sending me an email that the bank is requesting a chargeback of more than $12,500 from my contract one year ago.

Then a few more freelancers who used to work with the same client contacted me and told me Upwork informed them with the same thing but with different amounts. I have a feeling that this client was a fraud or using another person’s account, or went broke.

Whatever the reason is, doesn’t matter. Upwork now is asking for proof of my work, which I sent, to TRY to tell the bank that those charges were done for freelancers who actually worked on something. But they also said the final decision will be the bank’s. So I feel my odds are not too great.

I contacted this client and he informed me he didnt do any chargebacks, validating my theory abit more that he is a fraud or broke.

The problem is, Upwork is freezing my withdrawals from my account till I pay the $12,560.

I do not have this amount, and I do not know what to do.

All of this is because according to Upwork, I did not log in the hours with their software and did it manually instead.

This is demotivating me from this platform after 3 years full time of working on it and being Top Rated Plus.

If anyone has any advice, please share.

Also a couple of questions, what if I refuse to pay even after the bank decided that they want the money back, does that put me in a bad legal position or could only lead to my account being banned?

If my theory is proven correct and this client was actually using another person’s card, shouldn’t that put Upwork the least bit accountable for anything?

The process of speaking to a bank could take 45 days, so I’ll just sit and do nothing till then.

Kindly advise,
Thanks,
Al

M A · ‎01-11-2022

Petra,

I feel this is becoming a less constructive conversation with you, and more a stubborn one. I will write this final reply for you as I know, at the end of the day, that you're a freelancer, and you could be on my boat any day. (Please remember this.)

There's no publicity stunt, I talked to their support and they closed the line with me. I asked them if they mind if I post this on the web, and they said we don't mind. People should be aware of this situation. (Or do you believe I should've not said anything? and simply paid up for the hours that I honorably worked for?)

I could've cleared that debt, but I am, again, a full-time Upwork freelancer. If I work 100% on Upwork and they take all my earnings, I will die of hunger. (I hope you wouldn't like that. 😂)

I never did anything wrong, Petra. I worked for more than 1500 hours for heaven's sake. I actually sat on my computer these hours, which are equivalent to almost a year of a 40h week of a normal person, and worked, and designed, and planned.

Hence, it morally doesn't sound right that I pay this money back. Upwork should have support and insurance for such cases. This problem starts with me, and it won't end here. Another freelancer a year from now will be asked for $100k back, and another would be asked for $1M, they should be aware of this, both Upwork and the freelancers.

Again, I'm very thankful for all your comments!

Have a great day,

Amanda L · ‎01-13-2022

M A wrote:

I worked for more than 1500 hours for heaven's sake. I actually sat on my computer these hours, which are equivalent to 3 years of a 40h week of a normal person, and worked, and designed, and planned.

I don't mean to sound argumentative, but to be clear, 1500 hours is not 3 years of a 40 hour work week. 1 year of a 40 hour work week is 2080 hours, if you don't count 2 weeks of vacation. If you do, then it's 2000 hours, for ONE year. So you the hours you worked are under a year, not 3 years worth of work.

Obviously you did a lot of work for this client, but exaggerations are what get us in trouble in trying to understand a situation like this.

M A · ‎01-13-2022

Thanks Amanda, fixed that miscalculation.

Christine A · ‎01-11-2022

Petra R wrote:
Christine A wrote: I would do some digging and see whether I can find any leverage to get my money back.
Christine, he hasn't LOST any money....

Okay fine, but he can certainly state the facts as he did in his original post in this thread; that he worked for this guy for two years, and the guy did a chargeback. Not just with him, but with other freelancers. I've had clients who've tried to rip me off before, and I knew who their business partners were, so I've gone to the client and said that I would have to let their partners know what happened. They paid up pretty quick. You can't get done for slander or libel if it's true.

I just find it very weird that the OP is focussing all of his efforts on fighting with Upwork instead of fighting with the client. I mean, he names and shames Upwork in the article that he wrote, but he doesn't name the client. Why?

M A · ‎01-11-2022

Hi Christine.

Thank you. The facts are the same in this thread as it is on the medium article that I wrote, as it is on the one on Hacker News, you just have to check the timestamp as things changed. Remember, this thread was before the 45-day timeframe where the bank was answering Upwork, which I learned a lot during.

Upwork has given me over 30 clients. They control how I talk with the client about what to say and what not to say. They take a commission from me. They have to validate that the client is not a fraudulent one. If not, then it's the same as craigslist. I'm not supposed to engage in a fistfight with the client. I'm not supposed to even contact the client outside of Upwork. This should be Upwork's responsibility.

I never shamed Upwork for anything but the fact that this situation is a direct result of their lack of vetting.

I can't name the client on Medium as it's against their rules. I can't name him generally, because of the nondisclosure agreements. Additionally, if I take this legally, I'll obviously name him, and sue accordingly.

I'm very mad at the client, but clients come and go on Upwork. I'm disappointed at Upwork because they're not admitting that this should have not happened and that they are not taking responsibility for getting paid from another credit card for close to two years. Eventually, again, it's all about informing others, so that they might learn from such a situation.

Thanks!

M A · ‎01-11-2022

It's a wild accusation there, Petra. In all cases, I've informed Upwork that I would love to cooperate in however matter they want. I don't need to provide Upwork with his name. (They already have it with his ID because of the verification, and if not, I have his information from our work and would love to help them out.)

I could not care less whether Upwork "lets me off" or not. That's up to them to decide. I only intend to inform what happened to me to other people.

Thank you very much!

Al

Christine A · ‎01-11-2022

M A wrote:
He lives in Zurich, Christine. He deals with very very wealthy clients. To them, a $30k annual deduction from their credit card, is equivalent to a $3 annual deduction from yours.

It still seems bizarre to me. If it was a one-time deduction, I could maybe see how someone could miss that, but several questionable payments on every statement (as you say that he worked with more than one freelancer)? I would definitely notice, even if it was only pocket change to me. Don't these rich guys have accountants?

M A · ‎01-11-2022

He did work with several freelancers on projects that included me. They even reached out for me later and told me that Upwork is asking them for a chargeback of different amounts. None was actually as big as mine.

M A · ‎01-11-2022

Additionally, Petra, I thank you for all your comments here. In my medium article, I was actually looking for people to show me other points of view, and I'm very thankful for you indicating in some messages that situation.

You have to be aware that Upwork made me who I am today. I couldn't have been more thankful for everything they've done. This is why, as you said, you're believing I'm directing my anger towards Upwork, truth is, it's a disappointment. The only way Upwork would keep improving is by us, the freelancers, pinpointing such problems.

If we're not to question whether the terms make sense, then we'll never improve them. Eventually, wherever this goes, I'm satisfied. If Upwork decides to remain dormant, I will seek legal advice towards the client. I will eventually be forced to pay back the $12.5k one way or another. I will, however, learn from this.

Most importantly, I will spread this so that that person who has three kids going to college, would put this in her/his calculation before quitting his job and freelancing on a platform.

Thanks a million,
Al

M A · ‎01-11-2022

🤦🏻‍ I give up trying to have a conversation with you, Petra. It's a hopeless case.

Good luck!

Will L · ‎01-11-2022

IEdited)

M A,

I'm sorry to hear about your troubles in this. And I hope you have found or will find some positive resolution.

I have benefitted from Upwork's payment protection on hourly projects from time to time, for which I am always grateful and highly recommend other freelancers use this aspect of Upwork's rules properly in order to protect themselves.

But we repeatedly see posts on this board regarding the problems other freelancers have faced by using manual hours rather than TimeTracker, which is too often a very bad idea (though it apparently works fine for many experienced freelancers). And if every freelancer were asked what is the project lifetime limit to Upwork's hourly projects payment protection, too few would know the answer is $2,500.

We'll no doubt hear voices here (as already elsewhere on this board) telling us that freelancers should know in great detail all of the details of Upwork's voluminous documentation, including all periodic changes. That is no doubt true, but Upwork should also go the extra step on such an important element of its services to freelancers to refer in its documents to "limited" payment protections, putting all freelancers on notice that Upwork is just a channel for payments from clients that will step in with paying freelancers out of its own pocket only under very specific circumstances. All freelancers should be aware there is no blanket "payment protection" for any contract through Upwork.

And if Upwork still requires that new freelancers take some sort of quiz about how Upwork works, the limits to these specific aspects of Upwork’s "payment protection" - payments for manual hours are never protected and there is a lifetime limit to the $ amount of protection for all projects - should be part of the tested curriculum.

Good luck with your own resolution to this problem.

Claudia Z · ‎01-12-2022

You were paid money that possibly came from a fraudelent activity (unauthorized use of a credit card). You can't keep the money from such activities. The money has to be returned...

What is exceptional in this situation is that you knew the client personally, residing in the same city ... you know the name, the address. You have enough details to pursue an action.

You can file with the authorities a criminal complaint against the client and declare that you want to become a party in the criminal proceedings as a civil claimant. As a foreigner you can ask for a traslator or interpreter, they might even appoint a lawyer from the office. However, Robin Hood and billionaire companies that can take the loss raises questions. Get your facts straight.

Petra R · ‎01-12-2022

Claudia Z wrote:
You were paid money that possibly came from a fraudelent activity (unauthorized use of a credit card). You can't keep the money from such activities. The money has to be returned...

Here's the thing though: The money HAS been returned. The second that chargeback happened, the money was returned. It was taken out of Upwork's account and they subsequently couldn't defend it.

Claudia Z wrote:
You have enough details to pursue an action. You can file with the authorities a criminal complaint against the client and declare that you want to become a party in the criminal proceedings as a civil claimant

At this point, the "client" hasn't cost the OP anything because he hasn't returned any money, nor does he intend to unless he is forced to do so. The only "victim" here at this point is Upwork.

To stand any chance of success, any criminal charges against the "client" would have to involve the alleged victim (the owner of the credit card), whose identity probably isn't known to the OP. The owner of the credit car has a bunch of their money back, so how motivated they would be to cooperate with anything is questionable.

Otherwise, the police will tell the OP that it's a messy civil case they won't have any intention of getting involved with.

Even if a criminal case were to lead to a result, that wouldn't help the OP because they'd still owe Upwork the money. So whilst a conviction would feel real good, ultimately someone would still be out $12.5k...

Claudia Z · ‎01-12-2022

Petra R wrote:
Here's the thing though: The money HAS been returned. The second that chargeback happened, the money was returned. It was taken out of Upwork's account and they subsequently couldn't defend it.
At this point, the "client" hasn't cost the OP anything because he hasn't returned any money, nor does he intend to unless he is forced to do so. The only "victim" here at this point is Upwork.

To stand any chance of success, any criminal charges against the "client" would have to involve the alleged victim (the owner of the credit card), whose identity probably isn't known to the OP. The owner of the credit car has a bunch of their money back, so how motivated they would be to cooperate with anything is questionable.

The return of the money hasn't been completed. The OP has to return the money to Upwork. The OP is also a victim. If the OP doesn't return the money, he is susceptible to be suspected as an accomplice in the fraudelent activity.

Possibly the OP thinks it's easier to determine Upwork forgive what he owes, and move on.

Through a criminal investigation it would be collected evidence, the client interrogated ... the OP doesn't need to know who's card was used, a victim doesn't know the mechanism of the fraud ... that's what a criminal investigation should determine.

M A · ‎01-12-2022

Yes, you are correct. Yet, if an investigation occurs, I'd be the most cooperative person. Given the facts of the case, they never sent me a legal document indicating that they would pursue legal action in case I don't return those funds. According to their terms, they should inform me before doing so. I even sent an email to Upwork's legal notice department to try to resolve this, with no response (that was in July).

I'm currently, after reading the hundreds of comments on Medium and HackerNews, getting pushed to hire a lawyer to handle two things:-

1. Retrieve those funds from Robin and return them to Upwork

2. Study Upwork's ToS to check whether a client having another person's credit card is allowed. Because if it was an Upwork mistake, then I shouldn't by any means be punished by it.

Thanks,

Al

Claudia Z · ‎01-13-2022

M A wrote:
2. Study Upwork's ToS to check whether a client having another person's credit card is allowed. Because if it was an Upwork mistake, then I shouldn't by any means be punished by it.

"By providing Payment Method information through the Site and authorizing payments with the Payment Method, Client represents, warrants, and covenants that: (a) Client is legally authorized to provide such information; (b) Client is legally authorized to make payments using the Payment Method(s); (c) if Client is an employee or agent of a company or person that owns the Payment Method, that Client is authorized by the company or person to use the Payment Method to make payments on Upwork; and (d) such actions do not violate the terms and conditions applicable to Client’s use of such Payment Method(s) or applicable law."

https://www.upwork.com/legal#PAYMENTMETHODS

Claudia Z · ‎01-12-2022

Petra R wrote:
Even if a criminal case were to lead to a result, that wouldn't help the OP because they'd still owe Upwork the money. So whilst a conviction would feel real good, ultimately someone would still be out $12.5k...

When you file a criminal complaint you can request to become a party in the criminal proceedings as a civil claimant (to be compensated for the loss).

If the OP files a criminal complaint ... the client may reconsider whatever and return to Upwork the money owed. Or maybe return the money to the OP.....

M A · ‎01-12-2022

You do understand that hiring a lawyer where I am to brief him with this situation costs at least $6k, which is half the total amount we are talking about? That's what's complicating the situation.

If Upwork connects me with frauds, the least they could do is be accountable for doing so, and help out in the process. Not throw the whole legal responsibility and add it to my job description.

Maria T · ‎01-12-2022

M A wrote:
You do understand that hiring a lawyer where I am to brief him with this situation costs at least $6k, which is half the total amount we are talking about? That's what's complicating the situation.

If Upwork connects me with frauds, the least they could do is be accountable for doing so, and help out in the process. Not throw the whole legal responsibility and add it to my job description.

You go on and on.
Upwork has done what it could do, no more, no less.
You keep saying they should have controlled whose card it was, why? Payments were made without problem and neither Upwork nor YOU doubted that everything was correct.
Who tells you that it was not a business card that your client had access to to make payments? And that, at one point, for whatever reason, something went wrong, and the "owner" of the card decided that he wanted to recovert as much as possible?

And again, Upwork doesn't connect you with frauds. You connected, through Upwork, with a fraud.

M A · ‎01-12-2022

If they don't control the payments security, then they shouldn't control the payments, and allow freelancers to do so on their own.
I didn't just connect with Upwork to the fraud. Upwork gave me a paycheck by taking money from the fraud, and giving it to me, and taking their cut. I don't have control over that situation.

I feel like I've been going on and on around the same situation.

This community has several people who believes that Upwork is just a software you're using. That's up to you to believe that. Truth is, Upwork has a responsibility, to at least clear the checks before passing them through, or to inform me that a situation like this might happen.

I have no intention whatsoever on giving a bad PR image whatsoever to Upwork. I only stated what happenned in my case, so that people would see that this is a possibility. Aside from that, whatever happens with my case on Upwork.

I will resolve with Upwork and a lawyer, then update my blog accordingly. It's quite tiring trying to convince a minority of the readers in what I believe in should be Upwork's responsibility.

Thanks for your comments, Maria, I know you mean to clarify the situation as much as possible...

Excuse me if I refrain from answering anymore in this thread, except with a valid update.

Have a fantastic day!

Claudia Z · ‎01-12-2022

M A wrote:
I didn't just connect with Upwork to the fraud. Upwork gave me a paycheck by taking money from the fraud, and giving it to me, and taking their cut. I don't have control over that situation.

You miss the point .... Upwork is also a victim.

The client could have had access and means to manipulate the bank and Upwork relating to payment method verification/processing ... until something happened and triggered a chargeback. Maybe the card belong to the client and the chargeback was filed by the client.

You've worked with the client for two years, you didn't notice any red flags?

There is some feedback on the client's profile that indicate there were some concerns.

Tom Z · ‎01-15-2022

Claudia Z wrote:
M A wrote:
I didn't just connect with Upwork to the fraud. Upwork gave me a paycheck by taking money from the fraud, and giving it to me, and taking their cut. I don't have control over that situation.

You miss the point .... Upwork is also a victim.

The client could have had access and means to manipulate the bank and Upwork relating to payment method verification/processing ... until something happened and triggered a chargeback. Maybe the card belong to the client and the chargeback was filed by the client.

You've worked with the client for two years, you didn't notice any red flags?

There is some feedback on the client's profile that indicate there were some concerns.

Exactly... Upwork is also the victim here. They have to pay a chargeback fee, that they didn't pass on to you (I'm not sure if it's a % of the amount or a flat fee).

M A, I think what everyone is trying to tell you is... There are laws governing chargebacks, and unfortunately chargeback fraud laws hasn't been updated since 1995, and Upwork hands are bound. In cases of chargebacks very rarely does the merchant (upwork) win against the chargeback bank, can this process be improved on Upwork's end? Sure, but again, the law is on the chargeback bank's side. So I think what you should do if I were you is, again, pay back Upwork so you don't get banned, and continue to work, it's just $12k, you'll earn it back in a month or so, and write it off as a loss on your tax return (or as much as you can, depending on how much tax you actually owe). I wouldn't waste any time or money consulting an attorney, unless if it's a free consult... definitely not worth $6k or wherever you got that number from, as I previously mentioned. $6k is usually the cost of taking a class D felony to trial in the US. I bet if you actually called around the price should be at the most $2000, or some attorneys work off of contingency, you pay them nothing upfront, but they get a % of the recovered asset. Also, please share with us the Bank... so we can at least be aware of that bank and possibly petition Upwork to ban that bank. I've never heard of any banks issuing a chargeback 2 years after... 4 months is the max even for AMEX. Imagine how many other victims of this bank, gosh. Oh I bought a $2000 TV 2 years ago, now it's time for upgrade, let me charge back so I can buy a new one for free.

Amanda L · ‎01-13-2022

M A wrote:

This community has several people who believes that Upwork is just a software you're using.

The thing is, those of us that believe that, and treat it as such, and behave accordingly, have a far smaller chance of this happening, because we don't just "trust" clients.

That said, it's a good reminder to all of us about choosing what level of risk we want to take on and what precautions we want to take to mitigate that risk. I would have to speculate that this is really a story from the far end of the spectrum of bad outcomes.

I know everyone is asking a lot of questions and it may feel like an interrogation. Remember that we weren't there or within the client-freelancer relationship, so we are trying to grasp the sequence of events, etc. And regardless of our questions, I don't think anyone finds you at fault. No one who is scammed like this is actually at fault, but we all try to look at ways we can mitigate risk. You work with dilutive funding; I work with nondilutive funding. So it's of interest to me in adding additional checks and balances to my vetting process.

Claudia Z · ‎01-12-2022

M A wrote:
You do understand that hiring a lawyer where I am to brief him with this situation costs at least $6k, which is half the total amount we are talking about? That's what's complicating the situation.

Filing a criminal complaint with the police is free. You need to figure out the exact place you can file. Maybe you can file the complaint online. You have to provide the name of the person you're filing against, provide any information and evidence. You can give a verbal statement and they will make a report, or you can write your own statement.

You can write your statement ... and hire a lawyer to review it (hire per hour ... not retain the lawyer for the entire thing). When you file a complaint with the police ... you don't have to point what's the criminal code, on what grounds in law you are filing your complaint ... you state the facts and provide evidence. The police will investigate and determine the rest.

Tom Z · ‎01-15-2022

M A wrote:
You do understand that hiring a lawyer where I am to brief him with this situation costs at least $6k, which is half the total amount we are talking about? That's what's complicating the situation.

If Upwork connects me with frauds, the least they could do is be accountable for doing so, and help out in the process. Not throw the whole legal responsibility and add it to my job description.

$6k? That's a lot... Did you actually call around or just found that number somewhere online. Most attorneys in US offer a free 30 minute consultation... Just to give you an idea... $6k is the cost of usually taking a felony case to trial... For example if you had aggravated assault, and you needed criminal defense to spend months to prep you from initial arraignment, to discovery, to plea offers, to trial (if you don't accept the offer) - the attorney would have to spend a lot of time reviewing the prosecutation case against you, and select a jury... and spend time coaching you on any depositions, or take depositions of witnesses against you. And then actually spend 1 to 4 hours at the actual trial. All the while, file motions and juggle so many things. $6k sounds.... extremely overpriced to consult an attorney.

Client chargeback request of $12,500 after one year.