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al-anani
Community Member

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

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
137 REPLIES 137

Yes, I read these docs before. And I accepted that. 

 

But there are no contradictions between these docs and my "badge" suggestion. Just the things could look more clear, and freelancers could make a decision to take the risks and work with a client who doesn't represent himself but represents a company, 3rd party, etc,  and use corporate credit cards, 3rd party credit cards, etc.,  OR just avoid such a client for safety reasons (like chargebacks, etc).  

 

You could see there are a lot of similar "refund" and "chargeback" topics... 


Paul T wrote:

Yes, I read these docs before. And I accepted that. 

 

But there are no contradictions between these docs and my "badge" suggestion. Just the things could look more clear, and freelancers could make a decision to take the risks and work with a client who doesn't represent himself but represents a company, 3rd party, etc,  and use corporate credit cards, 3rd party credit cards, etc.,  OR just avoid such a client for safety reasons (like chargebacks, etc).  

 

You could see there are a lot of similar "refund" and "chargeback" topics... 


What prevents you from gathering information before starting or continuing a contract, to make your own decision? Is it a company , is it a person, who is funding the project.

 

Merchants are dependent on the card issuer to prevent and detect unauthorized charges, alert card holder for irregular activities ... Upwork doesn't rely solely on card issuer to validate the charge, there are some other measures ... ie releasing funds after 5 days, may perform additional checks ID verification whatever..... 

 

 


Claudia Z wrote:

Paul T wrote:

Yes, I read these docs before. And I accepted that. 

 

But there are no contradictions between these docs and my "badge" suggestion. Just the things could look more clear, and freelancers could make a decision to take the risks and work with a client who doesn't represent himself but represents a company, 3rd party, etc,  and use corporate credit cards, 3rd party credit cards, etc.,  OR just avoid such a client for safety reasons (like chargebacks, etc).  

 

You could see there are a lot of similar "refund" and "chargeback" topics... 


What prevents you from gathering information before starting or continuing a contract, to make your own decision? Is it a company , is it a person, who is funding the project.

 

 

 


And which information are you able to gather about clients there? Ask a client " who are really you?" 🙂

 

- Are you not a scammer? 

- 100%, I'm not;

- Are you going to use your own card and no one will not request a chargeback? 

- Of course not, this card [was stollen and the owner still not noticed] is mine, I can make 2-sides copy and send it to you;

- And your address please too - I will check your credentials and forget it immediately after that; 

 

Something like that? 

 

------

 

Thankfully, most of the people here are good people - great clients and the best freelancers as well. But if someone, who is not a good one,  wants to scam you - be sure he will. Just because the current system of payments, as we can see, is based only on trustful relationships. 

 

And this guy who started this topic here - maybe he is a victim maybe he is not, actually created something like "HOW-TO" for them and shared it at every corner of the Internet. 

 


Paul T wrote:



And which information are you able to gather about clients there? Ask a client " who are really you?" 🙂

 


It depends ... if a client is telling you "I forgot that there is a credit card connected in my account that wasn’t actually mine” ... you ask ... were you authorized to use this card? Who is this person, is it a business partner? You don't just let it go ...

 

If a client is telling you about having issues with Upwork and the card, and you are aware manual hours aren't protected ... you investigate a little, get some peace of mind things don't turn against you.

 

 


Excerpts from OP website:

 

"In 2018, I signed a client as usual. Let’s call him “Robin”


"I meet Robin, and we conduct a brainstorming session and a few meetings. The only reasonable thing to do at this stage is to add manual hours..... I recorded manual hours, lots of them."


"Anyway, that lasted for a couple of years and ended when he informed me that he has issues with Upwork and his credit card. "


"I’ve worked with him till Sept of 2020"


"Until May of 2021, when I receive an email from Upwork: We are writing today to let you know that a payment made to your account has been reversed by your client’s bank."


"Is Robin really asking for a chargeback? That’s impossible. I start investigating by calling Robin. He apologized and said he never called any bank, additionally, he said this is a bit of a mess-up as he forgot that there is “a credit card connected in his account that wasn’t actually his”.

 


Claudia Z wrote:

Paul T wrote:



And which information are you able to gather about clients there? Ask a client " who are really you?" 🙂

 


It depends ... if a client is telling you "I forgot that there is a credit card connected in my account that wasn’t actually mine” ... you ask ... were you authorized to use this card? Who is this person, is it a business partner?

 

If a client is telling you about having issues with Upwork and the card, and you are aware manual hours aren't protected ... you investigate a little, get some peace of mind things don't turn against you.

 

 


 


Sorry Claudia, I don't believe in pink ponies and unicorns.

 

If a client is a scammer then he will tell to freelancer a story that the freelancer wants to hear. And there is no way for freelancers to know if it was truth or not. 

 

In case of a bad client it would be like that: 

- do you use your own card?

- sure, no worries! 

....

Job done. Chargeback. End of story.

 

Similar happened with M A

 

 

 

 


Paul T wrote:

If a client is a scammer then he will tell to freelancer a story that the freelancer wants to hear. And there is no way for freelancers to know if it was truth or not. 

 


True, but the OP choose to believe the client story, whatever that was. The OP sided with the client.

 

The client and freelancer met in person, the client isn't an unknown, a faceless person behind a computer.


Paul T wrote:


No problem, then UW just needs to remove the badge "Payment verified" in case the credentials don't  much for 100%, you know, just to avoid any possible misunderstanding or misinterpretation and add something like " Payments methods under different credentials. Be advised, chargeback is possible" .


Chargebacks are, by definition, ALWAYS a possibility, regardless of the credentials.


Petra R wrote:

Paul T wrote:


No problem, then UW just needs to remove the badge "Payment verified" in case the credentials don't  much for 100%, you know, just to avoid any possible misunderstanding or misinterpretation and add something like " Payments methods under different credentials. Be advised, chargeback is possible" .


Chargebacks are, by definition, ALWAYS a possibility, regardless of the credentials.


Yes, exactly.

 

But there would be a different story for all 3 parties involved if a client used his own credit card, represented himself, decided to initiate a chargeback by himself as well.

 

So, I think it's a good idea to mark the clients who represent 3rd party or use the payments methods that are not under their credentials. It would help freelancers to avoid the situations like this one or many similar which we can see right on this forum.

 


Paul T wrote:

Petra R wrote:

Paul T wrote:


No problem, then UW just needs to remove the badge "Payment verified" in case the credentials don't  much for 100%, you know, just to avoid any possible misunderstanding or misinterpretation and add something like " Payments methods under different credentials. Be advised, chargeback is possible" .


Chargebacks are, by definition, ALWAYS a possibility, regardless of the credentials.


Yes, exactly.

 

But there would be a different story for all 3 parties involved if a client used his own credit card, represented himself, decided to initiate a chargeback by himself as well.

 

So, I think it's a good idea to mark the clients who represent 3rd party or use the payments methods that are not under their credentials. It would help freelancers to avoid the situations like this one or many similar which we can see right on this forum.

 


"Upwork offers the Site and Site Services for your business purposes only and not for personal, household, or consumer use. To register for an Account or use the Site and Site Services, you must, and hereby represent that you: (a) are an employee or agent of and authorized to act for and bind an independent business (whether it be as a self-employed individual/sole proprietor or as a corporation, limited liability company, or other entity); (b) will use the Site and Site Services for business purposes only; ....."

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

 

"While Upwork may provide certain badges on Freelancer or Client profiles, such badges are not a guarantee or warranty of quality or ability or willingness of the badged Freelancer or Client to complete a Service Contract and is not a guarantee of any kind, including, the quality of Freelancer Services or Client Project."

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


Claudia Z wrote:
Don't you think there should be some consequences? What if a freelancer notices some red flags but continue working thinking oh this is Upwork's responsibility, I'll get paid regardless.

Yes, and I've even seen some freelancers saying exactly this - that they thought a client seemed dodgy, but what the hell, Upwork will cover the payment, so why not go ahead anyway?

 

I started out working on Elance, which had no escrow, no payment protection and no dispute/arbitration process; if a client didn't pay you, it was between you and the client. It's a continuing source of astonishment to me that Upwork offers payment protection of any kind, yet all you see in the forum are complaints that manual time isn't covered, or promises from the client aren't covered, or even attempts at blatant scams on the freelancer's part aren't covered ("I purchased bitcoin for a client and Upwork won't pay me back!" and "I tracked time at 400 times my usual rate, and Upwork won't cover it!"). Instead of being grateful that Upwork offers any protection at all, it seems to have led to an expectation that they'll cover you no matter what happens.

 

I certainly don't like to see freelancers getting ripped off after working hard on a project, but on the other hand, it's open to widespread abuse, and I don't see how Upwork can sustain this and ever make a profit.

 

00137e0a
Community Member

I was talking to a friend of mine, who is a very prestigious lawyer, and he said that this is a Police matter.

 

Allegedly, the client has committed fraud, and he's the only one that should be held responsible for refunding MA/Upwork. 

 

Of course, it might be different in Switzerland (I'm from Brazil), but if MA has access to the client's personal information, he should go to the police and press charges against him.

 

Sometimes a little bit of police pressure works well to solve things like this. The client might very well decide to pay up his debt instead of getting in trouble with the law. 

 

 

 

 

re: "I was talking to a friend of mine, who is a very prestigious lawyer, and he said that this is a Police matter."

 

I REALLY THINK it would depend on the police department, and even the individual police officer.

 

I am certain that many police departments generally and many police officers specifically would flat out tell you that this is not something they handle, that it is a civil matter and you need to talk to an attorney. Or they might tell you that matters such as this are handled by a regulatory agency.

 

These are two DIFFERENT questions:

 

- Is this a police matter on Switzerland?
- Is this a police matter in my local jurisdiction?

The answer is not necessarily the same for everyone on the world.

 

re, "Of course, it might be different in Switzerland (I'm from Brazil)"

 

I agree.


Preston H wrote:

re: "I was talking to a friend of mine, who is a very prestigious lawyer, and he said that this is a Police matter."

 

I am certain that many police departments generally and many police officers specifically would flat out tell you that this is not something they handle, that it is a civil matter and you need to talk to an attorney. Or they might tell you that matters such as this are handled by a regulatory agency.

 


To achieve a successful recovery or increase the chances in a civil lawsuit involving fraud elements, such is preceded by criminal proceedings.


In a civil lawsuit the court may consider that the money paid to the freelancer were part of a possibly fraudulent activity, it would require extensive process discovery, remedies... the obligation to repay the chargeback may remain the responsibility of the freelancer ... the court may review the work that has been done, the specifics of the  contract, assess compensation ... depending on how the client defends in court, the compensation may be much lower than the actual amount the freelancer has to return.


Rafael M wrote:

I was talking to a friend of mine, who is a very prestigious lawyer, and he said that this is a Police matter.

 

Allegedly, the client has committed fraud, and he's the only one that should be held responsible for refunding MA/Upwork. 

 

Of course, it might be different in Switzerland (I'm from Brazil), but if MA has access to the client's personal information, he should go to the police and press charges against him.

 

Sometimes a little bit of police pressure works well to solve things like this. The client might very well decide to pay up his debt instead of getting in trouble with the law. 

 

 

 

 


I don't know the laws in Swiss, but even if the police decides to investigate "fraud" --- this could take months, and the fact that the client's bank already approved the chargeback, and the Upwork's bank also agreed to the chargeback, I don't think there's much for police to investigate. Even if they did found him guilty of fraud, it will be months before M A gets notified, appear in court to testify against his client, and the judge's sentencing may not fully recover the $12k (restitution), in fact the judge may find your client not guilty if he hires a good lawyer.

 

I think it's a big waste of time man. Pay back Upwork, continue to work, you'll earn the $12k back soon, and just write off the $12k as business loss in your taxes.

wlyonsatl
Community Member

But, Petra, Upwork actually does make it so that a freelancer CAN have it both ways, by paying Upwork's fees, adhering to certain procedures (including utilizing TimeTracker effectively) and not expecting protection beyond $2,500 in lifetime protection for each client.

 

 

tomzilla1
Community Member

For those of you wondering, I googled... Raiffeisen Bank, a swiss bank, not sure if that's the bank, but anyways - that bank can allow bank clients charge back up to 540 days from the time of each transaction... That's... he can file a charge back on you every 1.5 years. And note, at the time of each transaction. So... Basically there's the loop hole. I'm glad you stopped working for that guy, theoretically if Upwork didn't notify you of the charge backs, you could've worked indefinitely for that guy and one day say after 10 years, you realized oh crap.


Tom Z wrote:

That's... he can file a charge back on you every 1.5 years. 


No, that's not what it means. It means he can file a chargeback for all transactions that go back no further than 540 days. This was the case here. There were many more transactions (the client paid the OP over $38k altogether) which fell outside the limit.

 

Let's not forget that all this happened back in April/May last year.

 


Tom Z wrote:

 I'm glad you stopped working for that guy, theoretically if Upwork didn't notify you of the charge backs, you could've worked indefinitely for that guy and one day say after 10 years, you realized oh crap.


He didn't have a choice. The client's account was suspended. And the card-holder could only ever charge-back transactions that happened a maximum of 540 days ago.

andregutierrez22
Moderator
Moderator

Hi all,

 

This thread has been closed from further replies due to its size and the arguments being exhausted. I'd like to thank all participants for their valuable input.

 

~Andrea
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