Clint wants a refund for work delivered!

[hussein_shafik]

I've been on upwork for many years now and luckily I've never dealt with a bad client! however recently I worked on a project with a client that wanted a website finalizaing for 100$ and I agreed. He had a product that needed renders so I offered to do the renders as well for another 100$ an to have 2 milestones one for the renders and one for the website.

I finished the first milestone which was the renders and asked him to realese the amount in escrow for the first milestone which he did.

The client totaly miss briefed me and i ended up doing a whole new website for him and in good faith I did the work and then mentioned that we needed to discuss amending the fee as the brief was for finalizing the site and i ended up doing a full design for a new site! client then refused and sent more work demanding that i either finsh the work done or he will file a dispute to refud the whole job even though he alredy got the renders requested.

I honestly never dealt with this before and welcomed the filing of the dispute as I knew that I was right and he was in the wrong!

The client then keeps lying and says that he got nothing for the first milestone and that I had the repay him the full amount or continue the work, to which I refused!

To try and end this I ended the contact and released the 100$ that were in escrow to him so I can just move on! only to find that he still wants the first 100$ he paid for work delieverd and he continues to lie about what happened!

He now want to file for arbitration for the 100$ released and he asked the mediation officer to begin the arbitration! even though it will cost him more to do so! he's even asking the mediation officer that I compensate him for time wasting!!!

I really don't know what to do or how to deal with this as I see it is not fair for me to give him the work done for no fees and I'm worried I will be forced to!

My question is does he have the right to do so even for an amount that has already been released!? and am I obliged to accept arbitration for the amount already released even though it will cost me and him even more money! 

Also the mediation officer is not helpfull at all and doesn  not reply to the thread it's just me and him going back and forth to where we started! the last reply from the officer was almost 4 days ago and it's just me and him arguing in a thread!

[prestonhunter]

Hussein:
I am really sorry that you are in this situation. I'm sorry that you need to deal with this.

I believe this is one of the great weaknesses of the Upwork system.

re: "Am I obliged to accept arbitration for the amount already released even though it will cost me and him even more money?"

Participating in arbitration is always OPTIONAL.

A freelancer is never obligated to go to arbitration. A freelancer can always decline to go to arbration. Likewise, a client can always decline to go to arbitration.

re: "Also the mediation officer is not helpfull at all and doesn not reply to the thread it's just me and him going back and forth to where we started! the last reply from the officer was almost 4 days ago and it's just me and him arguing in a thread!"

It sounds to me like the mediation phase of this whole thing has not yet played out. We just had Christmas. New Years is later this week. Many people are on vacation. There may indeed be some significant delays at this time, with regards to hearing from the Upwork mediation officer.

Should you continue to participate in the mediation proces? You SHOULD answer any questions that the mediation officer asks of you. Don't ever ignore him. But if he is taking time to get back to you, at this holiday time, you may need to be patient.

Should you insist on going to arbitration? That is an option. This could be a "bluff." If you insist on going to arbitration, then the client may decline to do so, because both of you would need to pay $291. If you insist on going to arbitration, and the client declines to do so, then all money in escrow goes to you, and you won't need to pay the $291 arbitration fee (or will get it back).

Also: It is possible that Upwork will pay out settlement money if both you and the client insist on going to arbitration. Because Upwork themselves would need to pay $293 out of pocket. and they may not want to do that if the amount of oney involved is relatively small compared to the arbitration costs and the potential fees the company can collect.

It is also possible for you to come to a compromise with the client, through the mediation officer. For example, could offer to accept a payment of 50% of the money in escrow, and let the other half be refunded back to the client. The client may accept such an offer, for the sake of expediency. Right now, if you refuse to refund all escrow money to the client, you are blocking him from receiving the money. So he may be willing to settle this in order to move on.

These are just some general observations about how this process works.

Note that nobody here is saying that you are being treated fairly.

Nobody here in the Forum can make the decision for you.

[hussein_shafik]

Thank you for your reply,

I honestly did not consider the vaction period that we are at right now! but you are right this is definatly the reason.

I have another question regardig arbitration if you don't mind me asking.. What if i refuse to do it.. I read in some threads that my account can be susspended as you know since covid work has been limited and Upwork is now my main source of income so I'm very worried about susspention of my account that I've been building for the past 2 years now with 100% JSS.. 

Or does this only apply to amount in escrow and not to already paid milestones?

[petra_r]

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Hussein S wrote:

I have another question regardig arbitration if you don't mind me asking.. What if i refuse to do it..

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If you refuse to do it and the client pays for arbitration (which is unlikely but not something I would want to bet your Upwork account on), you will have your Upwork account suspended.

See the Terms of Service - 

Fixed Price Service Contract Escrow Instructions - 7.1 2b

Rejection of Arbitration or non-participation by one party: If one party elects to take the matter to Arbitration and has submitted the Arbitration Payment, and the other party rejects Arbitration, fails to submit the Arbitration Payment or does not respond within 5 calendar days of the Notice of Arbitration Demand, Upwork will suspend the Non-Participating Party’s User account, as defined in Section 1.4 of the User Agreement, which may impact the Non-Participating Party’s ability to withdraw funds.

[hussein_shafik]

I can see that this is regarding the amount in escrow does the same apply to amount released by client?

[petra_r]

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Hussein S wrote:

I can see that this is regarding the amount in escrow does the same apply to amount released by client?

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Absolutely

[tagrendy]

Do you have a screenshot from old date? Because I checked the link and the text in 7.2 b is not the same as the red text outlined in the screenshot you attached. There is no mention of account suspension.

[petra_r]

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Tatevik G wrote:

Do you have a screenshot from old date?

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A what????

Just read the Terms of Service.

[petra_r]

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Preston H wrote:

re: "Am I obliged to accept arbitration for the amount already released even though it will cost me and him even more money?"

Participating in arbitration is always OPTIONAL.

A freelancer is never obligated to go to arbitration.

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This is categorically untrue. And terribly dangerous advice that can see the OP suspended.

When the dispute includes already released money, as is the case here, and the client opts for arbitration, the freelancer MUST either repay all the disputed money paid under the entire contract, proceed to arbitration (and pay for it) or will have their account suspended.

[prestonhunter]

re: "This is categorically untrue."

Actually, it is true.

To clarify:

Participating in arbitration is always optional.

Furthermore, a freelancer is never obligated to go to arbitration.

This was accurate information that I provided to the original poster, who was wondering if he was obligated to go to arbitration.

The fact is:
He is not obligated to go to arbitration.

Freelancers are never obligated to go to arbitration.

During the mediation phase, if things come to a standstill... if an agreement can not be made, then the choice is presented to go forward to arbitration.

A freelancer may:

a) choose to go forward to arbitration

[or]

b) choose to NOT go forward to arbitration

A freelancer is not forced to go to arbitration.

A freelancer may choose to NOT go to arbitration.
if the freelancer chooses to NOT forward to arbitration, and the client DOES want to go to arbitration and is willing to pay for arbitration, then the matter will NOT GO to arbitration.

The money in escrow will go to the client, and the matter is over.

If the dispute pertains to already-released money, then the freelancer can repay disputed money instead of going to arbitration. The arbitration fee is $291. Depending on the number involved, it may make sense for a freelancer to repay disputed money or allow in-escrow money to go to the client, rather than participating in arbitration.

A freelance should never refuse to participate in the whole dispute/mediation process. Because that could result in money going to the other party by default, or could even result in the freelancer's account being suspended or otherwise sanctioned.

But Upwork never requires that either party (freelancer or client) go forward to arbitration if they don't want to do so.

[m_terrazas]

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Preston H wrote:

re: "This is categorically untrue."

Actually, it is true.

To clarify:

Participating in arbitration is always optional.

Furthermore, a freelancer is never obligated to go to arbitration.

This was accurate information that I provided to the original poster, who was wondering if he was obligated to go to arbitration.

The fact is:
He is not obligated to go to arbitration.

Freelancers are never obligated to go to arbitration.

During the mediation phase, if things come to a standstill... if an agreement can not be made, then the choice is presented to go forward to arbitration.

A freelancer may:

a) choose to go forward to arbitration

[or]

b) choose to NOT go forward to arbitration

A freelancer is not forced to go to arbitration.

A freelancer may choose to NOT go to arbitration.
if the freelancer chooses to NOT forward to arbitration, and the client DOES want to go to arbitration and is willing to pay for arbitration, then the matter will NOT GO to arbitration.

The money in escrow will go to the client, and the matter is over.

If the dispute pertains to already-released money, then the freelancer can repay disputed money instead of going to arbitration. The arbitration fee is $291. Depending on the number involved, it may make sense for a freelancer to repay disputed money or allow in-escrow money to go to the client, rather than participating in arbitration.

A freelance should never refuse to participate in the whole dispute/mediation process. Because that could result in money going to the other party by default, or could even result in the freelancer's account being suspended or otherwise sanctioned.

But Upwork never requires that either party (freelancer or client) go forward to arbitration if they don't want to do so.

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Preston, with all my love, can you explain to me why you make it so difficult to follow your answers?

[petra_r]

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Maria T wrote:

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Preston, with all my love, can you explain to me why you make it so difficult to follow your answers?

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It's on purpose.

[petra_r]

Preston, You know as well as I do that this is not what you originally portrayed to the OP.

[prestonhunter]

re: "You know as well as I do that this is not what you originally portrayed to the OP."

My original answer appears in this thread, with the post date and last-edited date. The last-edited date predates your criticism of the answer.

My original answer conveys the same information that my follow-up does. My answer directly and accurately addresses the original poster's question:

"am I obliged to accept arbitration for the amount already released even though it will cost me and him even more money!"

it's an important question, that clearly was of concern to the original poster.

Fortunately for him and for other freelancers, nobody is obligated to pay $291 and go to arbitration.

[tagrendy]

Arbitration is only for money in Escrow, released money is yours. My advise - ignore him, do not give any refund, he is using intimidation tactic, only respond to Upwork. 

I don't know when if ever Upwork will fix this frustrating loophole where any client can basically receive work for free if the amount is less than the Arbitration cost.

[prestonhunter]

re: "I don't know when if ever Upwork will fix this frustrating loophole where any client can basically receive work for free if the amount is less than the Arbitration cost."

Many freelancers avoid this by using hourly contracts only.

My recommendation for freelancers using fixed-price contracts:
Start out small when dealing with a new/unknown client. Start with a contract worth no more than an hour or two of work. This gives the client an opportunity to demonstrate that they can be trusted with a fixed-price contract. If you do the work and the client pays you as expected, then you can agree to increasingly larger fixed-price milestones/contracts. If the client turns out to be somebody who can not be trusted with a fixed-price contract... Then it is possible to walk away without having lost too much time.

[hussein_shafik]

You have no idea! he wants me to compenate him for his "time wasted" and telling the mediation officer that he wants to add that to the arbitration prosess if possible otherwise he will sue me!! for a 100 bucks!!!!

[prestonhunter]

Hussein:

You are describing a client who is behaving in an unprofessional, unethical and immoral manner.

[tagrendy]

If I were you, I'd end the contract, block him - after sending a hand emoji, and let him talk to the hand. 🖐

[hussein_shafik]

Exactly what I did! unfotunatly he's still bugging me on the disput case thread 

[a_lipsey]

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Tatevik G wrote:

Arbitration is only for money in Escrow, released money is yours. My advise - ignore him, do not give any refund, he is using intimidation tactic, only respond to Upwork. 

I don't know when if ever Upwork will fix this frustrating loophole where any client can basically receive work for free if the amount is less than the Arbitration cost.

---

I am pretty sure you're incorrect. Arbitration can be held without money in escrow. If the findings are against the freelancer, they will debit his Upwork account and put it in the negative until he earns enough to cover it. 

[tagrendy]

How? Arbitration is held by all 3 parties paying, if one refuses to pay, no arbitrar comes to investigate and the money in Escrow defaults to the side that paid for Arbitrar. So in this case, client pays, freelancer refuses, escrow money defaults to the client.

I've had a similar client that wanted refund for released milestone, didn't get it, and no arbitration took place cause I refused.

[petra_r]

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Tatevik G wrote:

How? Arbitration is held by all 3 parties paying, if one refuses to pay, no arbitrar comes to investigate and the money in Escrow defaults to the side that paid for Arbitrar. So in this case, client pays, freelancer refuses, escrow money defaults to the client.

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**ALL!** money paid under a contract since the very first day is subject to arbitration. Not just what's in escrow. If the client pays for arbitration and the freelancer refuses, the freelancer's account is suspended.

[tagrendy]

No, freelancer's account is not suspended - know it both from experience and rechecked the TOS just to be sure. Maybe Upwork used to do that but they ask both parties now if they want arbitration, if either of them refuses, it doesn't take place, and money in Escrow gets returned. For the released money the only option client has when freelancer refuses arbitration is to take legal action outside of Upwork. 

[m_terrazas]

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Tatevik G wrote:

[......]

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Is this what you are looking for?

[tagrendy]

Huh, I see. For Escrow disputes you can reject, for full disputes - not. This is really messed up. 

[m_terrazas]

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Tatevik G wrote:

[..........]

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I think you should delete or correct all your claims because the only thing they can do is get OP in trouble, and confuse any other freelancer who is looking for information.

[tagrendy]

My claims are correct, and my information too.

This is from  here https://www.upwork.com/legal#fp.

Upwoek does not force a Freelancer into Arbitration or penalize them for rejecting it, the only outcome is money in Escrow gets returned to the client. 

1. Rejection of Arbitration or non-participation by one party: If one party elects to take the matter to Arbitration and has submitted the Arbitration Payment (“Participating Party”), and the other party rejects Arbitration, fails to submit the Arbitration Payment or does not respond within 5 calendar days of the Notice of Arbitration Demand (“Non-Participating Party”), Freelancer and Client agree that Upwork Escrow is authorized and irrevocably instructed to immediately release the funds in Escrow, if any, to the Participating Party. This will close the Escrow Dispute ticket. To the extent the parties wish to take legal action to enforce their contractual rights, Upwork may provide contact information on file for Client or Freelancer, consistent with Upwork’s Privacy Policy.

[petra_r]

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Amanda L wrote:

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Tatevik G wrote:

Arbitration is only for money in Escrow, released money is yours.

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I am pretty sure you're incorrect. 

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You are right.

[petra_r]

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Tatevik G wrote:

Arbitration is only for money in Escrow, released money is yours. M

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This is completely untrue. Arbitration can be for every single Cent ever paid under a contract, not just what is in escrow.