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Economic theory: Beware of the long-term contracts (Financial transactions)

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Active Member
Dharmesh P Member Since: Apr 26, 2016
1 of 12

So, recently Upwork limited my financial transactions because after the project is completed they thought that they need to verify my client's account. Now, unless the client verifies Upwork will revert the money and I will lose my money. Well, I am fine with taking a shot but logically the mechanism is inherently flawed. Think again.

 

As a rational thinker, a client should not provide any documents required for verification because he already got the work with him. So, he has an incentive of not providing any documents because he will also get his money back even though it's already paid. So, basically, he got the service for free. Upwork, who tries to act like a daddy here, believes that if freelancer approaches client then they can force clients to provide verification documents. In my case client is not ready to provide bank account and passport details because he had some bad experiences with some websites. But if the client is not a good person and does not want to pay the freelancers then this is an ideal mechanism to get the work done for free. So all those freelancers who looks for the long-term contract, please think again because devil here will not be taking care of us they are just busy minting money for themselves. 

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Community Guru
Tiffany S Member Since: Jan 15, 2016
2 of 12

You seem to be assuming that a "rational thinker" does not believe in paying for value and is incapable of long-term thinking. That's an unfortunate perspective.

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Dharmesh P Member Since: Apr 26, 2016
3 of 12

Yes, you're right. I am assuming client does not want to pay and it can be a strategic way for him not to pay. 

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Community Guru
John K Member Since: Feb 17, 2015
4 of 12

Dharmesh,

 

Your argument is plausible, but bear in mind that Upwork gains nothing by reverting the money to the client and thus would rationally do all it can to ensure that you get paid in order to collect its 10% fee.

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"No good deed goes unpunished." -- Clare Boothe Luce
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Active Member
Dharmesh P Member Since: Apr 26, 2016
5 of 12

Yes, John. You are as well absolutely correct but in this instance the verification can't be done from their side unless the client cooperate as in my case. 

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John K Member Since: Feb 17, 2015
6 of 12

I assume there's something like a ticket related to this contract, and so moderators may intervene at any time and expunge any details you might provide, so I'll just talk hypothetically. A client might start out with a verified payment method, and the freelancer does the work accordingly, but on or before the time when the freelancer requests approval, or the review period for an hourly job ends, the client no longer has a verified payment method. Since I was hypothesizing, the particulars of your case might be different, but the scenario I outlined does seem to be a loophole clients can exploit to avoid payment.

__________________________________________________
"No good deed goes unpunished." -- Clare Boothe Luce
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Community Guru
Tonya P Member Since: Nov 26, 2015
7 of 12

I believe others have posted about this very same scenario. IMO, Upwork does not always choose to employ logic when creating policy.

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Petra R Member Since: Aug 3, 2011
8 of 12

1) You don't seem to HAVE a long term ongoing contract, or at least not one where any money has been paid...

 

2) What is your idea of "long term?"

 

3) Hourly long term contracts are perfectly safe if you track your hours properly, because no matter what happens with the client, you get paid under the guarantee

 

4) Fixed price long term contracts are pretty safe provided you arrange for smallish milestones, so in the very rare event that something goes wrong you risk just one small milestone

 

5) The money does not get reversed back to the client, it gets reversed back to the true owner of the payment method. This in cases where a client flat out refuses to co-operate, is generally not the "client" but someone whose credit-card the client is using without permission or whose PayPal account they've taken over......

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Dharmesh P Member Since: Apr 26, 2016
9 of 12

Petra,

I am just saying it in general, I am not worried about my project. Also, my idea of long term is subjective as depending on the money it varies for individuals but I am not a full-time freelancer so I do not go for long term projects but I am just saying it to those who actively seeks long-term projects.

Also, it is irrespective of the milestone, as they refund money for all of the milestone. As in the case of true owner, how can you verify whether its true owner or not? Only client can. So even if he is the true owner he may not want to verify and that's the point I am trying to make. If he does not verify the payment, it gets reversed for all of the milestones from your account.

Well, its good to know that we are protected in the hourly contract but I will never be 100% sure in any case unless I have it in hard cash with me. 

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Community Guru
Petra R Member Since: Aug 3, 2011
10 of 12

@Dharmesh P wrote:


1) I am just saying it in general, I am not worried about my project. Also, my idea of long term is subjective as depending on the money it varies for individuals but I am not a full-time freelancer so I do not go for long term projects but I am just saying it to those who actively seeks long-term projects.

2) Also, it is irrespective of the milestone, as they refund money for all of the milestone.


 1) What ARE you talking about? So you deliberately wrote a completely misleading post? You don't have, and never had any long term contracts, but thought you could write a scare-mongering post based on figments of your imagination just because you had nothing better to do?

 

2) Nonsense! Once withdrawn money  can not be reversed.

 

Fact is: Long term contracts are FAR safer than one offs simply because the clients have a history and are generally invested in making things work out. The scenario you describe is virtually unheard of with long term, established clients.

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