Fixed-Price contract hold

[#1]

This thread has been closed.

[#2]

It's a problem occurred on the client's side, and yes, it's mostly because of billing method issues. This happened to me too, you should just wait. Don't do any work and don't submit any milestones. Just wait. You'll get a notification if the problem is solved.

[#3]

Thread has been closed.

[#4]

The money in escrow is your client's money that Upwork holds. It's not your money, and you're not responsible for doing anything now. The money in escrow will only become your money if the client approves your work.

[#5]

This answer did not pertain to the question. Thread has been closed.

[#6]

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Haley H wrote:

I'm a freelancer, and I just received notification that one of my contracts was put on hold. Browsing the Community articles tells me the issue might be due to client billing method issues, but I am confused, as I thought that the funds were already secured in an escrow account for a fixed-price contract. Is this not the case? Would it be possible to have someone from the Upwork team tell me if this is or is not the cause of that hold? Thank you!

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Was the client's payment method verified? You get an email if it isn't. I also think there is some notification where you accept the contract but it's been a very long time since I've done this.

Unfortunately, there might be fraudulent activity detected or something like that, so there isn't much you can do until Upwork clears the hold. Don't work on the contract, and also (for future reference) don't work on a milestone where the payment method is not verified.

[#7]

Thread has been closed.

[#8]

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Haley H wrote:

The client's payment method is verified. The milestone was also already funded into escrow, and he has released payment to me. It was during the processing period of the payment--I'm at 2 days since the payment was approved by the client--in which I received the notification from Upwork about the hold.

So, due to the fixed-price protection, logic tells me that this escrow account should already have had the payment in it at the time of release to me in order to process it. That's why I'm so confused that there is a hold at all, and I'm not 100% certain that it's a billing issue. 

Also, for the record, I am not doing anything on the contract now that Upwork told me to stop, of course. I was already planning on complying with that recommendation as soon as the hold was in effect.

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Is the money in your Pending section of the report? During a chargeback or dispute, Upwork removes the money from your income, so you would know if it happened. If it's not gone, you might still be ok unless there was a chargeback. I've had old old escrow contracts go into a hold, but I had already gotten paid.

There is really no payment protection with escrow. The only thing you know is that there was money on some card. Any fraudulent charges would be deducted from your account. That's why I prefer hourly and its payment protection. There truly is payment protection with hourly provided you follow the tracker rules.

[#9]

Thread has been closed.

[#10 · Accepted solution]

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Haley H wrote:

The payment does still show in my transactions as "pending." So I guess that's a relief, if what you've said is true. However, that does make me wonder what else the problem could be. I'm not sure if I should ask the client about it or not.

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The contract hold means that there is an issue with your client's account. It does not necessarily have to affect your pending payment, and most likely won't. Unless those "pending" funds suddenly vanish, don't worry about it. The hold on the client's account can have any number of reasons.

The only time this could be an issue would be if there was a serious issue regarding the client's payment method, and you really won't know that until the funds move to "available!"

I'd not worry about it too much at this stage, chances are it'll be fine. In the unlikely case that it is not, come back and tell us.

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Haley H wrote:

Also, are you saying that the description of the escrow protection guarantee that I click "Yes, I understand" on every time I accept a fixed-price contract is just a lie? I don't have the luxury of only accepting hourly projects, and most of my clients prefer fixed-price for the type of work I do.

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There is no "escrow guarantee" as such. There is a degree of protection, which works in almost all cases just fine.

There is always a degree of risk, such as a dispute or chargeback or an outright fraudulent client, but such cases are very, very rare.

[#11]

Thread has been closed.

[#12]

Hi, Haley.

It is helpful to know how Upwork applies its general rules in specific cases, so please come back to this thread and let us know how this situation worked out for you.

Thanks.

[#13]

Hi, Haley.

It looks like my post shut down all opinions and anecdotes over the past week regarding Upwork's fixed price payment guaranty.

Please come back to this board and let us know how this particular problem was resolved for you.

Thanks,

Will

[#14]

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Will L wrote:

regarding Upwork's fixed price payment guaranty....

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There is no such thing.

Chances are Haley was paid as normal, as the funds were already in Pending on New Year's Eve, and the client had resolved the situation that put their account on hold, or the hold had nothing whatsoever to do with the fixed rate contract with Haley. 

Give it a rest.

[#15]

Hi, Haley.

How did this problem get resolved for you?

[#16]

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Will L wrote:

Hi, Haley.

How did this problem get resolved for you?

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There wasn't a problem.

The client hired her, the money was in Escrow, she submitted the work, the client released the funds.

The contract was put on hold which happens all the time but the milestone was approved and the funds had already been released to her at that point anyway (they were in Pending)

She was subsequently paid and closed the contract.

[#17]

A few posts have been removed from this thread as they were in violation of Community Guidelines.

Please, refrain from posting personal attacks and accusations of misconduct. We expect members of the Community to remain professional when talking to each other even if they disagree.

Thank you!

[#18]

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Haley H wrote:

The payment does still show in my transactions as "pending." So I guess that's a relief, if what you've said is true. However, that does make me wonder what else the problem could be. I'm not sure if I should ask the client about it or not.

Also, are you saying that the description of the escrow protection guarantee that I click "Yes, I understand" on every time I accept a fixed-price contract is just a lie? I don't have the luxury of only accepting hourly projects, and most of my clients prefer fixed-price for the type of work I do.

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The reason you get that pop-up and have to click "yes I understand" is to verify that you are aware of the weaknesses in fixed price protection.

[#19]

Haley,

A discussion of the true meaning of Upwork's escrowed payments guarantee got shut down by Upwork yesterday because it got "off topic."

https://community.upwork.com/t5/Freelancers/Won-the-award-from-AAA-and-still-did-not-receive-that-aw...

Unlike other posters here, I think Upwork’s guarantee of payment to freelancers is not entirely dependent on Upwork getting paid by a client. Even if a client doesn’t pay Upwork, I believe Upwork will pay a freelancer who has conformed to Upwork’s protocols, such as formally submitting work via a project’s “Submit” button.

In a recent filing with the US government…

https://www.sec.gov/ix?doc=/Archives/edgar/data/1627475/000162828019013517/upwk-20190930.htm

…Upwork stated:

“…we may be subject to additional risk if clients fail to pay freelancers for services rendered, as freelancers may seek to hold us responsible for the clients’ conduct and may lose confidence in our platform, may decrease or cease use of our platform, or seek to obtain damages and costs” (Page 58)

As well as:

“…in certain instances, we will advance payment on a freelancer invoice if the client issues a chargeback or their payment method is declined and the freelancer assigns us the right to recover any funds from the client. From time to time, clients fail to pay for these services rendered by a freelancer, and as a result, we may be adversely affected both from the inability to collect amounts due and the cost of enforcing the applicable agreement or our terms of service, including through arbitration or litigation." (Page 78)

I take Upwork’s payment guarantees seriously. Clearly, Upwork does the same and occasionally incurs losses as a result. It’s a significant cost of doing business.

One thing I think all fixed price freelancers should do when possible is break up their milestones into relatively small multiple milestone values rather than one large milestone. If a client doesn’t pay for Milestone 1, then the freelancer knows that further work for the client is a bad idea (and losing that payment, if it comes to that, is an acceptable risk compared to losing all with only one large milestone). If the client does pay Milestones 1 thru 3 without protest and then says after they receive the final work for Milestone 4 that the entire work is unacceptable and they demand a refund of all payments to the freelancer, both Upwork Mediation and an arbitrator will take a jaundiced view of the client’s bogus claim of completely unacceptable work by the freelancer.

Good luck.