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r2d3
Community Member

Fixed price contract are a scam ?

Hello,

 

sorry for the catchy title 🙂

 

I have been on oDesk/UpWork for 12+ years and doing mostly hourly contracts. Sometime, I am accepting Fixed Price contracts and 50% of the time there is an issue:

- client's asking for more work to be done before they accept the milestone

- client ending the contract once they know which technique to use, what is the solution for their bug, ...

 

Last week, I started a Fixed Price contract for which I proposed a 2000USD first milestone to solve an issue the client were struggling on for 6 months. The client only escrowed 200USD BUT I made the error to start working and solving the issue in 4 days.

 

Until, the agreed up amount is not escrowed, I only gave some hints on what the problem was and delivered a binary version of the working package to show that I found a solution.

 

This client has 5 stars and I don't understand his fear. Probably he could not trust that I REALLY solved his problem in 4 days as his engineers were stuck for 6 months...

 

I really don't know how to deal with this kind of client ?

 

  1. If I persevere, I will perhaps one day get my money but with a high risk to get a bad review and lose my TopRated badge (even if I could use my Feedback removal).
  2. I could cancel the contract and refund the 200USD, so I suppress the bad review risk

The client is no longer responding : UpWork messenger, Slack channel, LinkedIn.

 

Any advices?

 

Thanks

 

 

 

33 REPLIES 33
bilsim
Community Member

Report the client. Whether you eventually get paid or not, this kind of behavior must be reported, because it's fraudulent.

 

If they escrow just a partial or small amount, you know immediately they are getting ready to cheat or steal your time i.e. money. Don't give anyone hints of solutions in advance. You can set up a paying consultation/hr $ for such hints, make sure to charge them taking risks into account.

What will Upwork do? The OP acknowledged making a mistake to work for that amount. The client may be scum, or maybe they just weren't sure about his guy who can solve a six-month problem immediately but wants 2000 dollars.

 

I don't think you can conclude the client is cheating. If I were a client, with an unknown freelancer, there is no way I would put $2000.00 on the line first thing. The freelancer should have broken the $2000.00 into smaller milestones. This would have benefitted the freelancer and the client. 

yofazza
Community Member

Probably he could not trust that I REALLY solved his problem in 4 days

I don't know what issue the client had, but other than that, they may feel "uncomfortable" paying $2000 for a "quick" solution.

 

I would leave the contract and communication open. Maybe they will respond, or negotiate, etc. But if some time passes without a (good) response, I'll submit the work click the Submit Work for Payment button (which forces the client to respond in 14 days, otherwise...), get the payment, and remove bad feedback.

 

Client can still leave bad private feedback if you refund isn't it? Which you will still need to remove anyway.

Radia L.,

 

Formally submitting the work will only get the $200 in escrow paid.  The rest of the $1,800 agreed price will likely stay in the client's bank account.

 

Just refunding the full amount paid by a client does not remove private negative feedback from that client. Private feedback is far more relevant to a freelancer's JSS calculation than public negative feedback.

 

Private negative client feedback can only be removed by Top Rated freelancers from time to time.

 

 

Yes Will. I did say 'Submit the work' in error, which I edited because I meant 'Click the Submit Work for Payment button' without actually providing the completed work, to get the $200, if there's really nothing more to communicate/negotiate.

 

And I'd do that because refunding does not completely remove the risk of bad private feedback.

This! If you solved a problem in 10 minutes, let it hang there for a week and then tell the problem you spent a few sleepless nights on it, it was really hard, but here is the result. Then you get paid 🙂

vlad-freelancer
Community Member

I used to think that fixed contracts were cool, but after I encountered a dispute (and this happened for the first time), I now understand that hourly wages in this case are more stable and secure.

But, they also make whole lot less money. And are a lot less fun. Less entrepreneural and negotiation factor. Instead of an inventor who needs to build something no one knows how to build for $X, you become just a peasant supposed to diligently toil his field for $X an hour.

When time needed to complete the project is unknown (research, debug, innovative work, ...), the fixed price vs hourly is more who is taking the risk:

 

- fixed-price: freelancer takes the risk as he do not know how much time it will take. Client always get what he wants for the allocated budget.

- hourly: client takes the risk. Freelancer always get paid for the time he works. It is more flexible for the client as it could change the target on the go

 

When the problem to solve is known and there are few unknowns, fixed-price could be interesting

 

 

tlsanders
Community Member

If a freelancer doesn't know how long a project will take, they are not experienced enough to use fixed pricing.

It's pretty easy to not get paid on an hourly job these days.

r2d3
Community Member

How so ?

 

it happens twice to me. Clients had removed their payment method and some time slots did not have enough keyboard activity (I was reading research articles) to pretend to hourly protection plan

tlsanders
Community Member

Look through the threads here. There's a problem with the clicktracker, but instead of investigating Upwork is just denying payment protection. Others have said that Upwork didn't pay them because they were "involved" in the client's fraud, though the only way they were involved was in doing the work. I don't usually do hourly jobs, but if I did take one on now it would be with the understanding that getting paid was a crapshoot.

wlyonsatl
Community Member

Hi, David.

 

Your experience exposes the many weaknesses of fixed price contracts on Upwork, though beginning work before a milestone is fully funded is something you probably won't do again. 

 

Whatever you do, don’t submit the completed work to the client unless he first fully funds the agreed milestone.

 

If you do provide the work under the current circumstances, the client can take your work, pay you no more than $200 and close the project if he decides he no longer needs services from you. Upwork will not be any help trying to get additional payment from the client.

 

Even if you close the contract and refund the $200 in escrow, the client can still leave feedback for you. But if you wait (90 days?) and get no further communication from the client, at some point Upwork will close the contract and refund the escrow.

 

I don’t know whether Upwork would allow a client to leave feedback when Upwork itself closes an idle project with funds in escrow. They shouldn’t, but I’ve seen discussions on this board that indicate feedback is still expected from both client and freelancer when Upwork closes an idle project.

 

If you Google “upwork refund escrow idle contract” you’ll see a number of snippets of information about this issue.

 

Good luck!

 

r2d3
Community Member

I found this advice very interesting : start with small milestones to test the client ability to escrow funds and release payments.

 

But in this particular case of solving a problem / bug, this is quite hard to propose small milestones.

yofazza
Community Member

Preston's "good practices" cannot be applied on all situations (aside from the standard ones such as "wait until it's funded"). Yours is more like Alexander described above, about being "entrepreneural and negotiation" I guess.

 

On another story, I've had a job here from a client who got fed up with her system breaking up when sending 5000+ emails where she was ready to upgrade server, rewrite the mailer code, or any other complex solution (ps: it's not about spamming but merely transactional emails).

 

I took the job, hourly, explained that a 3rd party mailer might be the most efficient solution. She agreed, I modified the mailer a little to use the 3rd party API. It worked, job closed, and I got paid $17 for half an hour of work.

elizabeth_samit
Community Member

I long ago decided to never work under a fixed price contract if the job was not specific (e.g., copy-editing a nonfiction manuscript of 5,000 words). When someone wants to hire me to do something that involves more than one task (e.g., developmental editing + copy-editing) or to solve a problem (such as through performing research to acquire requested information), I let that person know in advance that I am only willing to perform the work under an hourly contract. My hunch is that you are not hearing from the client who - although satisfied with your work - does not wish to pay you the negotiated amount beyond the $200 in escrow. My additional hunch is that it was because you told the client that you solved the problem in a far shorter amount of time than this client expected. If this client responds to your message someday and requests you to do this type of work again, my recommendation is that you agree only if that client is willing to pay you under an hourly contract - or just decline to work again for that client and close this job.

People like OP would lose a huge percentage of their income working that way, since they are selling expertise instead of time.

the-right-writer
Community Member

I have been on oDesk/UpWork for 12+ years and doing mostly hourly contracts. Sometime, I am accepting Fixed Price contracts and 50% of the time there is an issue:

 

If that figure is accurate, you need to stop using fixed price jobs or alter the way you use them. Everyone has to work the way they wish. Some people love hourly, while some love fixed price. I always use fixed price, and I have never been scammed here, or on any platform, or in the physical world. A lot depends on how you use the platform. You admitted you made a mistake. The contract isn't going to prevent that from happening. Now you know from experience to never start work until the job is funded or only do the work that is funded.

 

- client's asking for more work to be done before they accept the milestone

 

This is easily handled in the contract. You set limits in the contract. If the client doesn't want to accept limits, then let them go.

 

- client ending the contract once they know which technique to use, what is the solution for their bug, ...

 

This is another reason for not giving the client all the work. You have to break up the work in the milestones. It is quite possible to let the client know you have a solution without giving them the entire work.

 

The public ratings for clients and freelancers are essentially meaningless. They are window dressing, but don't tell you much about the client. Clients will often give five stars to someone, and then provide completely different private feedback.

 

I suggest you look at why the jobs were failures at fixed price. Giving the client the solution is not going to change if you use hourly. Determine if there are other issues that are impacting you, before you proceed. Then try hourly, after you have read all the rules. It's critical you have the correct amount of keystrokes, mouse movements, and detailed memos. Even then, it's possible to be scammed. You must learn about vetting the client and the job, no matter how the payment is established.

 

I agree with Radia; leave it alone for now.

r2d3
Community Member

So, the client finally added an intermediate milestone, escrowed it and accepted it ... all at the same time.

 

And still don't escrow fund for the last milestone.

 

I have the impression that he does not understand the principle of escrowing. 

It's possible the client doesn't understand the process. Upwork does a poor job of explaining to new clients, especially if I have walked clients through the process more than a few times. I would send a polite message, outlining the process, and making relevant suggestions about breaking down the job. It could easily be they are not comfortable with some guy they never met, and putting $2000. on the line.

 

The milestones don't all need to be funded in advance. If you are trying to do that, it might be scaring the client. The only thing that matters is the current milestone and funding. I will often break large jobs into smaller sections, and make sure the funding is there, but not for the entire job. Clients don't necessarily want to commit money into the future on a complete unknown.

They were the one proposing 2500USD because this issue was blocking their business.

Not all milestone need to be funded but at least the one, you are supposed to work on.

We finally agreed on milestones but for the part already done.

i will not start working on the final solution until the final milestone has fund in escrow.

i will not start working on the final solution until the final milestone has fund in escrow.

 

That is your decision.

How do you decide to start working on a fixed-price contract if you never worked with a particular client?

 

With client I know well, I have no problem starting working right away after goals have been defined. Sometime, they do not have time to take care of the admin (accepting the milestone description, escrowing fund, ...)

 

But with client we do not know. Deciding to work on a non-escrowed milestone is kind of risky ?

 

If you finish the work for the non-escrowed milestone, you submit your work, what will happen ? With escrowed milestone, the client could accept, negotiate or file a dispute. And if no action is taken in 14 days, you get your money.

wlyonsatl
Community Member

Working on a non-escrowed milestone is not just kind of risky; it's one of the biggest risks freelancers can take working with any client (but especially new ones).

 

Upwork will make no effort to get a client to pay for work submitted by a freelancer on a milestone that is not funded in escrow. Of course, honest clients will likely pay - eventually. But dishonest/fraudulent clients are not unknown on Upwork.

In my experience, especially among new clients, there are many more of them who don't understand how platform works than fraudlent ones.

But does it really matter, Alexander N., why clients refuse to fund milestones properly? Should a freelancer unnecessarily gamble (s)he can get any new or clueless client to follow Upwork's rules and procedures, even after the work is completed without escrow funding in place?

 

Fraudulent or not, working on unfunded milestones for any client is an unnecessarily dangerous way for a freelancer to work on a fixed price project.

I would say, don't do that because it puts you at a disadvantage because it's a violation of Upwork ToS, that explicitly prohibits you from "working for free". So in any potential investigation your position will be weak as you might be punished for that violation.

But in general, seeing work on Upwork (and work in general!) as sort of a gamble is OK. It's fine to take risks.

7ba56d1a
Community Member

It's standard for Voice Artists to work on a fixed price basis that's mostly determined by length of the audio, where/how it will be used. Upwork's the only place so far I've found where cleints can opt for hourly, and it makes no sense.

 

I've never had a problem getting milestones funded or being paid here, and I start working once funds are in escrow. 

This information is useful for everyone. First, you need to understand the process for hiring from both sides. Not only will this help you understand the process, but then you can assist your client. I have found approximately half of my clients need extensive help figuring out how to hire and set up milestones, payments, and the entire process.

 

Then you become adept at vetting clients and jobs. This doesn't take official courses or training. Much of it is common sense. Read this advice and memorize it. It is excellent advice on scams from Wes.

 

A few things to look for -

 

* Extremely vague language in the description. A popular scam is, "I need a writter" or sometimes they spell it correctly. However, the scammers know you will learn, so they have started adding more words, but the scam is the same.

 

* Extremely high fees for not much work. No, no one is special and going to earn from doing nothing.

 

* Anytime they want you off of Upwork before an Upwork contract is in place.

 

* Any job where they want you to rewrite words from one source to another, such as, "type words from PDF to Word." Why would anyone need to type words when we all have devices to do that in 3 minutes?

 

But with client we do not know. Deciding to work on a non-escrowed milestone is kind of risky ?

 

No, it is unacceptable! It is no different from handing a random stranger on the street your work and hoping they will give you money.

 

If you are using fixed price, it's crucial to have an official Upwork contract with funded milestone(s). How many milestones, how they are funded, is all up to you and the client. The critical component is that you do not start work until the current milestone is funded, and you only do the work for the funded milestone.

 

If you finish the work for the non-escrowed milestone, you submit your work, what will happen ?

 

You will give the client free work and will not get paid. Upwork can't do anything about it, because you weren't following the rules.

 

With escrowed milestone, the client could accept, negotiate or file a dispute. And if no action is taken in 14 days, you get your money.

 

Any client using any method can file a dispute. If the client files a dispute, you don't get your money in 14 days, because you are in a dispute, and there is also arbitration. Upwork does not make decisions for you, but they try to get the parties to work together for a solution. If that is not satisfactory, then arbitration is the next step. A scammer or crappy client won't be deterred by any payment method.

 

Communication is crucial in freelancing, especially remotely. Have everything you can think of pertaining to the completion of the job in the contract. Ask questions, have video chats, and make sure every aspect is covered.

>Why would anyone need to type words when we all have devices to do that in 3 minutes?

By the way, i can think of at least one 100% legit reason of why someone will want to do that. People routinely do it every day without any scam involved.

Whenever you see a typing job on Upwork, from one form to another, it is always a scam.

 

Why would it be necessary to type the same words from one document to another?

bilsim
Community Member


David G wrote:

They were the one proposing 2500USD because this issue was blocking their business.

Not all milestone need to be funded but at least the one, you are supposed to work on.

We finally agreed on milestones but for the part already done.

i will not start working on the final solution until the final milestone has fund in escrow.


Good decision. 

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