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anthonytroli
Community Member

Have you worked with a fraudulent client?

Hello all, 

 

Have you ever had something like this happen to you on UpWork?

 

I recently completed a job for $550. After the contract ended, I was contacted by UpWork support who let me know that my employer had a fraudulent account. The funds were reversed and I made $0 despite all of my hard work. Naturally, I was very confused by this. The client's profile clearly stated that his payment method was verified, but this couldn't be further from the truth. UpWork's responsibility is to connect freelancers with clients, and then protect both parties. How could UpWork verify the client's payment method only to tell me later that this was fraudulent?

 

Obviously, these things happen. But when I asked UpWork if there was anything they could do, they responded:  **Edited for Community Guidelines** I suggested that UpWork pays me $550 to make up for my losses, but they declined. They simply folded their hands and said there is nothing they could do.

 

UpWork is a huge company. There is definitely something they could do. For example, they could have said "Sorry for the inconvenience. We won't take our percentage out of your next few contracts until the $550 is paid back."  Instead, they did nothing.

 

Has something similar ever happened to you? I already spoke to a lawyer about this. She made it very clear that if I have been treated like this by UpWork, there are many others who have as well. 

 

31 REPLIES 31
prestonhunter
Community Member

re: โ€œI recently completed a job for $550.โ€

 

What was the job? (Briefly explain the work you did, using one sentence.)

A client asked that I edit an explainer video about how his company worked. He even sent me a completed script. It was a quick turnaround, but it seemed like a simple enough job. I pulled an all nighter and got the job done. Here is the final video: **Edited for Community Guidelines**

versailles
Community Member

If someone uses a bank card to pay for a product or a service online and if the bank card is subsequently reported as stolen (for instance), the bank that issued the card may revert the payment from the person or the company to which the money was sent. This is commonly referred to as a chargeback.

 

When that happens to Upwork, they, in turn, remove that amount of money from the freelancer's account. On fixed price jobs, they don't offer payment protection and they show you a pop up each time you apply to or accept a fixed price job, so you know in advance.

 

Chargebacks represent a significant burden for all the websites and sellers who operate online, especially in the US. Unfortunately, there is little remedy to this.

 

Neither Upwork or another company can insure someone against chargebacks because in this case the fraudsters would be sitting on both side of the operation and collect the insurance money while pulling chargebacks from the payer's side.

 

I suggest working on hourly contracts that are protected under certain conditions.

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"Where darkness shines like dazzling light"   โ€”William Ashbless

Thank you for your reply, Rene. I appreciate the thought that went into it, and I understand everything that you are saying. Here is my hang up:

 

The reason freelancers such as myself enjoy working with UpWork is knowing that we are protected. UpWork takes a huge percentage of my paychecks, and personally, I don't mind. UpWork provides a service which is to connect me with clients and ensure my security.  However, my security does not feel like a priority when things like this happen. $550 is not that much money. But what if it were $5,000? Or $10,000? 

 

My point is: UpWork needs to have a stronger vetting system for their clients. If not, they could at least have some sort of protection or insurance to help their freelancers who are taken advantage of by fraudulent users.


Anthony T wrote:

 

The reason freelancers such as myself enjoy working with UpWork is knowing that we are protected.


They are not protected for fixed prices jobs and Upwork clearly reminds you each time you accept such a contract. You are protected when working on hourlies if you abide by the terms.

 

I know someone who is a subcontractor on the local construction market. He has $30K of unpaid bills every year. Some people in his field, in this area, simply don't pay their contractors.

 

Online shops have to deal with chargebacks. 

 

It sucks.

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"Where darkness shines like dazzling light"   โ€”William Ashbless

I hear what you are saying. Any transaction that anybody makes online could be fraudulent. I am not disputing that. But I had no other reason to believe that this person would be a fraud. Their payment method was verified by UpWork. That's where the frustration kicks in. 

 

I am merely suggesting that UpWork must vet their clients and ensure that these people are exactly who they claim to be before they are able to hire freelancers, and especially before they are able to list "Payment Method Verified" on their account. To me, that doesn't seem like a huge ask and would ensure things like this do not happen again. 


Anthony T wrote:

I hear what you are saying. Any transaction that anybody makes online could be fraudulent. I am not disputing that. But I had no other reason to believe that this person would be a fraud. Their payment method was verified by UpWork. That's where the frustration kicks in. 

 

I am merely suggesting that UpWork must vet their clients and ensure that these people are exactly who they claim to be before they are able to hire freelancers, and especially before they are able to list "Payment Method Verified" on their account. To me, that doesn't seem like a huge ask and would ensure things like this do not happen again. 


You have lost 550 bucks and understandably, your emotions are kicking in. Upwork has a cold approach to this. They have certainly taken the following facts in consideration:

 

1) From Upwork's quarterly reports we know that fraud is important, but also a small fraction of all the activity. Actually the overwhelming majority of contracts are not impacted by any kind of fraud.

 

2) People don't feel giving any kind of identity documents to random websites they register to. Since there are lots of B2B platforms out there, potential clients would just click away if they were asked to provide any kind of proof of identity to a website they just discovered. You may find convenient due to the current situation to believe otherwise, but the reality of the Internet is that most potential new clients would just go somewhere else.

 

3) The huge majority of clients are honest.

 

4) A certain amount of fraud will happen.

 

As a consequence they have decided not to ask for any kind of proof of identity to new clients and to put a notice in front of the freelancers who decide to bill fixed prices, reading that they won't be insured so they decide by themselves if it's worth the risk.

 

That's how it is.

-----------
"Where darkness shines like dazzling light"   โ€”William Ashbless


Rene K wrote:

2) People don't feel giving any kind of identity documents to random websites they register to. Since there are lots of B2B platforms out there, potential clients would just click away if they were asked to provide any kind of proof of identity to a website they just discovered. You may find convenient due to the current situation to believe otherwise, but the reality of the Internet is that most potential new clients would just go somewhere else.

 

3) The huge majority of clients are honest.

 

4) A certain amount of fraud will happen.

 

 


Yes. I know it's really awful for Anthony to be cheated out of $550 for his hard work, but I think he would lose more than that in the long run if Upwork brought in a system of vetting clients. It's not just fraudsters who would stop using the site (in fact many of them would get around the vetting system with false ID anyway), but thousands of honest clients too.


 

I agree with what you are saying here. A huge majority of UpWork clients are honest. The few people I have worked with have been really awesome. As I mentioned in another reply, I do want to continue working on UpWork. Outside of this, my experience has actually been really great. 

 

I understand why UpWork operates the way that it does. They need clients to sign up for the service because clients are the ones who are providing the money. Without them, there are no jobs for freelancers such as myself. It makes sense as to why they would make it very easy for them to get started. From a business standpoint, it makes complete sense. 

 

However, I would hope that in the future UpWork puts systems in place to protect freelancers better. I would hope that "payment method verified" would mean exactly that. 

 

Thank you for the thoughts everybody. 

Rene,

 

We have no idea how large is the fraud represented by clients not paying freelancers for fixed price projects.

 

Upwork doesn't lose money if the client doesn't pay Upwork and Upwork doesn't pay the freelancer, so there is no reason to think Upwork's reported losses to "fraud" in its public filings include a significant contribution from the fixed price side of the business.


Anthony T wrote:

....Their payment method was verified by UpWork.... 

 

I am merely suggesting that UpWork must vet their clients and ensure that these people are exactly who they claim to be before they are able to hire freelancers, and especially before they are able to list "Payment Method Verified" on their account. To me, that doesn't seem like a huge ask and would ensure things like this do not happen again. 


That's simply not what "payment method verified" means. As Petra has explained in greater detail, It means the same thing on Upwork it means anywhere that a site wants to establish access to a funding account: the credentials provided by the customer enable access to the funding method. In other words, Upwork is following standard industry practice.

Is it important to "verify" payment in that way? Well, yes, and we should check to make sure it's done before starting work, because not doing so opens another can of vulnerability. Unfortunately, we cannot take it as "verification" of a client's good faith or integrity. It is literally the "method" that is verified, not the person presenting it.


Rene K wrote:

 

Online shops have to deal with chargebacks. 

 

 


Chargebacks are definitely a problem for all merchants. The one very significant difference when using Upwork is that the freelancer has no opportunity to fight the chargeback. I've heard some say that Upwork attempts to dispute them and maybe it does, but I've never seen a freelancer say a chargeback was successfully disputed on their behalf, and it would be quite difficult for Upwork to dispute effectively compared with the person who actually provided the services. 

 

In the case of a chargeback, it seems, the freelancer is worse off using Upwork than not, because if they had simply accepted a credit card payment directly, they would have the opportunity to fight the chargeback.


Tiffany S wrote:

I've heard some say that Upwork attempts to dispute them and maybe it does, but I've never seen a freelancer say a chargeback was successfully disputed on their behalf, and it would be quite difficult for Upwork to dispute effectively compared with the person who actually provided the services. 

Current FEATCON replied on a recent thread about this same subject that it took a few weeks but Upwork did win against a chargeback on her behalf. So it seems they must be doing something. 


Tiffany S wrote: I've heard some say that Upwork attempts to dispute them and maybe it does, but I've never seen a freelancer say a chargeback was successfully disputed on their behalf

There are many, in fact I saw one just this week. There was also the huge case (Several Thousands of Dollars) where the client pulled a charge-back after the freelancer won arbitration. That was eventually successfully defended.

 

Thing is, chargebacks are hard to defend, especially "unauthorised use" ones. If a payment method was stolen or hacked, there is no "defending it".


Tiffany S wrote:

Rene K wrote:

 

Online shops have to deal with chargebacks. 

 

 


Chargebacks are definitely a problem for all merchants. The one very significant difference when using Upwork is that the freelancer has no opportunity to fight the chargeback. I've heard some say that Upwork attempts to dispute them and maybe it does, but I've never seen a freelancer say a chargeback was successfully disputed on their behalf, and it would be quite difficult for Upwork to dispute effectively compared with the person who actually provided the services. 

 

In the case of a chargeback, it seems, the freelancer is worse off using Upwork than not, because if they had simply accepted a credit card payment directly, they would have the opportunity to fight the chargeback.


Here you have one.

Lisa.png

https://community.upwork.com/t5/Freelancers/Facing-a-huge-problem-due-to-chargeback/m-p/974840#M6108...

 

ETA - Amanda beat me to it ๐Ÿ™‚

I don't know much about the client side so here's my question.  Does/ can Upwork, when "verifying" a client, send and return a small amount ($1) to the client's payment method much like they do when verifying a freelancer's payment method?

 

I know even less about banking so not sure if a fraudulent client could hire and issue a chargeback before the payment confirmation went through.

 

Does this make sense?  (It is Sunday morning and we changed time last night so I'm a little foggy)

 


Mary W wrote:

I don't know much about the client side so here's my question.  Does/ can Upwork, when "verifying" a client, send and return a small amount ($1) to the client's payment method much like they do when verifying a freelancer's payment method?


They do that. 2 small amounts adding up to $10 are charged to the card and the client has to confirm those two amounts, which is theoretically only possible for a person with access to the account (rather than "just" the card). That's what "payment method verified" means. But that ONLY verifies that the card can be charged $10 at that particular moment in time and that the person in question has access to the statement. It does not prove beyond all doubt that the person is the rightful owner, that the account isn't hacked for example, or used fraudulently, and doesn't prove that the person is honest, or that another amount will be able to be successfully charged at some later point in time. Just because Upwork can c charge $10 at 3pm on Monday, does not mean they'll be able to charge $1000 on Tuesday, or $45 on Friday, or even $1 at 4.10pm on Monday.

 

Thanks, Petra.  I guess I probably knew that sometime in the past.  LOL


Anthony T wrote:

 

My point is: UpWork needs to have a stronger vetting system for their clients. If not, they could at least have some sort of protection or insurance to help their freelancers who are taken advantage of by fraudulent users.


But, as Renรฉ said, the fraudsters would work on both sides of the operation in that event, one posing as a freelancer and the other as a client. They'd agree to a fake contract at inflated rates, claim the payment was disallowed, and then split the compensation between them.

 

I saw a complaint posted here a few months ago by a "freelancer" who was obviously a fraudster, demanding immediate compensation for a "job" that was paid at about 20 times her normal rate.

martina_plaschka
Community Member


Anthony T wrote:

Hello all, 

 

Have you ever had something like this happen to you on UpWork?

 

I recently completed a job for $550. After the contract ended, I was contacted by UpWork support who let me know that my employer had a fraudulent account. The funds were reversed and I made $0 despite all of my hard work. Naturally, I was very confused by this. The client's profile clearly stated that his payment method was verified, but this couldn't be further from the truth. UpWork's responsibility is to connect freelancers with clients, and then protect both parties. How could UpWork verify the client's payment method only to tell me later that this was fraudulent?

 

Obviously, these things happen. But when I asked UpWork if there was anything they could do, they responded:  **Edited for Community Guidelines** I suggested that UpWork pays me $550 to make up for my losses, but they declined. They simply folded their hands and said there is nothing they could do.

 

UpWork is a huge company. There is definitely something they could do. For example, they could have said "Sorry for the inconvenience. We won't take our percentage out of your next few contracts until the $550 is paid back."  Instead, they did nothing.

 

Has something similar ever happened to you? I already spoke to a lawyer about this. She made it very clear that if I have been treated like this by UpWork, there are many others who have as well. 

 


Your lawyer is right. I hope her advice extended beyond that platitude. 

So, got that out of the way. 

Yes, there have been a number of similar accounts from freelancers recently, you can find the threads in this forum. Many of those instances involved buying cryptocurrency, the freelancers involved in this lost their own money. So at least you didn't do that. 

How do you protect yourself from fraudulent clients? Start with small jobs, don't be pressured into urgent work, use hourly contracts, vet your client thoroughly. 

Hey Martina,

 

Thank you for reaching out. I'm glad I only lost $550 and not anything more, but still, these things should not happen. My lawyer is looking into it. If many people are also experiencing this, I am sure she has a case.

 

I appreciate the advice, but I ask that you please not victim blame in this situation. Yes, I will be more careful with the clients that I work with in the future. But let's keep in mind that UpWork is supposed to ensure a safe working environment for everybody on their website. It's a huge letdown knowing that they have no system in place for freelancers who are burned by fraudulent clients. They need a stronger vetting system in place, and some sort of insurance policy for freelancers who are taken advantage of. 


Anthony T wrote:

Hey Martina,

 

Thank you for reaching out. I'm glad I only lost $550 and not anything more, but still, these things should not happen. My lawyer is looking into it. If many people are also experiencing this, I am sure she has a case.

It's probably a frivolous case because Upwork does not promise to protect escrow payments the way you are suggesting. How much are you paying your lawyer hourly to "look into" a loss of $550? 

 

The problem is you are expecting Upwork to do something it doesn't do nor does it say it does, and in fact, explicitly says it does not (protect escrow payments). 


Anthony T wrote:

Hey Martina,

 

Thank you for reaching out. I'm glad I only lost $550 and not anything more, but still, these things should not happen. My lawyer is looking into it. If many people are also experiencing this, I am sure she has a case.

 

I appreciate the advice, but I ask that you please not victim blame in this situation. Yes, I will be more careful with the clients that I work with in the future. But let's keep in mind that UpWork is supposed to ensure a safe working environment for everybody on their website. It's a huge letdown knowing that they have no system in place for freelancers who are burned by fraudulent clients. They need a stronger vetting system in place, and some sort of insurance policy for freelancers who are taken advantage of. 


They do take the hit when it's about hourly contracts. Since you have documentation on the work you did, you will get paid. Not so on fixed price contracts. Would they cover every fraudulent transaction, they would be out of business in a few days. 

Lastly, to my knowledge, there is no vetting process for clients. So I don't know what you mean by stronger vetting process.

roberty1y
Community Member

You were unlucky, as there don't seem to have been any red flags before you took the job. Normally, fraud happens when the freelancer is being interviewed for a (non-existent) job and is asked to contact the "client" outside of Upwork. Scammers rarely get to the point of signing a contract.

 

To prevent the type of fraud that happened to you, Upwork would have to require clients to produce identification to make sure they're the owners of whatever payment method they're using (the person who defrauded you was most likely using a credit card or payment method that didn't belong to them).

 

To verify the identity of every client would slow down the process of hiring someone to an enormous extent. As things stand, a client can post a job and have someone hired and working on it within five minutes.

 

In the long run, freelancers would lose out more if every prospective client had to be vetted, as opposed to the present system where they are occasionally defrauded. 

Hey Robert, 

 

I appreciate the thoughts. In response to your second paragraph, UpWork absolutely should require clients to produce identification to make sure they're the owners of their payment method. That's what "payment method verified" means. Yes, this might slow down the process, but that's what it takes to ensure the security of everybody on this website.

 

After reading the responses, I am clearly not the first person this has happened to nor will I be the last unless UpWork makes some significant changes to their vetting process. 

It happens over and over again, and it's always a bitter surprise because Upwork doesn't acknowledge these potential pitfalls, doesn't make any effort to explain the limits or reasons for their failure/inability to contain client-committed fraud, and doesn't bother to educate freelancers on ways to protect themselves, such as the simple act of copyrighting your work, to be released upon real funds being paid to Upwork.

In short, Upwork doesn't do much to protect freelancers, or to help us protect ourselves. Why would it be so hard to produce a frank video and require that each new freelancer watch it and acknowledge it key points? They just don't seem to care, beyond slogans and smiling executive messages. 

wlyonsatl
Community Member

Sorry to hear about your experience, Anthony.

 

Upwork is careful to present itself as a platform that serves as an independent, arm's length conduit for clients and freelancers to transact business, promising neither the quality of work from the freelancer nor payment by the client (though, as mentioned here by others, there is more payment protection by Upwork for hourly projects than for fixed price projects).

 

One way this sort of fraud could be reduced, if not avoided, would be for Upwork to require clients to fund escrow with wire transfers or other means that ensure Upwork has what bankers call "good funds" before the freelancer begins work, but that is not a perfect solution. The primary objection is probably that many honest clients new to Upwork would not be willing to pay upfront by means other than a credit card.

 

Upwork providing more information about clients and their history (or lack thereof) on the platform might also be useful to freelancers in respect to vetting clients, but that is not on the cards, more than likely. 

 

I have worked on about 350 projects on Upwork and have rarely run into dishonest clients. I expect you'll find the same if you stick around, but there really is little in the way of payment protection on fixed price projects.

 

Good luck!

 

 

 

 

Thank you for the response, Will.

 

The truth is that I do love working on UpWork, but it's incredibly disappointing that the site does not protect me when instances of fraud occur. It is their responsibility to vet their clients before they allow them to join the marketplace. Security is supposed to be one of the benefits of working on UpWork. That's why I don't mind that they take a huge percentage of every paycheck that I earn. However, it is very apparent from my experience and others' that security is not as big of a priority as they claim it to be.


Anthony T wrote:

Thank you for the response, Will.

 

The truth is that I do love working on UpWork, but it's incredibly disappointing that the site does not protect me when instances of fraud occur. It is their responsibility to vet their clients before they allow them to join the marketplace. Security is supposed to be one of the benefits of working on UpWork. That's why I don't mind that they take a huge percentage of every paycheck that I earn. However, it is very apparent from my experience and others' that security is not as big of a priority as they claim it to be.


It's not though. They don't promise that. Show me in their marketing where it says they vet all the clients you don't have to? Again, you are thinking Upwork does things that it does not, and so you are operating out of a false premise. If you can understand that Upwork has no intention of vetting clients, you can begin to learn how to set up your own vetting processes and questions within your interview process before you take on clients, which is far better protection than anything Upwork does.

davidsonjoshua
Community Member

Sorry to hear about your problem. It seems to happen continuously on Upwork, and their policy is essentially "too bad." All of Upwork's representations of supporting freelancers are riddled with loopholes and excuses. "Payment verification " and "Payment protection" are really nothing more than slogans.

davidsonjoshua
Community Member

Sorry to hear about your problem. It seems to happen continuously on Upwork, and their policy is essentially "too bad." All of Upwork's representations of supporting freelancers are riddled with loopholes and excuses that are buried in the Terms of Service. "Payment verification " and "Payment protection" are really nothing more than slogans.

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