My client was happy, suddenly closed the contract and wants a refund.

[ashcyp]

Hi, I have a problem here and want some advice.

I am a pitch deck designer with quite good experience in the startup world. Pitched in front of billionaires, raised 3 times, and currently, I am mentoring young entrepreneurs and helping them with their dreams becoming the next unicorn startup. Why am I telling this, I might be new in Upwork but not new in this area.

So here is the problem. I proposed to a client he accepted it. He wanted me to design a pitch deck with animations. I did a very well pitch deck with placeholders since I was also helping him with the plan. So anyway, I sent him a video version of the pitch deck (recorded screen) and he said looks good. Twice. I asked if there are any problems if you don't like anything but he said, no it looks good. So basically he was happy as far as I understood. We continued working and since he was a %98 rated 10k+ client I thought sharing the pitch deck and working on the slides together would be a better way. Once I did share the pitch deck, he closed the contract and asked for a refund (1k escrow paid). We were on the 5-6th day of the transaction and had 8-9 more days till the contract end. So it means a lot of time left.

Of course, I refused the chargeback and filed a dispute. His excuses are mainly "He put wrong text in the team slide". Which every designer knows you first put some lorem ipsum data to see how it looks filled, and he also claims that I haven't spent much time in this it looks bad and wants to give me $250.

Here is the problem. The client is constantly lying in the dispute chat. He says he doesn't like it but in the chat that we made on Upwork, he never said anything about it. His clear intentions are to get the $1000 back with a ready pitch deck which all left is to edit some text and change a couple of pictures.

When I asked Upwork about the AAA process they told me it will cost you money and time. I have no idea about how AAA process works, how much it will cost me and I am not a U.S citizen. So how are my rights being protected? I clearly have all the proof in our private messages so what should I do?

One lesson I learned is, never to submit anything without a watermark.

[lysis10]

Arbitration is like online court and it costs $300. The client might not pay and then you would automatically win fees back and the escrow.

Don't bother defending yourself in mediation and it doesn't matter what he's saying. The mediator can't decide who wins. You either settle for an amount or go to arbitration. It's the downside of escrow projects, and I believe many clients go with escrow jobs thinking they can easily get a refund, and most probably do.

[ashcyp]

So I won't be the one paying for the Arbitration correct? I have proof of every chat message him liking the project telling me everything positive and suddenly this.

I told him to meet in the middle $750 but seems like he doesn't want to agree. He said he would happily go to the 3rd party. So what will happen next? Who will pay what how long does this process go

[a_lipsey]

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Ashkan A wrote:

So I won't be the one paying for the Arbitration correct? I have proof of every chat message him liking the project telling me everything positive and suddenly this.

I told him to meet in the middle $750 but seems like he doesn't want to agree. He said he would happily go to the 3rd party. So what will happen next? Who will pay what how long does this process go

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You have to pony up $300, the client has to pony up $300, and Upwork ponies up $300. If the client decides not to pay the $300, then you win by default. But yes, you do have to pay teh $300 first. 

[wlyonsatl · Accepted solution]

Ashkan,

Your nationality is irrelevant when it comes to arbitration through Upwork's dispute resolution process.

With $1,000 at stake it sounds like it would be worth your while to agree to pay $291 to Upwork to take the dispute to an independent arbitrator. If the client also agrees to pay $291, then Upwork will tell you how to begin contact with the arbitrator. If the client does not agree to pay $291 then you will win the dispute by default and Upwork will release the full amount of funds in escrow to you.

An arbitrator is both judge and jury, not needing to conform with all the rules and regulations related to what lawyers need to know to present and win a case before a judge. You can get a lawyer involved in arbitration, if you wish, but it probably isn't necessary or worth the price. This makes arbitration (much) less expensive and significantly faster than formally bringing a suit before a court, and you can do it remotely rather than having to show up in court. In America, arbitrators are typically more specifically interested in justice than a judge is; judges are primarily focused on what the law says first and how well each side's lawyers present their case. Justice may or may not be served in the end.

If you go to arbitration, do whatever the arbitrator asks you to do and provide whatever information the arbtrator requests. Stick to the facts when telling your side of the story.

Once you and the client agree to take the dispute to arbitation, the arbitrator's decision is final. Neither of you will be able to ask Upwork for further assistance in resolving the dispute and neither of you can take the case to court. 

Good luck.

[versailles]

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Will L wrote:

If the client does not agree to pay $291 then you will win the dispute by default and Upwork will release the full amount of funds in escrow to you.

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Plus they will return your $291 back.

[wlyonsatl]

Rene,

I'd expect Upwork would not process the $291 payment from the freelancer until the client agrees to make a payment, so no return of funds would be necessary if the client doesn't agree to arbitration.

Do you know otherwise? $291 is not a small amount of money for some freelancers.

[lysis10]

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Will L wrote:

Rene,

I'd expect Upwork would not process the $291 payment from the freelancer until the client agrees to make a payment, so no return of funds would be necessary if the client doesn't agree to arbitration.

Do you know otherwise? $291 is not a small amount of money for some freelancers.

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They do charge the freelancer first and then ask the client to pay. Maybe as a way to call the freelancer's bluff or just that it is under the freelancer's control how they want to go. 

[wlyonsatl]

That's interesting information, Jennifer.

Is it up to the freelancer alone to first agree / request arbitration and then the client can agree or not agree?

I have only had two or three disputes in my 250+ Upwork contracts and have never had to go to arbitration.

[lysis10]

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Will L wrote:

That's interesting information, Jennifer.

Is it up to the freelancer alone to first agree / request arbitration and then the client can agree or not agree?

I have only had two or three disputes in my 250+ Upwork contracts and have never had to go to arbitration.

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I've only been to one arbitration suit and the guy had definitely done it before. This was Elance though and Elance had you both pay at the same time.

The other time I paid, the mediator said "ok, you pay" and I paid. Then she said thank you and said the client had 3 days to pay. As usual, she gave him an extra couple of days to respond but he just disappeared. I kinda knew he didn't have $300. So, then they credited the money back to my card. Maybe she knew he didn't have the money either, I'm not sure. On my last $250, I was ready to do it again but the mediator stepped in and made me a deal that made sense so I took it.

[bizwriterjohn]

I am a pitch deck developer with serious experience in the start-up world.  I always provide a refund on a request, no questions asked.  My JSS is the most valuable asset I have in freelancer-land.  To complete the work, I schedule a end-of-project call, and ask to determine specifically what happened so as to hopefully avoid this problem in the future.  This provides clients with an opportunity to air their differences.  I listen patiently, assume in any situation it takes two people to mess up a circumstance and the circumstance I wish to avoid is a low JSS rating.

Then I remind the client my JSS is a vital asset to me, ask them to close the project down, and let them know I was happy to provide services to them.  This has happened 1x in 80 or so clients -- I choose them very carefully. A 5-0 was returned, glowing comments of appreciation and I protected the most valuable asset I have on this system in early work hunt scenarios.

Later, I enjoy the JSS advantages I have over freelancers that felt compelled to swing the financial bat and did not realize or place value on the simple parable.  "It is a poor bat that does not swing in both directions".

Banquet for thought.

[wlyonsatl]

So, John. do you give all of your clients 5-star ratings across the board, regardless your experience working with them?