Solved: Payment reversal after ending contract

0d23e7ad · ‎09-22-2022

I got a project and submitted it correctly. Client ended the contract with 5 star review, but after a week i got email that client's bank asked for reverse payment etc. And my all withdrawls are subjected to withhold.

How can that be even possible? Why client is asking for refund when the whole project has been delivered successfully. I make hardly $400, after months, and he asked for $400 reversed.

Is that how a professional platform works?

wlyonsatl · ‎09-22-2022

Upwork reverses its payment to you if your client doesn't pay Upwork for your hard work. This usually takes the form of either a) the client asking his/her bank to reverse payment or b) the client has fraudulently used someone else’s credit card, which results in a chargeback by the credit card-issuing bank when the actual owner of the credit card complains to that bank. These transactions should be more clearly marked as something like "client fraud" so it is clear why a freelancer is not being paid.

I assume this was this a fixed price project? If so, there is no real payment protection on fixed price projects and Upwork can do little to help you get paid by a fraudulent client. Money in escrow for a milestone might give you some comfort that you will be paid, but third-party arbitration is the ultimate level of resolution on fixed price projects and it is apparently not available, and certainly not worthwhile, on lower value projects. There is usually nothing you can do on your own other than contact the client's bank, but that isn't really a likely avenue for getting paid by such a client.

Experienced freelancers who regularly do fixed price projects might have some ideas how you can best protect yourself from these "refunds" to some extent, but there is not yet a 100% reliable way to ensure good payment by a fixed price client.

Only hourly projects have the potential for meaningful payment protection by Upwork, and then only when certain steps are taken by the freelancer.

Some freelancers have decided not to work with any new Upwork "clients" who have no history of honest dealings on Upwork. There are probably also some red flags freelancers learn the hard way not to ignore when dealing with a potential new client.

Upwork needs to figure out how to set up non-reversible payments on fixed price projects. Wire transfers or similar from clients into Upwork escrow would largely fix the problem of stolen credit cards and chargebacks, but the administration, logistics and cost might not be worthwhile on small projects. In today's digital world, there must be a better solution. Both Upwork and freelancers are losing money due to this type of fraud.

Good luck!

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wlyonsatl · ‎09-22-2022

Upwork reverses its payment to you if your client doesn't pay Upwork for your hard work. This usually takes the form of either a) the client asking his/her bank to reverse payment or b) the client has fraudulently used someone else’s credit card, which results in a chargeback by the credit card-issuing bank when the actual owner of the credit card complains to that bank. These transactions should be more clearly marked as something like "client fraud" so it is clear why a freelancer is not being paid.

I assume this was this a fixed price project? If so, there is no real payment protection on fixed price projects and Upwork can do little to help you get paid by a fraudulent client. Money in escrow for a milestone might give you some comfort that you will be paid, but third-party arbitration is the ultimate level of resolution on fixed price projects and it is apparently not available, and certainly not worthwhile, on lower value projects. There is usually nothing you can do on your own other than contact the client's bank, but that isn't really a likely avenue for getting paid by such a client.

Experienced freelancers who regularly do fixed price projects might have some ideas how you can best protect yourself from these "refunds" to some extent, but there is not yet a 100% reliable way to ensure good payment by a fixed price client.

Only hourly projects have the potential for meaningful payment protection by Upwork, and then only when certain steps are taken by the freelancer.

Some freelancers have decided not to work with any new Upwork "clients" who have no history of honest dealings on Upwork. There are probably also some red flags freelancers learn the hard way not to ignore when dealing with a potential new client.

Upwork needs to figure out how to set up non-reversible payments on fixed price projects. Wire transfers or similar from clients into Upwork escrow would largely fix the problem of stolen credit cards and chargebacks, but the administration, logistics and cost might not be worthwhile on small projects. In today's digital world, there must be a better solution. Both Upwork and freelancers are losing money due to this type of fraud.

Good luck!

abhimanyu-bind · ‎03-13-2023

Great insight but the point is, why Upwork does not mention the existence of such kind of possibility in their payment terms and conditions? Instead, they mention Guaranteed Payment protection through escrow! We can't always say it happened only due to the use of stolen CC, isn't there a possibility that the client himself contacts his bank and asks them to reverse the fund?

Happened the same with me, in my case amount was $40, and the whole amount was reversed back after a few months of delivery of work in an active contract, and surprisingly, Upwork paid 20% of their portion also only out of my earnings! I raised an objection for this 20% part but they didn't respond!

For whole amount they said they will respond to client Bank with proofs to show that the transactions was not fraudulent. By now, I have not known the status if they are taking care of it or not!

feed_my_eyes · ‎09-29-2022

Moadib N wrote:
I got a project and submitted it correctly. Client ended the contract with 5 star review, but after a week i got email that client's bank asked for reverse payment etc. And my all withdrawls are subjected to withhold.
How can that be even possible? Why client is asking for refund when the whole project has been delivered successfully. I make hardly $400, after months, and he asked for $400 reversed.
Is that how a professional platform works?

No website or business is immune from chargebacks, so this isn't a problem that's specific to Upwork; your client is the person that you should be blaming. But Upwork would have sent you a message asking you to respond to the request so that they can try to fight it; did you respond?

0d23e7ad · ‎03-12-2023

Yes i responded but no success

bb60dd70 · ‎09-29-2022

These are scammers with stolen credit cards, so when the real owner see these high amounts being charged to them, they reverse the payment. Not even Upwork's payment protection can protect you in this case.

I almost never work for clients who are new to the platform, and I always match the time displayed on their profile with the location they're claiming to be from.

For example:

You're from Pakistan, and let's say the client's profile says they're "30 minutes ahead", but the location displayed on their account is United States. Which is odd, since the only country that is 30 minutes ahead from Pakistan is India. I instantly block these clients before they do any damage.

wlyonsatl · ‎09-29-2022

Muhammad Zuhaib Z.,\

Why do you say, "Not even Upwork's payment protection can protect you in this case."?

As far as I know, Upwork's payment protection on hourly projects does protect the freelancer in all cases as long as the hourly payment protection rules are followed. If you have found that not to be the case, please post the details of your example.

Of course, on fixed price projects there is no enforceable payment protection for chargebacks.

bb60dd70 · ‎09-29-2022

I apologize, I forgot to mention "fixed-price" projects.

spectralua · ‎03-12-2023

Will, hourly protection is a fake. Cool story for newbies. Realy no protection at all here. You can check sample here.

wlyonsatl · ‎03-15-2023

Mykola,

I have successfully relied on hourly payment protection for some of my 400+ projects on Upwork.

The protection is not flawless, but following Upwork's rules pretty much assures a freelancer will get paid. It is not "fake" in any way.

abhimanyu-bind · ‎03-13-2023

Happened with me, in my case it was $40 including upwork 20% fee, they reversed it after few months of successful work delivery! They gave the reason, client has complained to their Bank it as a fraudulent transaction! I provided proofs of work delivery, they said they will represent the case with the Bank.

Nothing happened by now! Also, they paid their share of 20% out of my earnings!