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paulrdespre
Community Member

Scammed by Upwork?

Upwork just sent a refund to my client and it feels like I was scammed by... Upwork.

 

Long story short:

 

New client with Payment verified badge.

Fixed-price job contract with a single milestone fully funded.

I deliver the work and the client is happy and releases the funds. The 5 days hold passes and on 11th of November my funds are Available in my account. Today I got this ticket opened by Upwork and few hours later my funds are refunded to the client without receiving a reply to my questions.

 

**Edited for Community Guidelines** (obviously "community guidelines issues"). Here is what UW is saying in few words: they found evidence of fraudulent activities (no explanation what activities) of my client so they decided to refund the payment because (suddenly) my contract is not eligible for Payment Protection anymore...



 

No proof/explanation of what the client did. No mentioning of the ToS section which invalidates my Upwork Payment Protection and why it does..

 

I am wondering how is Upwork protecting me by ripping me of $950? For me it looks like Upwork has an issue with the client. Why do I have to pay for it? I did the work, I got the payment and Upwork sent the money back. Do we pay big fees to have payment protection only when working with honest customers??

 

So basically we have no protection even with the escrow.

 

35 REPLIES 35
g_vasilevski
Retired Team Member
Retired Team Member

Hi Paul,


I'm sorry to hear about the bad experience you've had. I can see that you have already followed up on your ticket with additional questions. 
Our team will update your ticket as soon as possible and will assist you further. Thank you.

~ Goran
Upwork

Yeah, the response to my ticket was useless. Your colleague is not answering any of my questions but told me to contact the client to get paid. How am I supposed to do that since we communicated through platform and he was remove from it?

 

So the client has Payment Method Verified badge, the five-day security hold passes then Upwork is taking my money back and tells me to chase the client. Why are we bothering to pay fees on contracts if we have no protection at all? 


Paul Eugen R wrote:

Yeah, the response to my ticket was useless. Your colleague is not answering any of my questions but told me to contact the client to get paid. How am I supposed to do that since we communicated through platform and he was remove from it?

 

So the client has Payment Method Verified badge, the five-day security hold passes then Upwork is taking my money back and tells me to chase the client. Why are we bothering to pay fees on contracts if we have no protection at all? 


Probably fraudulent use of a credit card. I don't mean to sound cynical, but upwork only collects their fee if a payment goes through. Paying fees on successful contracts is not an insurance policy to get paid every time. The only way to ALWAYS get paid is hourly contracts with screenshots and memos, since this is the only real proof of work.

It is finally up to us freelancers to vet clients. Was there anything in this contract that was suspicious? Were you grossly overpaid compared to your usual hourly fee? Did you do something that was against ToS like buying cryptocurrency? Was the job too good to be true?

Hi Martina and thanks for your thoughts.

 

I am well aware that Upwork takes the fee only for successful payments but if I can lose all the money from my contract after being paid then what's the point in using the platform's escrow? I could as well take my chances and work outside the platform without a 'false' protection.

 

The job was not grossly overpaid. I proposed to the client a timeframe of 4-5 days for finishing the job and he told me that it needs it a bit faster for which is willing to pay more so we decided to increase the initial price (fixed) by about 15%. Is not the first client who pays more to get the job done faster.

What bothers me is that Upwork refunded the client without any explanation other than they have "evidence of fraudulent activity", they are not responding to my legit question but gave me a general reply and told me to chase the client to get paid.

So I pay 20% for almost all my contracts and when things goes sideways:
- payment method verified badge is useless

- escrow is useless

- five-day security hold is useless

- support not answering to any question

- I take all the losses

OMG Paul, this sounds like an insane situation. ๐Ÿ˜ฌ

What makes it particularly strange is the fact that you're saying the payment already got through! ๐Ÿ™„

Upwork, it isn't enough just to send a default message and let things fade away. Freelancers need to know what happened so that we can learn from it.

These kinds of issues make good guys drop this place and focus on developing their businesses the old-fashioned way without Upwork. After all, we're in business, why risk it? ๐Ÿค”


Mikko R wrote:
OMG Paul, this sounds like an insane situation. ๐Ÿ˜ฌ

What makes it particularly strange is the fact that you're saying the payment already got through! ๐Ÿ™„

Upwork, it isn't enough just to send a default message and let things fade away. Freelancers need to know what happened so that we can learn from it.

These kinds of issues make good guys drop this place and focus on developing their businesses the old-fashioned way without Upwork. After all, we're in business, why risk it? ๐Ÿค”

No, he didn't say the money was already paid out, as in his bank account. It's the same old scenario where the money is in pending, and then the credit card payment doesn't go through/chargeback from the rightful owner and the client is kicked off the platform. Also, we've had a lot of 950$ contracts where that happened.  

The payment was not 'Pending'. The 5 day security hold was gone and I had the funds already available for withdraw but I was waiting for other payments to withdraw all at once.

Basically the support person replied me twice with the same message telling me to contact my client directly for payment* and without answering any of my questions...

 

The department name is "Upwork Trust & Safety Team" ๐ŸคฃThey are taking your money back without any explanation, much trust. 

 

*Upwork is trying to make you communicate only through their platform and is strictly forbidden to get paid outside the platform but then when you have an issue they are telling you to contact the client (which is banned from the platform we were using for communication) to get paid directly.


Paul Eugen R wrote:

Basically the support person replied me twice with the same message telling me to contact my client directly for payment* and without answering any of my questions...

 

The department name is "Upwork Trust & Safety Team" ๐ŸคฃThey are taking your money back without any explanation, much trust. 

 

*Upwork is trying to make you communicate only through their platform and is strictly forbidden to get paid outside the platform but then when you have an issue they are telling you to contact the client (which is banned from the platform we were using for communication) to get paid directly.


Yes there's a certain irony in that. There was a recent post where someone asked if the circumvention fee still has to be paid if the client was banned from the platform after some misconduct, and they said yes. That seems to be a contradiction. 


Martina P wrote:

*Upwork is trying to make you communicate only through their platform and is strictly forbidden to get paid outside the platform but then when you have an issue they are telling you to contact the client (which is banned from the platform we were using for communication) to get paid directly.


Yes there's a certain irony in that. There was a recent post where someone asked if the circumvention fee still has to be paid if the client was banned from the platform after some misconduct, and they said yes. That seems to be a contradiction. 


I think there is a misunderstanding. Upwork probably aren't asking the OP to get paid by the client outside the website. Payment would have to be done via Upwork, using a different payment method other than the fraudulent one... Just because the client is suspended doesn't necessarily mean they have no access to the message function.

Petra,

 

What is the difference between a client and/or his/her contract being "suspended" and a project being put on "hold" by Upwork due to a problem with a client's payment method?


Will L wrote:

What is the difference between a client and/or his/her contract being "suspended" and a project being put on "hold" by Upwork due to a problem with a client's payment method?


None, A contract being put on hold (suspended) is a result of the client's account being suspended, be it temporarily or otherwise, because of non payment or other reasons.

 

When a client's account is suspended, be it temporarily or otherwise, all their contracts are automatically put on hold (suspended) also.

I wish Upwork would be more careful and precise in the words it uses to describe its own policies and procedures.

 

If there is no specific difference between a client's project being put on "hold" or the client being "suspended," and either word can describe either a permanent or a temporary situation, there is no reason for both words being used interchangeably.

 

 

Hi Petra,

 

Yes, it might be a misunderstanding but the support person is not helping at all by ignoring all my questions.

 

I don't know what happens when a client/account is suspended and if messages still can be sent because I've never been on that side.

English is not my first language but from "fixed-price protection is not available when the client is removed from the marketplace for fraud" I understand that the client is gone from Upwork. 


Petra R wrote:

Martina P wrote:

*Upwork is trying to make you communicate only through their platform and is strictly forbidden to get paid outside the platform but then when you have an issue they are telling you to contact the client (which is banned from the platform we were using for communication) to get paid directly.


Yes there's a certain irony in that. There was a recent post where someone asked if the circumvention fee still has to be paid if the client was banned from the platform after some misconduct, and they said yes. That seems to be a contradiction. 


I think there is a misunderstanding. Upwork probably aren't asking the OP to get paid by the client outside the website. Payment would have to be done via Upwork, using a different payment method other than the fraudulent one... Just because the client is suspended doesn't necessarily mean they have no access to the message function.


Right, makes sense, unless the client account was permanently suspended, in which case he probably couldn't even pay if he wanted to. 

Martina:

That is a good example.

 

With some of these issues, one gets to the point where we just need to say to ourselves:

 

โ€She is an Upwork employee. She is required to say that.โ€

 

It serves no purpose to argue with official Upwork employees about the official company position. They are doing their job.

So how does one then sort this out


Mikko R wrote:
OMG Paul, this sounds like an insane situation. ๐Ÿ˜ฌ

What makes it particularly strange is the fact that you're saying the payment already got through! ๐Ÿ™„

Upwork, it isn't enough just to send a default message and let things fade away. Freelancers need to know what happened so that we can learn from it.

These kinds of issues make good guys drop this place and focus on developing their businesses the old-fashioned way without Upwork. After all, we're in business, why risk it? ๐Ÿค”

Mikko, I'm a firm believer that it's our job to fully vet clients to be safe, because while Upwork offers SOME protection, they are clear that in instances of fraud that they cannot offer protection. And why should they eat the cost of fraud? How would that even be sustainable? 

 

But to your point, and mine, Upwork needs to be more transparent so freelancers can LEARN how to effectively vet clients better so there is less fraud. Educating freelancers on what happened helps us identify red flags and avoid fraud, which is better for the platform and for us. I know they are worried about bad actors learning how to rig the system, but if they aren't more transparent, we can't help. And I think that's what's more frustrating than seeing fraud and scams - that Upwork won't even give us information that may help us protect ourselves. 

wlyonsatl
Community Member

Yeah, Upwork should stop using the word "protection" in regards to payments to freelancers under fixed price contracts because there really is none in certain (increasingly?) common situations with fraudulent clients.

 

Upwork's system does facilitate payments, which is useful for freelancers, but it doesn't offer any real "protection" from client fraud in these cases. And that lack of protection should at least translate into a lower Upwork fee on fixed price projects to reflect the freelancers' higher risk of loss on these contracts. (Yes, I know a lower freelancer fee structure for fixed price contracts is not likely.)

 

And even without client fraud, clients with smaller fixed price projects have found that the ultimate solution for payment "protection" when a client demand refunds - arbitration - is not economically feasible or even made available by Upwork in some situations.

 

Upwork should make this lack of true "payment protection" clearly apparent to the freelancer every time a client and freelancer agree to a fixed price contract. 

Will, this is an excellent point and great suggestion.

 

I can see how disappointed a freelancer must be to have been paid through an escrow system and then see that money disappear.

 

The presence of a funded escrow payment really suggests that the money has been obtained by Upwork and will go to the freelancer if she does the work.

 

To spend oneโ€™s time to work on a task and then not get paid because Upwork says the payment is fraudulent? Yeahโ€ฆ we can try to wrap our minds around it intellectually and try to explain it to people.

 

But that doesnโ€™t change the emotional gut punch it must be to the new freelancer who does not have our years of experience with the platform and was making logical conclusions based on what they read on various Upwork screens.

It's not just new freelancers who are shocked by this. I've been using Upwork continually since May 2015 and had no idea until this very moment that a scenario like this could play out for a fixed-price contract. I, too, believed that escrow meant "Upwork has the money and is holding it." I had no reason to believe otherwise since that is, by definition, what "escrow" means.

 

From Webster's: escrow (n): a deed, a bond, money, or a piece of property held in trust by a third party to be turned over to the grantee only upon fulfillment of a condition.

 

This definition says that the money itself is being held, not that the third party promises to get the money at a later date. Therefore, it's not naรฏve to assume that funds actually exist -- it's logical to expect escrow to work this way. If Upwork hasn't actually charged the card to get the funds, they're not holding money in escrow -- they're doing something else. It's that simple. Saying they are holding funds in escrow is misleading at best and intentionally deceptive at worst.


Luckily, I've never had an issues with getting paid for a fixed price contract and have never done a fixed price job for more than a few hundred dollars. Still, this makes me think very hard about doing fixed-price projects in the future and is making me consider removing my "project" listing, which is starting to pick up steam. I have months when losing a few hundred can mean the difference between paying my bills and unexpectedly dipping into my savings, so the possibility of losing out on even a small payment is a big deal.


Signe J wrote:

It's not just new freelancers who are shocked by this. I've been using Upwork continually since May 2015 and had no idea until this very moment that a scenario like this could play out for a fixed-price contract. I, too, believed that escrow meant "Upwork has the money and is holding it." I had no reason to believe otherwise since that is, by definition, what "escrow" means.

 

From Webster's: escrow (n): a deed, a bond, money, or a piece of property held in trust by a third party to be turned over to the grantee only upon fulfillment of a condition.

 

This definition says that the money itself is being held, not that the third party promises to get the money and turn it over at a later date. Therefore, it's not naรฏve to assume that funds actually exist -- it's logical to expect escrow to work this way. If Upwork hasn't actually charged the card to get the funds, they're not holding money in escrow -- they're doing something else. It's that simple. Saying they are holding funds in escrow is misleading at best and intentionally deceptive at worst.


Luckily, I've never had an issues with getting paid for a fixed price contract and have never done a fixed price job for more than a few hundred dollars. Still, this makes me think very hard about doing fixed-price projects in the future and is making me consider removing my "project" listing, which is starting to pick up steam. I have months when losing a few hundred can mean the difference between paying my bills and unexpectedly dipping into my savings, so the possibility of losing out on even a small payment is a big deal.


Not saying I am not guilty of this also, but there is a pop-up warning you every time you accept a fixed-price contract. 

 

But also: I am a client and have fixed price contracts. When I fund escrow, I am charged and the money is put in escrow. Upwork is charging the money and putting it in escrow. The problem is with fraud, they have to refund it to the payment method, so they have to debit it from either escrow or if escrow has been released, your account. 

What does this pop-up warning say, Amanda?

 

I only do hourly projects and have never seen it.


Will L wrote:

What does this pop-up warning say, Amanda?

 

I only do hourly projects and have never seen it.


Well, Will, I unfortunately do not have a screenshot, and I'm at the point where I...ignore it...(okay, but I've been on platform a while and know the risk), but it's a short paragraph about the limited protection and the risks of fixed price. 

Amanda,

 

At least Upwork is clearly putting freelancers on notice that there are risks in accepting fixed price contracts. 

 

Any freelancer who regularly comes to this message board will have some idea of what those risks are.

 

Amanda and Will -- here's the popup. It says the client is charged and the money is deposited in escrow. There are no warnings that the funds could then disappear for any reason. The only warning is that clients might choose not to approve releasing funds. (The listed remedy is that Upwork can mediate...with no mention of the fee, of course.) There's nothing in this warning about Upwork having the right to take back funds after clients have released them. 

Untitled.png


Signe J wrote:

Amanda and Will -- here's the popup. It says the client is charged and the money is deposited in escrow. There are no warnings that the funds could then disappear for any reason. The only warning is that clients might choose not to approve releasing funds. (The listed remedy is that Upwork can mediate...with no mention of the fee, of course.) There's nothing in this warning about Upwork having the right to take back funds after clients have released them. 

Untitled.png


That's not the pop-up I'm talking about. That is for submitting a proposal. There is a different pop-up when you accept a contract. 

 

But again, you seem to be claiming the money is not in escrow. It is in escrow. 

 

Also, mediation is different than arbitration. Upwork provides mediation for free, which is why there is no mention of a fee. Arbitration costs $291, which is different than Upwork's mediation. 

I didn't actually submit the proposal -- I just went through the motions to get the popup and then cancelled. But, it sounds like this isn't the one you're referring to. I don't have any pending fixed-price contracts at the moment, so I can't check on what that one says.

I do know there was no pop-up agreement for the fixed-priced project a client purchased from me yesterday. In fact, there was nothing on my end at all, other than a notification that the client had purchased it and the standard message about how the clock starts ticking once the client submits requirements. (Although maybe I checked a box on a popup when I first set up my project a few months back? I can't remember.)

I always thought the mediation fee was $50. Maybe I'm wrong. I wonder where I got that information/misinformation from?


Signe J wrote:

I didn't actually submit the proposal -- I just went through the motions to get the popup and then cancelled. But, it sounds like this isn't the one you're referring to. I don't have any pending fixed-price contracts at the moment, so I can't check on what that one says.

I do know there was no pop-up agreement for the fixed-priced project a client purchased from me yesterday. In fact, there was nothing on my end at all, other than a notification that the client had purchased it and the standard message about how the clock starts ticking once the client submits requirements. (Although maybe I checked a box on a popup when I first set up my project a few months back? I can't remember.)

I always thought the mediation fee was $50. Maybe I'm wrong. I wonder where I got that information/misinformation from?


Well, that is an excellent point. I don't use PC right now, but it sounds like the process of it does not include the same popups that we get when we get a regular fixed price contract. 

 

Not sure where you heard that about mediation fees. But Upwork staff manage mediation where they basically try to get you and the client to work it out, but there's no fee. To escalate to arbitration, each party pays $291. 

re: "I always thought the mediation fee was $50. Maybe I'm wrong. I wonder where I got that information/misinformation from?"

 

Possibly thinking about another service or website.

I have never heard of a $50 mediation fee.


Signe J wrote:

Amanda and Will -- here's the popup. It says the client is charged and the money is deposited in escrow. There are no warnings that the funds could then disappear for any reason. The only warning is that clients might choose not to approve releasing funds. (The listed remedy is that Upwork can mediate...with no mention of the fee, of course.) There's nothing in this warning about Upwork having the right to take back funds after clients have released them. 

 

They don't return money, only if the credit card was stolen or fraudulently used and the rightful owner requests a charge-back. There were many instances recently where freelancers complained, but most of the time it turned out they did something against the ToS, like buying cryptocurrency for somebody offering a huge commission because they can't buy cryptocurrency themselves... things that don't make any sense. If upwork took the hit on fraudulent acitivity, they would be out of business in days. 

There is no true "escrow" unless the "escrow agent" can confirm it has good funds from the payor (the client) in its possession and the payor cannot unilaterally take any of those funds back from escrow (without the approval of the "agent")..

 

Just making sure a charge of a couple of dollars goes through on a credit card submitted by the client, in this case, does not establish "escrow" in any usual sense of that word.


Will L wrote:

There is no true "escrow" unless the "escrow agent" can confirm it has good funds from the payor (the client) in its possession and the payor cannot unilaterally take any of those funds back from escrow (without the approval of the "agent")..

 

Just making sure a charge of a couple of dollars goes through on a credit card submitted by the client, in this case, does not establish "escrow" in any usual sense of that word.


The payor (client) does not have the ability to unilaterally take any funds back from escrow. And in the situation in question, the agent (Upwork) is returning funds that were stolen through credit card fraud (it sounds like although we cannot be sure). It is not a unilateral action from the payor. So it does establish escrow then, under your definition. 

And that's why this is not true "escrow," Amanda L.

 

If Upwork had good funds in its account for a particular transaction, then those funds could not be taken back by the paying party or paid out to the receiving party without Upwork's permission within the rules of escrow agreed to by all three parties.

 

And a true escrow agent confirms the identity of both of the other two parties to a transaction, accepting payments only through irreversible channels, such as wire transfers from the payor's bank.

 

Escrow doesn't properly exist if the escrow agent doesn't have full and sole control of the funds paid in by the payor, which apparently is not true with the credit card payments Upwork receives. If the bank or other credit card issuer can reverse a payment without Upwork's agreement, then Upwork is not in control of the funds and is not an escrow agent in the usual sense of that title.

 

 

paulrdespre
Community Member

Bit of an update: not much progress in ever seeing the money again but at least I found a support person who is willing to answer my questions.

 

Appears that when a client's account is suspended he is still able to login and respond to messages. Also the support person was kind enough to contact him on my behalf but I bet we will never hear from him again. ๐Ÿ™‚

 

About the unanswered questions I was told they were sent to "internal team" for further clarification.

 

What I've learned?

1. Upwork is selling us a false sense of protection (at least for fixed-price projects).

2. I will ask all my future clients for a direct way to contact them.

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