🐈
» Forums » Freelancers » The big gap in the Upwork protection system.
Page options
vladimir_silviu
Community Member

The big gap in the Upwork protection system.

It is time to talk about the elephant in the room and I have the feeling that this is not a new topic on this forum.

It all began with me taking on a fixed price contract, with a man from Switzerland.

This man an **Edited for Community Guidelines**, who relied on google translator for communicating (you can imagine how that went)  with me, refused to pay after I gave him the final cut of the video.

Yes, after declaring himself satisfied with the product quality, he immediately changed his mind saying that the video is in fact, not good at all. He went from, perfect my friend to, no, the video does not meet our requirements  in an instant after I uploaded the final version.

Yes we had an dispute of course, and in that dispute the people from Upwork after analyzing the facts , concluded that this man should pay the money,

The contract was for 100 dollars. The scammer of course refused to pay, because that was his intent from the start...And so, I found out that Upwork resolutions in disputes for fixed priced contracts and the Upwork contracts, are NON BINDING AND JUST PLAIN TEXT WITH NO EFFECT WHATSOEVER.

And so the arbitration option comes in. Well, who in their right mind is ever going to pay a 300 dollars fee for 100 dollars contract (85 or 80 minus Upwork tax)

How is this even possible?! This is literally heaven for scammers, because I can't afford to pay this, and if the scammer doesn't pay or declare any intention to pay, THE MONEY GOES AUTOMATICALLY BACK TO THE CLIENT FROM ESCROW. So basically everybody can scam everybody else due to the fact that sane people will never pay 300 dollars for such low paid contracts.

So here I am scammed successfully in plain sight under the supervision of Upwork with ZERO PROTECTION.

And let me be clear about this I have proof of work print screens everything that proves this man is scamming me. I reiterate, Upwork concluded this man should pay me. But they can make only recommendations, they can't  make any binding decision, or obligate the client to pay in any way.

So in conclusion, Upwork can't actually protect freelancers for fixed priced contracts, even if it is clear that the client is scamming you, Upwork still can't do anything about it.

So upwork now actually knows this man is scamming me because I can't afford to pay 300 dollars for 80 dollars and they are cool with it…

I understand the need for arbitration in cases that are hard to conclude, but not in my case, my dispute is clear, the man is scamming me.

I think this is a major problem in the Upwork sistem and I think they should do something about it.

ACCEPTED SOLUTION
wlyonsatl
Community Member

Yes, Vladimir, Upwork freelancers who do fixed price contracts should understand that their only hope in getting paid by clients who refuse to pay is typically to either agree to pay $291 for arbitration (and to win arbitration) or to take those clients to court (and win their lawsuit).

 

With clients and freelancer so often being in different countries, arbitration is a much more economical option than a lawsuit. But neither is much help for a freelancer whose best possible outcome is to eventually be paid a modest amount that is well below the costs of enforcement.

View solution in original post

29 REPLIES 29
wlyonsatl
Community Member

Yes, Vladimir, Upwork freelancers who do fixed price contracts should understand that their only hope in getting paid by clients who refuse to pay is typically to either agree to pay $291 for arbitration (and to win arbitration) or to take those clients to court (and win their lawsuit).

 

With clients and freelancer so often being in different countries, arbitration is a much more economical option than a lawsuit. But neither is much help for a freelancer whose best possible outcome is to eventually be paid a modest amount that is well below the costs of enforcement.

The big gap in the Upwork protection system.



This is insanity. The vast majority of the contracts on upwork are fixed priced contracts.

Why does this even exist and why upwork is permitting this? In what sane world do you have to pay more money because you don't want to get scammed, and eventually get paid for your work?? This is madness. How can I ever get another contract knowing that I am basically at the mercy of the client. If the client want s to pay cool if not , ohh well your loss…

I don't  feel safe on Upwork and after this extremely upsetting experience I think I will close my account. I am here to try and make some money not pay 300 dollars for all the clients that just decide not to pay me because they can, and with no repercussions. I can't believe this is real and everybody runs cool with it.




Vladimir S wrote:

The big gap in the Upwork protection system.



This is insanity. The vast majority of the contracts on upwork are fixed priced contracts.

Why does this even exist and why upwork is permitting this? In what sane world do you have to pay more money because you don't want to get scammed, and eventually get paid for your work?? This is madness. How can I ever get another contract knowing that I am basically at the mercy of the client. If the client want s to pay cool if not , ohh well your loss…

I don't  feel safe on Upwork and after this extremely upsetting experience I think I will close my account. I am here to try and make some money not pay 300 dollars for all the clients that just decide not to pay me because they can, and with no repercussions. I can't believe this is real and everybody runs cool with it.




What is your recourse if a non-Upwork client fails to pay you? Do you file a lawsuit over a $100 debt?

The "gap" that the original poster refers to is what I have often called the "fixed-price loophole."

 

It is real. It is a problem for many freelancers.

 

The "solution" is to not get into such a situation in the first place.

 

A freelancer "protects himself" by only agreeing to small fixed-price contracts with clients he has not worked with before: no more than an hour or two worth of work.

 

If a client turns out to be dishonest, or in any way unreasonable in the way she uses fixed-price contracts, then the freelancer can afford to walk away, if necessary. A freelancer can keep the work for himself and simply stop working for a dishonest or unscrupulous client.

 

If a client demonstrates that she is trustworthy and pays for work done using fixed-price contracts in an expected, professional manner, then a freelancer can agree to increasingly large fixed-price contracts.

Preston,

 

Maybe you should start calling it the "fixed-price black hole"?

If you fail to see the difference  between a non Upwork client and a client that you have a  so-called “contract on upwork” well...there is a problem.

But hey, why not work for free if it is just 100 dollars right?


Vladimir S wrote:

If you fail to see the difference  between a non Upwork client and a client that you have a  so-called “contract on upwork” well...there is a problem.

But hey, why not work for free if it is just 100 dollars right?


That you fail to see there is no difference is really the problem.  If you treated the client like there was no protection, how might you have approached the client and contract differently? Considering the communication barrier, would you have still taken it? 

 

I prefer fixed price. I vet clients substantially. I have never not been paid. I don't find this to a loophole at all. What I find it to be is a vetting system for freelancers who do due diligence and know how to protect themselves, versus who do not and who expect someone else to protect them. I also don't see how it's a loophole when Upwork is pretty up front about how disputes work and how much mediation costs. They are pretty clear about how far the protection extends, and most freelancers can do the math beforehand about how much risk they want to take on. 

 

I'm sorry you got burned. Hopefully you learned a lesson about vetting clients and making sure you can effectively communicate with the clients you select before agreeing to a contract. 

Amanda,you are missing the point. Upwork is facilitating a backdoor to scammers, through this process.


Vladimir S wrote:

This is insanity. The vast majority of the contracts on upwork are fixed priced contracts.


They're not. Maybe in your category, but not overall. In fact, there are sgnificantly more hourly jobs overall. (over a third more hourly than fixed rate)

 


Vladimir S wrote:

If the client want s to pay cool if not , ohh well your loss…


Well, not entirely.

Had you paid the arbitration fee, the client would virtually certainly have known that their game was up, taken his toys and gone home.

In that case you'd have got your arbitration fee back and the money in escrow.

 

I absolutely appreciate that this means you have to have access to $ 291, and be able and willing to gamble with that to a degree, but a client who isn't willing to pay $ 100 certainly isn't going to be willing to pay $ 291.

 

Also, as has been mentioned, you need to vet clients carefully. If you do that, you'll rarely, if ever end up with a dispute. I've managed just one in over 300 contracts, and have never not been paid.

Obviously it will have been a shock to run into such a client in your third job, but it really isn't the norm.

 

 

Petra,

 

Where did you get the information that "there are sgnificantly more hourly jobs overall. (over a third more hourly than fixed rate)."?

 

Thanks in advance.


Will L wrote:

Where did you get the information that "there are sgnificantly more hourly jobs overall. (over a third more hourly than fixed rate)."?

From my job search

 

hourly v fixed rate.png

I should have qualified it as "job posts" I suppose 🙂

Fact remains that "the vast majority" aren't fixed rate, which is what I was addressing.

I don't know how you have time to winnow through over 144,000 job openings to find the right jobs with clients you plan to vet in some way, but kudoes to you, Petra. 🙂

 

I use nine different search phrases when I search for jobs, which this morning are returning only 764 total jobs of which 68% are hourly, 30% are fixed and 2% are weekly retainer.

 

However, there is a very diverse result for each specific search term with one term having 80% on an hourly basis and another having zero on an hourly basis.

 

Clearly, each freelancer will have very different job availability for hourly vs. fixed rate jobs. I'd guess that higher priced jobs tend to be hourly across all specialties, and low-priced jobs tend to be fixed rate.

 

I have no way of knowing that is true, but I'd expect most highly-skilled consultants cum freelancers can't know ahead of time how much work a complex new project will involve and they have the choice of not putting up with scope creep from their clients, so they don't take on fixed price projects. 


wrote:

I don't know how you have time to winnow through over 144,000 job openings


I dont. When Covid first started I was watching the overall number of jobs posted on Upwork, to see if there was a decrease over time (there wasn't)


So I would periodically run a "blank" search with nothing in search terms, which gives you the overall number of currently open job posts. 


This also just happens to show the numbers of fixed / hourly.


Obviously I don't use that for my job searches, purely for number crunching.

 


However, there is a very diverse result for each specific search term with one term having 80% on an hourly basis and another having zero on an hourly basis.

 Of course. I was really just addressing the specific statement that "the vast majority of jobs are fixed rate," although of course that might be the case in the OPs searches/experience.

 

Yes, obviously.

 

That's why I put a smiley face at the end of the sentence.


Will L wrote:

Yes, obviously.

 

That's why I put a smiley face at the end of the sentence.


Got it 🙂

If the original poster doesn't like fixed-price jobs (and I understand his reasons for not liking them), then a simple solution is to not work on fixed-price jobs.

 

No freelancer is required to work on fixed-price jobs.

Many freelancers ONLY work on hourly contracts.

Preston,

 

If most low-priced jobs are fixed price, which I suspect is true but can't prove, then low-cost freelancers don't usually have a choice to choose only hourly contracts.

 

Would you agree that the Upwork experience (such as quality of potential clients) is very different for freelancers who earn $50 per job vs. freelancers who earn $1,000+ per job?

 

I am certain Upwork does its best to ensure low-priced freelancers get paid for their work, not least because no pay for the freelancer means no fee for Upwork. But, judging by the posts on this board over any length of time, it appears the ole 80/20 rule is in effect: 80% of freelancer/client conflicts are related to 20% of freelancers and clients (the ones with the least valuable projects).  


Will L wrote:

If most low-priced jobs are fixed price, which I suspect is true but can't prove, then low-cost freelancers don't usually have a choice to choose only hourly contracts.


Let me just throw "low rate - long term" contracts into the mix... There are tons of people doing tons of hours at a (relatively) low hourly rate. So those are entry level hourly, high value contracts but over a long period of  time (often data entry / customer service etc.)

 

I believe that such freelancers make up a fairly significant percentage overall. 

That may be true, Petra. I hope it is true, But we will likely never know.

 

But, happily for such freelancers, all hourly work at every price level can apparently qualify for coverage under Upwork's excellent hourly payment protection.

 

As you know, there is no effective payment protection when clients don't want to pay for low-cost fixed price projects. Upwork might ban such clients, especially if they establish a pattern of such behavior, but that is little comfort for freelancers who don't get paid.

 

If I took on a $50 fixed price job for which the client refused to pay, I'd be happy to take it to arbitration just to prove a point. I don't know if that would be an option from Upwork's point of view, but I'd be willing to accept the low risk that such a client would even agree to pay $291 when (s)he knows arbitration is unlikely to go their way.

 

That gambit is just not a safe enough option for most low-cost freelancers. 


Will L wrote:

 

As you know, there is no effective payment protection when clients don't want to pay for low-cost fixed price projects. Upwork might ban such clients, especially if they establish a pattern of such behavior, but that is little comfort for freelancers who don't get paid.

 


I was under the impression that Upwork frequently pays these low-cost, fixed price projects out of their own pocket in order to resolve disputes.

Chritine,

 

There is no possibility Upwork itself regularly pays freelancers for low-cost jobs when their clients object to paying.

 

News of such a policy would spread through the global world of frauds and criminals with more speed than Upwork's already busy whack-a-mole anti-fraud apparatus could handle.


Will L wrote:

Chritine,

 

There is no possibility Upwork itself regularly pays freelancers for low-cost jobs when their clients object to paying.

 

News of such a policy would spread through the global world of frauds and criminals with more speed than Upwork's already busy whack-a-mole apparatus could handle.


It has definitely happened, Will. I've seen at least 4-5 different posts in this forum in which freelancers say that their client didn't pay them $20 or $30 or whatever, but that Upwork gave them a "courtesy credit" without them having to go to arbitration. But it's true that I don't know how regularly it happens. 

Christine, 

 

I clearly said I said I expect it is not a regular policy Upwork would likely have; I didn't say I thought it never happened.

 

Upwork sometimes bends over backwards to placate both freelancers and clients. In one instance where a client of mine some time back unsucessfully demanded a substantial refund from me on an hourly project Upwork offered to instead refund to the client the fees Upwork earned on the project. The client didn't deserve it, but Upwork offered it.

 

Since English is not the first language of so many of Upwork's freelancers, especially those who are likely most often working on lower-priced projects, I doubt we see complaints on this board that are representative of all low-cost projects with client payment problems. 

 

Now, I think I'll take my leave of this thread so you and Petra can wrap this up.


Will L wrote:

There is no possibility Upwork itself regularly pays freelancers for low-cost jobs when their clients object to paying.


There are plenty of posts about it....

 

Well, here is an idea. If Upwork concludes that the client should pay the freelancer after analyzing facts. Maybe they should pay the freelancer out of their own pockets.

They don't pay 300 dollars arbitration fee, they help the freelancer not to get scammed, everybody wins.

Why go on with the arbitration if you as a legal  entity, conclude that the client must pay. I get that Upwork can't make binding resolutions on their contracts because the contracts are just plain text, but they  can pay the scammed part of the contract,  especially when there are low paid contracts.

Because otherwise Upwork just takes part in an obvious injustice and they don't do anything about it.


Vladimir S wrote:

Well, here is an idea. If Upwork concludes that the client should pay the freelancer after analyzing facts. Maybe they should pay the freelancer out of their own pockets.

They don't pay 300 dollars arbitration fee, they help the freelancer not to get scammed, everybody wins.

Why go on with the arbitration if you as a legal  entity, conclude that the client must pay. I get that Upwork can't make binding resolutions on their contracts because the contracts are just plain text, but they  can pay the scammed part of the contract,  especially when there are low paid contracts.

Because otherwise Upwork just takes part in an obvious injustice and they don't do anything about it.


Upwork has already taken on a lot of the burden of ensuring that freelancers get paid - and these continuous payouts and customer service demands are part of the reason why we have to pay such high fees - but I don't see why they should be entirely responsible. We are not employees of Upwork; we are freelancers who are supposed to be able to run our own businesses. It's up to us to vet our clients, define our terms and protect ourselves; it isn't right the way some freelancers expect to go running off to Upwork and have them to pick up the pieces whenever anything goes wrong. I already have to pay 20% fees on my new customers despite the fact that I rarely need help from customer service and have never had a problem getting paid; I don't see why my fees should have to be any higher just because some freelancers don't know how to deal with their clients.


Vladimir S wrote:

Well, here is an idea. If Upwork concludes that the client should pay the freelancer after analyzing facts. Maybe they should pay the freelancer out of their own pockets.

 


I'd rather they did not and stayed in business. They are already losing a lot of money. 


Vladimir S wrote:

Well, here is an idea. If Upwork concludes that the client should pay the freelancer after analyzing facts. Maybe they should pay the freelancer out of their own pockets.

They don't pay 300 dollars arbitration fee, they help the freelancer not to get scammed, everybody wins.

Why go on with the arbitration if you as a legal  entity, conclude that the client must pay. I get that Upwork can't make binding resolutions on their contracts because the contracts are just plain text, but they  can pay the scammed part of the contract,  especially when there are low paid contracts.

Because otherwise Upwork just takes part in an obvious injustice and they don't do anything about it.


No,  I don't want the fees I pay to go toward UW bailing out FLs who claim they've been "scammed" when in reality, they've lost money becasue they were inexperienced and made one or more errors in vetting a client, managing a client, managing a project, or general communication with the client. 


Will L wrote:

 

I have no way of knowing that is true, but I'd expect most highly-skilled consultants cum freelancers can't know ahead of time how much work a complex new project will involve and they have the choice of not putting up with scope creep from their clients, so they don't take on fixed price projects. 


I have no way of speaking for "most" highly-skilled consultants cum freelancers but for myself, I can absolutely determine how much work a complex new project will involve by spec'ing it out in close consultation with the client. This is a necessary step before negotiating the price regardless of which contract terms we decide to use. I can't manage my calendar, much less individual projects (including clients' expectations), without doing this. This doesn't avoid or evade scope creep but it does establish necessary boundaries so if and when scope creep arises, we can mutually acknowledge it and negotiate time/effort/money accordingly.

 

Latest Articles
Featured Topics
Learning Paths