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exbio
Community Member

This is really crazy - Upwork holding my account and money

I've worked on Upwork for about 6-7 years now and it has been a real pleasure, just some bad clients but nothing serious, until now.

 

I received today an email from Upwork claiming that:**Edited for community guidelines**

 

This was from a job offer accepted, delivered and funds released by the client on september 21 (almost two months now).

Upwork took the money from my actual balance, so I have now -$120.

 

I messaged the client, obviously still don't get any response. I sent the files I made for the client to Upwork (music sheet transcriptions) and they say ok, you have your account restored (why would I have my account limited or suspended???) and the bank can take up to 90 days but I understand from the mail that they can negate the funds ๐Ÿ™„

 

I'm really worried because this means that ANY client can do this anytime now on, how can I trust now Upwork will protect my earnings when I accept a client's offer?

 

How can I know if some client from the past will do this now and Upwork take my day/week/month earnings on hold because Upwork cannot protect my money?

 

If the bank's final decision is I don't get my money back, then I got no money even if the client DID receive what was he/she paying for?

 

P.S: this client has a "payment method verified badge", for this specific job he/she hired 3 freelancers, and one of them feedback is now: "Was hired to complete a last minute project with very little communication. Requirements were unclear. I completed what I believed the job was and submitted quickly to get it back as soon as possible since it seemed urgent. 2 days later I finally heard back and was told they hired someone else because I didnโ€™t do what they wanted. However, I submitted work asking for feedback and was willing to redo as needed" 

 

I'm a TOP RATED PLUS freelancer, with 100% job success, 449 jobs and 3253 total hours. 

For first time on this platform I'm really horrified.

24 REPLIES 24
25005175
Community Member

Yeah, it's making the rounds. What's worse is if the Client used a fraudulent card. Unfortunately, Upwork is adhering to their ToS when they do this. The only solace is that the Client gets suspended from the platform, hopefully permanently.

 

Now that I think about it, Upwork should at the very least refund the freelancer's fee.

 

Here is a link to another discussion on the same topic. Upwork's Horrendous Chargeback Protection

Upwork does ban the client and obviously they don't get their commission either; the full contract payment is reversed when clients do chargebacks.

 you right maybe some client can use fraudulent card, but its not freelancer problem 

before the contract begins upwork should block all fraudulent cards

I do agree with you

How? AFAIK, nobody at any financial institution has figured out how to do that.

exbio
Community Member

At least, otherwise they are making money from cheated freelancers.

I think the only "solution" for this is to work purely on hourly contracts ๐Ÿ™„

 

I'm REALLY dissapointed

25005175
Community Member

The other solution is to require clients to not use credit cards - the source of the chargeback option.

The problem with that idea is it introduces significant inconvenience on the client side, to the extent of being a deal-breaker for many. Typically, their alternative is to process a purchase order, which can take several days and involve one or more people handling it through their internal process, and even then, their AP system might be set up to only pay invoices upon delivery, making it problematic or even impossible for them to fund escrow. The last thing we need is to discourage clients from using the platform. Nobody is forcing any FL to use UW and accept cc payments. Anyone who isn't comfortable with the risk can go find their own clients and impose whatever payment terms and restrictions they choose. 

I agree. Especially since it is not uncommon for companies to do all of their purchasing on credit, because of the need for good business credit scores - as well as capital concerns.

 

I did not intend to imply that the best solution was to ban credit cards (especially since some of Upwork's contract types only permit payment via Paypal and credit card. I simply meant that it is the most effective solution to prevent chargebacks.

 

Perhaps this is a matter best brought to legislatures.

Eliminating the option of using credit cards or debit cards (which can also have chargebacks) would eliminate a very large percentage of clients. 

Jonathan L.,

 

I wish Upwork management would explain why it isn't forcing, or even allowing, all US clients to make bank-to-bank payments via Zelle or similar payments services rather than credit cards, which would reduce the likelihood of chargebacks.

About three-quarters of Upwork's revenue came from US clients, most of whom could easily use these common US payment methods. And the US government says it will introduce an even cheaper option for retail bank-to-bank money transfers in 2023, so it's about time that Upwork find a more secure way to get paid so both it and freelancers lose less money to payment-related client fraud.

Upwork could even make the use of these more reliable payment methods optional and mark each new project with the type of payment method the client is using. Freelancers can then decide whether they want to submit a proposal to work on that project. I imagine some projects would receive more proposals than others (and maybe even lower freelancer pricing) based on this information, but both freelancers and Upwork would make more money overall. And freelancers who currently avoid fixed price projects would be more likely to accept work under fixed price contracts, which at least some clients would appreciate.

 

This problem needs to be fixed. Too many freelancers are telling us here that they are being ripped off on their fixed price projects. And Upwork is losing money, too.


Francisco A wrote:

At least, otherwise they are making money from cheated freelancers.

I think the only "solution" for this is to work purely on hourly contracts ๐Ÿ™„

 

I'm REALLY dissapointed


If you mean UW is "making money from cheated FLs" you are mistaken. When a chargeback is filed, the bank claws back the entire payment. You lose the percentage that you netted after UW's fee and UW loses its fee. 

Phyllis, that assumes that Upwork does not charge the fee back to the freelancer as well. Without seeing the transaction reports for the victim of a chargeback, we can't say whether or not that occurs.

 

The legal aspect seems to support a decision to reclaim the cost of the fee from the freelancer. Since, as I understand the technicalities of the transactions, the FL receives the full escrow amount, then pays the fee to Upwork for their marketplace services (and any sales tax required by law). If I'm getting the process correct, Upwork is technically correct if they demand the full chargeback amount (less the client's processing fee) from the FL and keep the fee that the FL paid to Upwork. Technically, if the FL wants the fee back, they would have to attempt a chargeback themselves for that fee and any associated taxes.

Why on earth would UW "charge the fee back to the FL as well"? UW is not in the business of cheating freelancers. 

I'm not saying they do this. I'm saying that they could and be within their rights to do so. It's not like they want to take money back from the FL - they got put in the loathsome position by unethical clients.

 

Again, it is speculation until we get evidence one way or the other.

exbio
Community Member

I think you can ask them not to, but they can do it and you wouldn't know, right?

nmelssx
Community Member

This is where the 20% payment protection taken from every contract that you do is going. 

a_lipsey
Community Member


Wei L wrote:

This is where the 20% payment protection taken from every contract that you do is going. 


No. The 20% you pay is not specifically for payment protection. It's not some kind of insurance. Upwork fees cover many things, including maintaining the platform and marketing to bring in new clients. 

The 20% rate only applies to the first $500 earned with each client. Starting at $501, we pay 10% of earnings with that client until we pass $10k at which point the fee drops to 5%. Essentially, we pay a $50 finder's fee plus 10% of earnings up to $10k. The money goes to maintaining the platform and advertising to attract clients to use the platform. UW generously offers two additional things: subsidized access to a third-party arbitration service in the event of an irresolvable dispute, and payment protection up to $2,500 (per client r'ship) on hourly contracts if the desktop tracker is used precisely as designed and directed. Frankly, I wish they would eliminate the payment protection altogether so people would stop assuming it means UW provides a giant safety net any time things go sideways. It doesn't and it shouldn't, and FLs need to understand they are in business for themselves and it's risky and the smart, successful ones figure out how to manage their risk instead of looking for ways that somebody else can eliminate it for them. 

ashrafkhan81
Community Member


Francisco A wrote:

I'm really worried because this means that ANY client can do this anytime now on, how can I trust now Upwork will protect my earnings when I accept a client's offer?


Yes,m you should be worried any and every online payment made using a credit card is at risk of a chargeback. Upwork is no different and Fixed Fee payment contracts are at a higher risk. 

 

Instead, if you go with hourly contracts you are protected up to $2500/- per client. Some of the FLs here disagree and argue that $2500 hourly protection does not apply to chargebacks, but I have read from Upwork's moderator's post that hourly protection covers chargebacks also, also I have read from a few FLs who faced chargebacks on hourly contacts and Upwork covered it for them. So, I'd like to believe Chargebacks are covered in an hourly contract and you are much safer with hourly contacts. 

 


Ashraf, can you post links to any of those posts by moderators?

It was long ago, Jonathan. But I will try to find it and give you the post link. 

Ashraf,

 

My own experience is that hourly protection definitely applies to cover chargebacks from clients via their banks, as long as the hourly protection requirements are fully met by the freelancer (e.g. work doesn't begin until Upwork has verified client's payment method, no manually-entered work time (even if the client "approves" it), memos sufficiently describing work being done during each TimeTracker-tracked work period).

Thanks, Will! 

 

Now I recall one of the posts I read was yours! 

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