How to Freelance sites Avoid Getting Scammed?

10 replies
Warriors,

I'm developing a freelance site idea of mine, and I've come to realize something:

Freelance sites have almost no protection from scammers.

Does anyone know how they handle chargebacks?

Let's say job poster 1 (scammer) post a $100 article writing job and awards it to worker 1(same scammer in disguise).

Worker 1 gets the funding sent to him, clears it to his bank account. At which point, job poster 1 issues a chargeback on the $100 fee.

Freelance site not only loses $25 for the chargeback fee, but also are out the $100 they just paid out to 'worker 1'.

This is the only thing holding me back from starting my own site - getting completely ripped off by savy scammers who know how to manipulate the system...

Any ideas?

Thanks!!!
#avoid #freelance #scammed #sites
  • Profile picture of the author Damien Roche
    That's why they use escrow. When escrow is released there is usually an agreement by the buyer that they CANNOT refund this. That's why you only release escrow on project completion.

    Protects both parties during the project and ensures everybody is happy.
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    • Profile picture of the author Daniel Brock
      Originally Posted by Damien Roche View Post

      That's why they use escrow. When escrow is released there is usually an agreement by the buyer that they CANNOT refund this. That's why you only release escrow on project completion.

      Protects both parties during the project and ensures everybody is happy.
      It would be just as easy to issue a chargeback on escrow....

      The scammer would just have to wait a couple extra days until the funds clear the escrow account until they issue CB...
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  • Profile picture of the author jennypitts
    I agree with Damien. I also want to add that there is really NO 100% way to avoid scammers. Unscrupulous people will still figure out how to beat the system and steal money from someone, be it you, or another freelance member. Not to mention that most freelancing sites have lost a lot of credibility and validity because way too many third world country freelancers are bidding on jobs for a few cents and leave much to be desired with regards to the quality of their work. NOW, you still find honest people from those countries but it is pretty much TRIAL and ERROR on a BIG scale! And, that will be what you have to look forward to. This is not to scare you but rather so that you can have it present in your head in the creation process.
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  • Profile picture of the author Damien Roche
    Then maybe you should introduce a legal agreement that allows you to refuse these chargebacks..can you do that? I'm not sure.

    In my 5+ years freelancing and a lot of experience on these freelance sites, I've never once experienced such a scenario. So I guess I am truly lucky! I'm thankful for that.

    ..not entirely sure what you can do.

    The problem lies in that you don't have control over these chargebacks, and if there is NO way to manage chargebacks (i.e. accept/refuse) based on whether you or your staff deem it unethical, then there's no way to protect yourself.

    Like any refunds - you take it in your stride and move on. I would imagine these unethical refunds would make up only a small percent of transactions.
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    • Profile picture of the author rosetrees
      I would suggest that you don't handle the payments. Let the freelancers and clients handle the payment. Then you don't have to pay for chargebacks.

      Just charge a fee for posting a job
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      • Profile picture of the author sbucciarel
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        Originally Posted by rosetrees View Post

        I would suggest that you don't handle the payments. Let the freelancers and clients handle the payment. Then you don't have to pay for chargebacks.

        Just charge a fee for posting a job
        I agree ... I wouldn't handle the payments except the payments to the site (your commission). In addition, this is why most freelance sites have a policy that they don't get involved in their customers disputes. Disputes are between the buyers and sellers ... you hire at your own risk and are hired at your own risk. Even with a site as sophisticated as Elance, there's no real guarantee that you'll get paid for what you do unless you have an upfront deposit and a payment schedule during the course of the project.

        I did many projects that the buyer did not pay. I did not deliver, but I had spent hours or days on the projects.
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        • Originally Posted by sbucciarel View Post

          I agree ... I wouldn't handle the payments except the payments to the site (your commission). In addition, this is why most freelance sites have a policy that they don't get involved in their customers disputes. Disputes are between the buyers and sellers ... you hire at your own risk and are hired at your own risk. Even with a site as sophisticated as Elance, there's no real guarantee that you'll get paid for what you do unless you have an upfront deposit and a payment schedule during the course of the project.

          I did many projects that the buyer did not pay. I did not deliver, but I had spent hours or days on the projects.

          I agree!! I belong to a few freelance sites as a freelancer and I always get charged a fee (usually 10% of what I'll get paid) after accepting the job. And, because disputes and jobs are between the buyers and sellers I have been taken advantage of in different ways. Unfortunately there is very little the site does. Now, I always ask for a full escrow, then request for it to be released upon article delivery.
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  • Profile picture of the author Daniel Brock
    Thanks guys and girls.

    Do you all know how often you guys get ripped off when you do provider to worker transactions?

    Do you get put off by a freelance site if they only do direct transactions like that?

    I appreciate the input...already been a big help.
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  • Profile picture of the author Mrs_Mo
    I'm out of the internet outsourcing / freelacing thing due to many problems....But In the past I had paid membership in the top freelancing sites, mainly because of their escrow services, the steps they take to confirm members identity, at least you know they have the members real address, a credit card etc, not to mention the member resolution and mediation servce, handling W9 / 1099 forms, having a legal department etc. So they were good and liable.
    I wouldn't join a site that is merely a classified ad / board that doesn't offer me some legal protection or escrow service, mediation etc.

    But Im in the USA , maybe overseas designers in third world countries join anything, and dont have the same concerns.
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