You find a job posting that fits your skill set and experience on Upwork. You draft a killer proposal and before you know it, the client is starting an interview. Within a couple of days, the client awards you a contract, and off you go with the new job. Little do you know, a lurking shadow looms in the form of chargebacks, threatening to spoil your well-deserved success and bring huge disappointment.
Up until now, you suspect nothing as there are no signs to recognize this as a scam. You submit the work and clients release the funds and you laugh all the way to the bank. However, after a few days or even months, you get a notification that the client initiated a chargeback and now you are required to refund the client even though you submitted the work.
This has become a common predicament for many freelancers who have had to part ways with thousands of dollars despite completing their tasks as agreed upon with the clients on Upwork.
Source: Upwork Community
In most cases, when clients initiate a chargeback, Upwork freelancers have the option of starting a dispute process. Here, you will be tasked with providing all the evidence you have. This involves things like screenshots of the conversations, files, and every other thing freelancers deem necessary.
However even after doing all this, you will likely get “The bank will make the final decision, and once it’s made we’ll reach out.”
Source: Reddit
It's interesting to note that Upwork claims to challenge the chargeback with the bank “in an attempt to help the freelancer get the money back.” But based on the feedback from most freelancers, this rarely helps and most have ended up losing money.
According to an Upwork spokesperson, “Upwork may suspend the account of a client that initiates a chargeback since doing so is against their Terms of Service.” However, this has not stopped many clients to issue chargebacks which have affected many freelancers.
It’s also important to note that, though rarely, there can be fraudulent clients who use credit cards that don’t match their names. In this case, it becomes quite hard to track them or even win in the chargeback cases.
In case you have an issue with Upwork chargebacks as a freelancer, the following steps can be quite helpful;
Reach out to the client as soon as you become aware of the chargeback or dispute. Try to resolve the issue directly with them before escalating it further. Open lines of communication can often lead to mutually beneficial resolutions.
If the client is uncooperative and does not cancel the chargeback, reach out to Upwork support. You will need to act quickly as the banks usually give Upwork 48 hours to respond. Collect all relevant evidence and supporting documents that prove the validity of your work or services. This may include contracts, emails, project deliverables, invoices, and any other documentation that demonstrates your agreement with the client and the work you've completed.
Source: Upwork Community
Craft a well-structured and comprehensive response to the chargeback or dispute. Clearly explain your side of the story, referencing the supporting documents you have gathered. Provide a detailed account of the work completed, the value delivered, and any relevant terms and conditions that support your case.
Should direct resolution with the client or internal bank processes prove unviable, freelancers can explore the realms of arbitration or mediation. Arbitration offers a formal framework for dispute resolution, often featuring an impartial third party who delivers a binding decision.
Though this might prove to be a long and tedious process, especially if you are outside the US, it might be quite helpful.
Source: Upwork Community
When it comes to chargeback disputes, an important question arises: Should Upwork enhance its support for freelancers? While Upwork has already established a solid foundation, perhaps it's time for them to step up their game and proactively extend assistance to freelancers embroiled in such predicaments.
An Upwork spokesperson says, “Our chargebacks team takes every chargeback request seriously. Our significant investment in this area directly ties to our company’s mission to provide economic opportunities so people can have better lives, and we always strive to ensure that freelancers are supported throughout the chargeback dispute process.”
Considering the unique challenges freelancers face in chargeback disputes, Upwork can explore additional measures to minimize such risks. For instance, they can bolster their existing support system, streamline dispute resolution processes, and provide comprehensive guidance or educational resources to freelancers.
Upwork could significantly alleviate the burden on freelancers and foster a more secure and conducive environment for freelance professionals. Additionally, they can improve their background checks on clients to weed out scammers. Plus they can adopt more secure payment methods, one that makes it hard to initiate chargebacks without proper dispute mechanisms.
Finally, they should also ensure that their credit card names match and blacklist any clients who have been accused of chargebacks.
In the meantime, freelancers need to be more vigilant when dealing with clients, especially those with limited or questionable work history. Finally, keep in mind that the level of protection available to freelancers varies between fixed and hourly contacts with the latter enjoying more protection.
Image source: pexels.com
