Freelance Scams to Watch Out For on Online Job Marketplaces Part II

Editors Note: This is a continuation from last weeks piece, part one can be found here, “Freelance Scams to Watch Out For on Online Job Marketplaces“. This guest post has been submitted anonymously. Quality contractors can be found on either, or all platforms. And a dedicated freelancer may find a great client after many proposals. In order to find happiness, you must be able to navigate through the BS. This week we’ll look at what companies have had to deal with in their search for competent freelancers.

The single biggest complaint from companies is freelancers who are incompetent. A contractor may give excellent letters and samples, but then turn out awful work after the job is accepted, or worse commit fraud. It’s very difficult for clients to reject work once the contract terms are accepted on either site.

Companies often turn to freelancing sites to take advantage of lower currency rates in foreign countries. Unfortunately, they tend to quickly learn that they get what they pay for. The US dollar goes so far in many countries, especially in Southeast Asia. Freelancers in those areas will pull many different tricks to get your cash or to get your good feedback.

Some of these tactics include:

  • Making a false profile or stealing from others.
  • Misrepresenting their country of origin.
  • Withholding completed work until good feedback is given.
  • Never completing work at all.
  • Dragging out deadlines (a big problem in countries with a lax “time sense”)
  • Claiming skills they don’t have and backing it up with fraudulent examples
  • Complete lack of communication
  • Giving out completely shoddy work and demanding payment for it.
  • Asking for an upfront payment, then bailing on the job.
  • Getting an hourly job, then taking advantage of it to surf the net on the clock.

It’s enough to give any company a headache, and sometimes a lot of wasted money. To get a sense of what sort of scams are out there, take a look at some of these complaints. Alex James Brown said:

Same story here. I hired a contractor to do some lead generation at $5/hour. They hadn’t produced much of anything after 20 hours of work, so I cancelled the job, paid them for the work done, and looked for others to help instead.

Lo and behold, a few months later the contractor came back and created a job on my behalf… at $50/hour and authorized for 30 hours/week, then went ahead and immediately submitted time sheets, for a nice chunk of change of several thousand dollars. Elance was all set to auto-approve, but I was able to go in and dispute it before it was paid. I am now going through that process now.

This lack of control is a serious problem.

These next two are from oDesk community forums:

I have had nothing but problems with people claiming to be SEO experts.

They will not work to get relevant links and keywords are non existant. One even linked my site with a porn site. I have used about 5 and still no success. Anybody else have this problem. Odesk should have some better screening. Source: odesk.com/community/node/26936

oDesk is interesting as they offer software that allows them to take screenshots of the contractors screen to ensure that you only, “pay for hours actually worked.” But does it work?

I hired this guy about a week ago… because we had an email convo and he said he has done projects similar to this before. He ended up logging over 25 hours of “internet surfing (watching videos) and projects he did for other Buyers” and I had to pay for it.

The screen shots odesk provided also showed that he was watching tv, gaming and talking to other providers. I can attach all the screens that odesk took in that 25 hour period and none of which was related to my project. He worked on it for 1 week, without providing anything and in the end I had to hire someone else to finish it in 1 hour. The rate he provided was around $17+/hour and my VISA was billed $400+. Source: odesk.com/community/node/9044

An update posted by the user details that oDesk only refunded about half of his money. You may think that Elance and oDesk would step up to help prevent scams like these, but you’d be very surprised…

What is Being Done About This?

With all these problems, what are Elance and oDesk doing about it? The short answer is “very little.” Each site tackles the issues in different ways.
The two biggest problems that people report about Elance are its escrow system and its conflict resolution system. The escrow system is designed to give contractors peace of mind about the funds they’ll receive for a particular job. You’ll find that many contractors won’t start work until the escrow is funded. This is due to a history of companies putting up scam entries, getting the work done, and then canceling the job. It is a safety net.

The problem for companies is that once the escrow is funded it’s nearly impossible to get the money out again if there is a problem with the end product. Elance’s arbitration system is very slow, and very heavily weighted to the contractor. Why is this? Elance gets its fees from the job poster when a job is successfully completed. If they have to refund the money to the poster, they lose money.

Companies and contractors are given a week to settle things on their own. If things still are sour then they’re sent to a third party for arbitration and charge another fee for this “service.” There are several reports online from people who have had their money locked up because of these systems. Here’s an example complaint:

When disputes arise between a client and contractor, Elance requires the use of Net-arb.com for binding arbitration.
After a year long nightmare with their incompetent Drupal developer and then a lengthy arbitration against SynapseIndia, Elance’s biggest money-maker, I was awarded a partial refund along with the completed portion of the code for my website. Throughout the arbitration, I repeatedly proved that Kapil Gupta (COO of Elance) continuously lied to the arbitrators. Elance paid the financial award for them, but SynapseIndia has not provided the code they were ordered to provide me. Instead, they sabotaged my website and provided only sabotaged code. Both Elance and Net-arb refuse to do anything to force SynapseIndia to comply, and they still troll for suckers on Elance. Buyer be warned.

It’s just as bad for the contractors as well. They have to go through the same arbitration process if they have an issue with their client. If a company refuses to fund the escrow or release funds, it can be quite a challenge to drop the client from their working list or to get paid. They have also been known to remove contractors and job listings for violating their quite large and complicated terms of service, especially if a company and contractor collude to work outside of Elance’s system.

While Elance leans too heavily in favor of contractors, oDesk is a complete free-for-all, and hyper-complicated to boot. The sign-up process and interface are unnecessarily convoluted. But the real complaint is about the near-total lack of protections for either side. Hourly jobs favor the contractor, because once you’ve put in your credit card information into oDesk, they can claim as many hours as they like if you don’t deliberately set a limit. Both Elance and oDesk do take screen-shots of the contractor’s screen while they’re on the clock, but it’s up to the company to confirm that the work is being done. From the site’s perspective, screen shots are proof that the contractor was logged into their system for billing purposes.

Fixed price jobs are a little better, because you can withhold payment until the job is done. However, there is no escrow system in oDesk. If you make an upfront payment and they don’t perform, you’re not getting your money back. At least Elance puts it into a sort of limbo when things go wrong.
Like Elance, oDesk takes a completely hands-off approach to any complaints. As long as an hourly job looks good within their system (properly logged time, and evidence of notes and activity), they consider that the work is done and charge the account. Needless to say, you’re not going to get a lot of help from the portal itself. It’s completely up to the participants of the site to fix their problems. To be fair, there are many good freelancers and clients on these sites, but the quality of the jobs keeps lowering and the number of scammers keeps rising. What can be done about this?

What other freelance scams are out there? Have you been burned before? Let us know in the comments below.

Disclosure: As per the FTC Guidelines for Bloggers, please note that some of the links on this website are affiliate links, and at no additional cost to you, I will earn a commission if you decide to make a purchase. Please read the full FTC Disclosure here.
4 Responses to “Freelance Scams to Watch Out For on Online Job Marketplaces Part II”
  1. Prakash Pandey September 20, 2013
  2. Cliento April 18, 2014
  3. Jay D August 3, 2014
    • Jay Soriano August 26, 2014

Leave a Reply

Your email address will not be published. Required fields are marked *