8 ms·

That's Upwork's fault for allowing the fraudulent transaction and they're trying to steal from you so they don't have to own their fuck up.

tyingq 5y ago
As a former merchant, I wouldn't argue that the freelancer owns this. But, I also don't think Upwork really "allowed the fraudulent transaction". The banks and credit/debit card companies allowed it. And they have a lot more contextual background information on the buyer, seller, and transaction than the merchant does.
- jtbayly 5y ago
  Yes, but isn't this exactly what Upwork gets paid to take care of? The only way that Upwork's actions are justified is if the author was complicit in this scam. In which case, he wouldn't have really been working, and he would have split the money back with Robin, the guy who "hired" him on Upwork. But in that case, Upwork would obviously kick the author off of Upwork, not ask them to continue working.
  - ethbr0 5y ago
    The hierarchy of information and scale here, from most to least, seems to obviously be: banks, Upwork, freelancer. Or, to put it another way, requiring the freelancer to pay this begs the question: "What could the freelancer have done to avoid this?" To which the only answer is: everything Upwork is abstracting away and doesn't want their freelancers doing. Do a background check on the client. Obtain the client's actual payment methods and verify them with the bank. Etc. All of which are literally Upwork's functions in this arrangement, because like PayPal, they exist to centralize and decrease friction between two semi-trusting parties. And when that goes bad, it's bullshit for them to transfer the consequences of that onto someone who lacked the access to detect or fix it in the first place, by Upwork's design! It'd be like Uber requiring a passenger to pay an insurance claim, because their driver was involved in an accident and didn't have auto insurance.
    - freemint 5y ago
      Crypto transactions are not irreversible either. The law of the land can still force you to send money back.
    - tlogan 5y ago
      > What could the freelancer have done to avoid this? If contractors' time is tracked using Upwork tool then this problem will not exist.
      - ethbr0 5y ago
        Per the article, that would have required him opening a laptop during their meeting and twiddling the mouse around to prevent idle. Legally, that may impact. But practically and provably? I can't imagine he wouldn't be in the same situation, albeit with Upwork claiming they'd detected patterns of abuse during his claimed time, and still putting this on him. Or maybe not. Futures not taken, etc.
      - deleted 5y ago
        [deleted]
      - CRConrad 5y ago
        > If contractors' time is tracked using Upwork tool then this problem will not exist. But that's for countering the opposite problem -- when the contractor tries to scam the client. Here, the client is the scammer. And didn't TFA say that Upwork tried this tack at first -- but stopped that line of argument after he provided testimonials from the client that he had indeed performed the work?
        tlogan 5y ago
        https://support.upwork.com/hc/en-us/articles/211062568 https://support.upwork.com/hc/en-us/articles/211062568
        CRConrad 5y ago
        "Was this article helpful?" No.
  - tyingq 5y ago
    >Yes, but isn't this exactly what Upwork gets paid to take care of? I imagine the big value proposition for sellers is the marketplace/customers. But yes, they are being paid somewhat for vetting buyers. I'm not saying the freelancer should eat the costs. I am saying, though, that banks dropping 100%+chargeback fees on the merchant is pure bullshit. Basically, because of the fees, they MAKE money on chargebacks. And as mentioned, they know things like past transaction types, previous chargebacks, amounts, other current activity, and so on that the merchant doesn't. I think they should have to eat at least some of the costs when this happens. Especially when it's multiple transactions over time, like in this case. I'm pretty sure the technology behind detecting fraudulent transactions would be very different if the credit card companies and banks had to eat some of it. Current state, they don't even ask for an IP address for authorization of a payment. How does that make sense?
    - murderfs 5y ago
      I think you're misunderstanding the structure of the credit card system a bit. > And as mentioned, they know things like past transaction types, previous chargebacks, amounts, other current activity, and so on that the merchant doesn't. There's two banks in the flow: the issuing bank that issued the card to the customer, and the acquiring bank, which provides the merchant account. These are often (especially for online businesses) different banks. > I am saying, though, that banks dropping 100%+chargeback fees on the merchant is pure bullshit. Basically, because of the fees, they MAKE money on chargebacks. The issuing bank doesn't charge any fees, they just take their money back. The acquiring bank absolutely does not want to be making money on chargeback fees: they get fined by the card network if their chargeback rates are too high, and will fire you as a customer if you maintain elevated chargeback rates (and they're certainly not going to do a 100% fee on $12.5k. It's usually a fixed amount that's putatively paying for them to deal with the issuing bank.). > I'm pretty sure the technology behind detecting fraudulent transactions would be very different if the credit card companies and banks had to eat some of it. Current state, they don't even ask for an IP address for authorization of a payment. A lot of the time, they do eat the fraud. Oftentimes, the issuing bank won't actually file an actual chargeback when their customer reports fraud, because they need to actually arbitrate the case, and if the cost of doing so is sufficiently large relative to the actual value, they'll just absorb the cost internally. I do agree with you that the state of online payment security is rather bizarre. The card networks have basically required chip cards for physical transactions by charging extra fees and pushing fraud risk onto the merchant if you swipe the magstripe, but they've done basically nothing about card not present online transactions.
- pcthrowaway 5y ago
  People on hacker news ask all the time for a use case for crypto. This is it. Irreversible transactions. If the client was paying with crypto, there would be no danger of reverting their transactions. Also, Upwork should drop their 'cut' of the contractor's work if they want them to work to pay back Upwork
  - Dangeranger 5y ago
    Irreversible transactions mean irreversible fraud. How does crypto solve for that? The solution here is to go to court, or more likely arbitration on this case. Crime continues to be part of business, you must account for it in your use cases, or you will get caught off guard.
    - hbbio 5y ago
      You're both right. Irreversible transactions by default seem a good thing. Court/arbitration is the right way when things go wrong.
    - wpietri 5y ago
      Exactly. This is a great example of where cryptocurrency has a relative advantage. If I'm looking to defraud, I'll prefer to do it via cryptocurrency because once I have the money, it's hard to get it away from me. That helps explain why fraud is so common in that space. It's easy to see that cryptocurrency is a big reason ransomware has spiked in recent years. I suspect the same is true for other sorts of financial crime. I'd love to know how much. But it's surprisingly hard to do a telephone survey where you ask people about their criminal choices, so I expect I'll never know.
  - Wowfunhappy 5y ago
    We've purposefully built the financial system to allow for reversible transactions, because it protects consumers and reduces crime. If the client had paid with stolen crypto (as they paid with a stolen CC), then, yes, the freelancer would have been paid, but the person whose money was stolen would have been screwed. If we wanted to build a financial system without those safeguards, we could do that, without using as much electricity as all the world's datacenters combined.
SkipperCat 5y ago
Upwork wants to play the game "heads I win, tails you lose". The credit card company is doing the same. Kind of sad that they'd be doing this. I do wonder what Upwork's contract with the credit card companies states. How long far in the past can a bank claw back payments? Shouldn't the bank have liability here? The whole thing is so interesting because each player has a fiduciary duty to validate payments and they all failed. The only person who was legit was the freelancer.
- nikanj 5y ago
  Which unfortunately means the person getting the shaft is the freelancer.

tyingq 5y ago

As a former merchant, I wouldn't argue that the freelancer owns this. But, I also don't think Upwork really "allowed the fraudulent transaction". The banks and credit/debit card companies allowed it. And they have a lot more contextual background information on the buyer, seller, and transaction than the merchant does.

jtbayly 5y ago
Yes, but isn't this exactly what Upwork gets paid to take care of? The only way that Upwork's actions are justified is if the author was complicit in this scam. In which case, he wouldn't have really been working, and he would have split the money back with Robin, the guy who "hired" him on Upwork. But in that case, Upwork would obviously kick the author off of Upwork, not ask them to continue working.
- ethbr0 5y ago
  The hierarchy of information and scale here, from most to least, seems to obviously be: banks, Upwork, freelancer. Or, to put it another way, requiring the freelancer to pay this begs the question: "What could the freelancer have done to avoid this?" To which the only answer is: everything Upwork is abstracting away and doesn't want their freelancers doing. Do a background check on the client. Obtain the client's actual payment methods and verify them with the bank. Etc. All of which are literally Upwork's functions in this arrangement, because like PayPal, they exist to centralize and decrease friction between two semi-trusting parties. And when that goes bad, it's bullshit for them to transfer the consequences of that onto someone who lacked the access to detect or fix it in the first place, by Upwork's design! It'd be like Uber requiring a passenger to pay an insurance claim, because their driver was involved in an accident and didn't have auto insurance.
  - freemint 5y ago
    Crypto transactions are not irreversible either. The law of the land can still force you to send money back.
  - tlogan 5y ago
    > What could the freelancer have done to avoid this? If contractors' time is tracked using Upwork tool then this problem will not exist.
    - ethbr0 5y ago
      Per the article, that would have required him opening a laptop during their meeting and twiddling the mouse around to prevent idle. Legally, that may impact. But practically and provably? I can't imagine he wouldn't be in the same situation, albeit with Upwork claiming they'd detected patterns of abuse during his claimed time, and still putting this on him. Or maybe not. Futures not taken, etc.
    - deleted 5y ago
      [deleted]
    - CRConrad 5y ago
      > If contractors' time is tracked using Upwork tool then this problem will not exist. But that's for countering the opposite problem -- when the contractor tries to scam the client. Here, the client is the scammer. And didn't TFA say that Upwork tried this tack at first -- but stopped that line of argument after he provided testimonials from the client that he had indeed performed the work?
      - tlogan 5y ago
        https://support.upwork.com/hc/en-us/articles/211062568 https://support.upwork.com/hc/en-us/articles/211062568
        CRConrad 5y ago
        "Was this article helpful?" No.
- tyingq 5y ago
  >Yes, but isn't this exactly what Upwork gets paid to take care of? I imagine the big value proposition for sellers is the marketplace/customers. But yes, they are being paid somewhat for vetting buyers. I'm not saying the freelancer should eat the costs. I am saying, though, that banks dropping 100%+chargeback fees on the merchant is pure bullshit. Basically, because of the fees, they MAKE money on chargebacks. And as mentioned, they know things like past transaction types, previous chargebacks, amounts, other current activity, and so on that the merchant doesn't. I think they should have to eat at least some of the costs when this happens. Especially when it's multiple transactions over time, like in this case. I'm pretty sure the technology behind detecting fraudulent transactions would be very different if the credit card companies and banks had to eat some of it. Current state, they don't even ask for an IP address for authorization of a payment. How does that make sense?
  - murderfs 5y ago
    I think you're misunderstanding the structure of the credit card system a bit. > And as mentioned, they know things like past transaction types, previous chargebacks, amounts, other current activity, and so on that the merchant doesn't. There's two banks in the flow: the issuing bank that issued the card to the customer, and the acquiring bank, which provides the merchant account. These are often (especially for online businesses) different banks. > I am saying, though, that banks dropping 100%+chargeback fees on the merchant is pure bullshit. Basically, because of the fees, they MAKE money on chargebacks. The issuing bank doesn't charge any fees, they just take their money back. The acquiring bank absolutely does not want to be making money on chargeback fees: they get fined by the card network if their chargeback rates are too high, and will fire you as a customer if you maintain elevated chargeback rates (and they're certainly not going to do a 100% fee on $12.5k. It's usually a fixed amount that's putatively paying for them to deal with the issuing bank.). > I'm pretty sure the technology behind detecting fraudulent transactions would be very different if the credit card companies and banks had to eat some of it. Current state, they don't even ask for an IP address for authorization of a payment. A lot of the time, they do eat the fraud. Oftentimes, the issuing bank won't actually file an actual chargeback when their customer reports fraud, because they need to actually arbitrate the case, and if the cost of doing so is sufficiently large relative to the actual value, they'll just absorb the cost internally. I do agree with you that the state of online payment security is rather bizarre. The card networks have basically required chip cards for physical transactions by charging extra fees and pushing fraud risk onto the merchant if you swipe the magstripe, but they've done basically nothing about card not present online transactions.
pcthrowaway 5y ago
People on hacker news ask all the time for a use case for crypto. This is it. Irreversible transactions. If the client was paying with crypto, there would be no danger of reverting their transactions. Also, Upwork should drop their 'cut' of the contractor's work if they want them to work to pay back Upwork
- Dangeranger 5y ago
  Irreversible transactions mean irreversible fraud. How does crypto solve for that? The solution here is to go to court, or more likely arbitration on this case. Crime continues to be part of business, you must account for it in your use cases, or you will get caught off guard.
  - hbbio 5y ago
    You're both right. Irreversible transactions by default seem a good thing. Court/arbitration is the right way when things go wrong.
  - wpietri 5y ago
    Exactly. This is a great example of where cryptocurrency has a relative advantage. If I'm looking to defraud, I'll prefer to do it via cryptocurrency because once I have the money, it's hard to get it away from me. That helps explain why fraud is so common in that space. It's easy to see that cryptocurrency is a big reason ransomware has spiked in recent years. I suspect the same is true for other sorts of financial crime. I'd love to know how much. But it's surprisingly hard to do a telephone survey where you ask people about their criminal choices, so I expect I'll never know.
- Wowfunhappy 5y ago
  We've purposefully built the financial system to allow for reversible transactions, because it protects consumers and reduces crime. If the client had paid with stolen crypto (as they paid with a stolen CC), then, yes, the freelancer would have been paid, but the person whose money was stolen would have been screwed. If we wanted to build a financial system without those safeguards, we could do that, without using as much electricity as all the world's datacenters combined.

SkipperCat 5y ago

Upwork wants to play the game "heads I win, tails you lose". The credit card company is doing the same. Kind of sad that they'd be doing this. I do wonder what Upwork's contract with the credit card companies states. How long far in the past can a bank claw back payments? Shouldn't the bank have liability here? The whole thing is so interesting because each player has a fiduciary duty to validate payments and they all failed. The only person who was legit was the freelancer.

nikanj 5y ago
Which unfortunately means the person getting the shaft is the freelancer.