is a Scam: Employers Beware

I had a small project that I wanted to get developed, so I turned to (This was a good move.) Then, one of the developers on Upwork suggested that I move to and I did. (This was the bad move.)

Both Upwork and have a “milestone payment” system, meaning that you pay a portion of the total cost of the project in advance—whenever the freelancer completes that portion. So, for example, if the total cost of the project is $2,000, you might pay your freelancer $200 for 10 milestones. On Upwork, however, if is a project is cancelled, abandoned, or abruptly ended by the employee/freelancer, then the milestones are not paid out to the employee. They can be refunded to the employer. On, however, the employee can run away with the milestone payments and to make matters worse, charges you 3% on the cost of the entire project—even if you did not pay for the project. So, for example, if I paid $2,000 for a project, paid $0 in milestones to the Freelancer, I’d still be charged a non-refundable $60! So now if I need to find another Freelancer and he doesn’t work out, that’s another $60, and so on. Upwork does not penalize its customers in this way.

This is one of the reasons that I call a scam. How can a business charge 3% on a fee that was not even paid to them? It’s just an imaginary cost that wasn’t even paid out. (If it was paid out and the project was complete, then it might be fair for to charge the fee, though I’d personally still use Upwork instead.) And here’s the kicker.’s Fees and Charges page says the following:

For fixed price projects, a fee of 3% or $3.30 AUD (whichever is greater) is levied at the time a project that has been awarded by you has been accepted by each freelancer you award. If you subsequently pay the freelancer more than the original bid amount we will also charge the project fee on any overage payments. (

So that means that if your original project cost is $2,000, but you and your employee decide that it should be upped to $2,500 at a later date (maybe because some extra work has been done), is going to slap a tax on that as well. But if the cost turns out to be lower or if you cancel the project and only pay the freelancer, say, $10, then will still have you pay a tax on the original project fee—that is, $2,000. So even if you only pay out $10, you’ll still have to pay $60, but if you end up paying $2,500, then you pay out $75. Does this make sense, or does this smell of a scam? should only be able to charge people 3% on money that they have paid. They should not be able to charge 3% on a “potential” cost that hasn’t been paid out. I am surprised that no class action lawsuit has been issued against, but, if one is, I hope to be the first to be notified.

I should also point out that one of the reasons I was willing to pay the 3% at all was that I thought vetted its freelancers, made sure that they were from the countries that they claimed to be from and were who they said they were. But I discovered, after working with a Freelancer on who claimed to be from China that he was actually from Ukraine and his profile picture wasn’t even of himself, but of someone else. Because I speak some Mandarin, I tried to speak with him in Chinese, but he refused, telling me that he “needs to speak in English.” This is what led me to believe that he was for some reason trying to present himself as something that he wasn’t. (But this is neither here nor there. Just a little anecdote to end our article.)

For your own safety, use Upwork. Their milestone system is much safer and there are no scammy fees on projects. Also, if a project doesn’t go through, you won’t have to continuously pay 3% on an imaginary cost. (Just think about it: That is like telling a real estate agent that you would buy a house for $300,000, eventually buying that house for $100,000, and then the real estate agent demanding 3% of $300,000 and not $200,000, because you said you would buy it for $300,000 if you needed to.)

For reasons like this, sites such as probably exist.

It might also be the reason that Freelancer received 1.5/5 stars on Sitejabber as well. There are almost 2,000 reviews in total and all of them are damning.

Thanks to the Web site, you can also access a direct link to the consumer complaint page on Australia’s ACCC (Australian Competition & Consumer Commission) Web site. Although we do not urge our readers to take any action, we can at least admit that we ourselves have taken the time to file one of these complaints.