Beware of Scammers in Remote Work: How Not to Lose Money When Working With a Freelancer

What schemes can dishonest freelancers put you in? Is it OK to hire someone if only their username is known? Does a freelancer buy reviews or get them organically? Is it their genuine portfolio? Gulya Sabirova, Head of SMM at EasyStaff, will talk about fraud schemes and how to see through fraud when recruiting a freelancer to work on a project.

Behind the beautiful picture of freelancing there are often fraudsters ready to deceive the careless customer. The question of safety of financial resources becomes especially relevant, since communication and payment with the performer take place online. Before you start, you need to understand how great the risk of losing money is when working with a freelancer and what measures can be taken to minimize it.

1) Fraudsters do not have long-term accounts on freelance platforms, which would reflect past projects, detailed reviews (both good and bad), and a portfolio.

Of course, the low number of reviews itself is not uncommon: a freelancer may be a beginner. In this case, both the freelancer’s attitude to the project and willingness to work under the contract should be assessed.

2) The performer does not want to use the escrow and work under a contract. Most likely, this is an unscrupulous professional.

Working with an escrow account guarantees payment to the freelancer only after the work is completed, which, obviously, the fraudster does not intend to do.

3) The freelancer refuses to hand over their data or they use a no-name messenger, where the user can be found by username, not by phone number.

Most likely, you will never know their real name. There will be no name on social networks or freelance marketplace.

Some dishonest performers can bypass account verification on freelance platforms. First, they create a freelancer account, and then accounts of "customers". They offer tasks to the "freelancer" who supposedly fulfils everything and gets excellent feedback. Stuffed with good reviews, such accounts attract customers who are ready to cooperate on prepayment (for example, 20% of the total amount). After receiving the money, the performer disappears.

What to do? It is necessary to understand the cost of the project and the conditions of similar performers. You should contact several freelancers to compare their offers, and see what questions they ask and whether they require prepayment. Remember that a scammer will not do anything themselves. This will help you avoid financial loss.

If a performer rushes you and asks you daily if you are ready to start work, you should be wary. A good freelancer always has orders, and beginners don’t risk being too intrusive. Daily questions and obnoxious selling is a red flag. Most likely, you will pay money only to see the performer leave with it for good.

What to do? Honestly, the only thing to do here is to get rid of them. An intrusive executor who rushes payment and skips the process of discussing and evaluating the project is a scammer. Your feeling that the contractor is unreliable should be enough to refuse to work with them.

A freelancer wants to make sure they get paid. That’s why most exchanges today offer a ‘safe deal', i.e. their own escrow account where money is stored until the project is over. Nevertheless, some can assure that a given escrow service does not fit them, and an external service is proposed instead. The customer is offered to transfer the entire amount at once, which will be available to the freelancer after the task is completed. However, money is sent, the performer vanishes with it to never be seen again.

What to do? Escrow accounts are designed to protect freelancers in the first place. If a freelancer does not want to use the transaction within the platform, it’s a red flag.

A freelancer wants to appear reliable and experienced and adds other people’s projects to their account. In this case, there is a possibility that they simply cannot confirm their expertise with specific cases and use lies "for good". Most often this is a warning sign that the work will either be failed completely or outsourced. That is, the customer will pay 1.5x of the real cost of the project.

What to do? You should request several quotas from different specialists to compare prices and look at the work of other freelancers. In addition, it is important to ask technical questions, such as how exactly the projects were done and how they are going to approach your project.

When working with freelancers, it’s important to have a well-drafted contract in place to protect both parties and clearly define the terms and conditions for the project. Here are some key elements that should be included in a freelance contract:

1. Scope of Work: Clearly outline the specific tasks, deliverables, and project requirements that the freelancer will be responsible for.

2. Deadlines and Milestones: Specify the timelines for completing the work, including any interim deadlines or milestones, if applicable.

3. Compensation: Define the payment terms, including the rate (hourly, project-based, or flat fee), payment schedule, and any additional expenses or fees that may be incurred.

4. Intellectual Property Rights: Address ownership of the work product, including any copyrights, trademarks, or patents that may be created during the project.

5. Confidentiality and Non-Disclosure: Include clauses to protect any sensitive or proprietary information that may be shared during the project.

6. Termination: Specify the conditions under which either party can terminate the contract, as well as any provisions for early termination or breach of contract.

7. Independent Contractor Status: Clearly state that the freelancer is an independent contractor and not an employee, to avoid any potential misclassification issues.

8. Indemnification and Liability: Outline the parties' responsibilities and limitations of liability in case of disputes or legal issues.

9. Governing Law and Jurisdiction: Specify the governing law and jurisdiction in case of any legal disputes arising from the contract.

10. Additional Clauses: Depending on the nature of the project, you may also want to include clauses related to non-solicitation, non-competition, or ownership of materials and equipment.

It’s generally recommended to have a lawyer review and customize the contract to ensure that it accurately reflects the specific terms of your agreement and complies with applicable laws and regulations. Clear communication and a well-drafted contract can help prevent misunderstandings and protect both parties throughout the freelance engagement.

Conclusion of a service contract is a necessary step to protect copyrights. The document should regulate the terms of use of the final product, as well as agree on the transfer of rights to the customer. In addition to a service contract, a non-disclosure agreement (NDA) can also be created and signed to protect confidential information.

It is expected that the freelancer will not post your project in their portfolio for a certain period of time after the work is completed. For example, if a freelancer did a photo shoot for you, they cannot use those photos without your permission. A freelancer can talk about the project, but is not allowed to sell it on photo stocks, for example.

For large projects, such as computer software, a patent may be required after a service contract and non-disclosure agreement. This process varies from country to country and should be handled by the customer.

If a freelancer doesn't want to work through an escrow account and demands all the money up front, then it's not a suitable contractor. By using an escrow account, you can significantly reduce the risks of losing money. The money will be sent to the contractor only after you are satisfied with the quality of work.

If you cooperate with the performer directly, then special escrow services are available. Usually customers deposit funds for the project with a small commission equal to 10%.

Liars and dishonest performers have always been in every walk of life. There are standard schemes by which you can figure out an unscrupulous freelancer and avoid unpleasant cooperation before it is too late. Along with these red flags, you need to pay attention to your own gut feeling. If you do not like what the specialist asks and how they behave in chats online, this is a sufficient argument to stop communicating.

June 21, 2024