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Elance + net-ARB.com
Zero Buyer protection on Elance

 10:11 am on May 31, 2011 (gmt 0)

Hi everyone,

Consider this scenario:

1) You post a project on Elance and select a provider.
2) You deposit money into Elance's escrow system (as recommended by them) and start the work. Most providers will insist on an advance - you deny that and play safe.

3) A few weeks later, the project deadline passes and provider has not delivered.

4) They don't deliver even after couple of extension and you decide to cancel the project.

5) You ask for a refund of money in Elance's escrow (which you thought was a very safe place).

6) Elance tells you to go to an arbitration website to start a dispute.

7) They tell you to pay $200 fee before they can start a dispute and you have no luck if other party doesn't respond to a dispute.

8) Meanwhile Elance will NOT do anything to intervene and will simply absolve themselves of any responsibility for your misfortune.

Now for the interesting part:

The arbitration website doesn't have any information on the company on their About Us page nor does it have a contact us page. A whois query lists an individual and not a company (specifics removed).

This is NOT even a company but just an individual and Elance is asking me to send $200 to this guy who will decide whether Elance should release Escrow money or NOT?

Is it just me or you find it strange too?

[edited by: LifeinAsia at 2:00 pm (utc) on May 31, 2011]
[edit reason] specifics removed [/edit]



 2:10 pm on May 31, 2011 (gmt 0)

Hi and welcome to Webmaster World [webmasterworld.com]!

Although not having much information about the company or decent contact information on the site does raise a red flag, just because a domain is registered to an individual does not mean there is not a company behind it. I have seen many company domain names that were registered by individuals.

I have never used Elance, so I have no firsthand experience with them. I briefly looked over their Terms of Service, and depending on the dates and amount of the job, your experience does seem to be in line with their policies. Hopefully, you can get some feedback from others who have gone through their arbitration process.


 3:53 pm on May 31, 2011 (gmt 0)

Take it up on the Elance message boards. Lots of helpful people there and Elance staff will respond. They're there all the time.

They will also try to call you, which you should do if they don't.


 3:17 pm on Jun 1, 2011 (gmt 0)

Its not how it works with RAC/VW - I have always thought they were best for buyers and eLance better for contractors.

If you used a credit not a debit card (Which you always should online) you can simply charge back the amount on the grounds the goods were not delivered, its that simple, I do it regularly, you are not contractually bound to use arbitration.


 3:33 pm on Jun 1, 2011 (gmt 0)

If you used a credit not a debit card (Which you always should online) you can simply charge back the amount on the grounds the goods were not delivered, its that simple, I do it regularly, you are not contractually bound to use arbitration.

According to Elance's ToS, it sounds like he IS bound to use arbitration in this case.

As a merchant, I have a serious issue with anyone who issues a credit card chargeback simply to circumvent the ToS that they agreed to when making a purchase. In this case, since the OP is not agreeing to arbitration (which is part of the ToS), I'm not sure that he would win the chargeback. And most likely, Elance would deduct the chargeback fees from any refund issued.


 5:54 pm on Jun 1, 2011 (gmt 0)

I'm with aspdaddy - make sure you use a credit card. Chargebacks are much easier.

I had a recent issue with Elance where the provider disappeared without finishing the project. A few months later he re-appeared and submitted for payment. I told Elance several times that he did not finish the project (I did not approve any milestones), but I keep receive outstanding invoice notices.

Fortunately, I did NOT pre-fund the project. I strongly suspect that had I done that I would be out my money. In the future I would recommend to always use a credit card (never a debit being used as a credit card) and to not fund the Elance escrow.


 3:25 pm on Jun 2, 2011 (gmt 0)

It doesnt matter what a ToS states, it has no legal status, you cant just remove statutory rights by writing it into a ToS.


 3:12 am on Jun 10, 2011 (gmt 0)

Fortunately, I used Paypal (backed by a credit card) so if it all goes wrong, I will have no option but to resort to a chargeback on the grounds that I have received NO service at all.

I have also alerted BBB and they are keeping an eye on the situation as well.

Elance has been a bit helpful since then and they are paying $200 on my behalf to Net-Arb for them to resolve the issue. Net-Arb is getting paid $600 to resolve this - they tell me that their arbitration has been upheld by Australian courts which I find unbelievable as I have been following any court cases following internet in Australia (very few of them to begin with) and have not heard of net-Arb.

Net-Arb has been sending a few emails - I find their tone a bit rude and funny as they try to be an internet version of Judge Judy :)

Just imagine you posted a project on Elance and got yourself into this mess! not even worth your time that waste in resolving issues. In our provider had NO intention of delivering the project and they know buyers have to go through a lot before any money can be recovered hence they will try to walk with their money at the first opportunity.

Lets see how this goes in the end - we have lost $1250 and received nothing in return and still continue to waste our time.

I wound how many buyers will return to Elance after this experience.

Will keep you posted on how it goes!


 3:13 am on Jun 10, 2011 (gmt 0)

And I agree with aspdaddy. Terms & conditions on webpages are as good as NOTHING.

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