[nothatscool]

>The customer paid Upwork using someone else's card, he didn't pay the freelancer. So the party that got duped is Upwork.

For me that is the key here. Upwork is the one accepting payment so it's their responsibility to verify that payment. It's actually impossible for the freelancer to do that.

[wpietri]

If the freelancer had taken a credit card directly, he would be in the same situation as now.

[jrochkind1]

Was it literally someone elses name on the credit card? Perhaps the freelancer would have rejected the credit card as payment for this or other reasons if they had taken the card directly. Who knows?

Also they would be fighting with the credit card company against the chargeback -- whether and how much they can take back in situations like this depends on the nature of your agreement with the credit card processor, and whether you followed it -- that is, whether Upwork did. Perhaps the freelancer would lose if they had directly charged, but it would be their fight to have. Instead, they are just told by Upwork they owe Upwork money now, because it was Upwork that took the card, not them. But sure, maybe they'd have ended up in the same place anyway, it's true. They would have at least known they were responsible for vetting the credit card themselves -- which you can't be when you never even see it because Upwork is the one charging it.

[ratww]

If the freelancer had taken a credit card directly, they would have been in the position to check with the card holder for proper authorisation beforehand, or to deny in case it looked shady.

Plus, the freelancer would be able to just sue the person they were working for directly, rather than having to sue Upwork, risking his ability to continue working there. If the freelancer didn't know client personally, it would have been impossible.

Back when people used checks, it was common for companies to either deny third-party checks or ask for the buyer sign the check over to someone else. This would put the buyer on the hook in case anything bad happened.

Marketplaces just removed all those protections that sellers could implement, while taking none of the risk.

[akudha]

Can you explain why this matters here? The issue is that Upwork was/is responsible for taking payment from the customer, keeping their cut and paying the freelancer. If they got duped, they should eat the loss. Whether the freelancer is or isn't able to collect payments correctly on his own, is irrelevant here.

Freelancing websites go to extreme lengths to monitor freelancers - including installing monitoring software, taking screenshots every minute etc. Why can't they spend some of this effort making sure they aren't duped, and when they are duped (it will happen at some point) why can't they go after the person who cheated them instead of the little guy?

[nothatscool]

But he would have had the opportunity to manage the payment himself whether that be not accepting credits cards, using a payment processor with charge back insurance or at the very least trying to verify that the credit card actually belongs to the client. As far as I know he can't do any of these things because the client isn't paying him, they are paying upwork and upwork is paying him.

[tzs]

All that is actually required to charge a credit card is knowing the card number. (Some people think the expiration date is required, but it is not. The expiration date is only checked at the payment processor, and there it is just a simple check that it is in the future. You can just make up any future date when submitting the card and it will work).

However, when submitting the card you can supply name, address, and CSC (and maybe telephone number?) and ask the processor to check those. Those will be checked against what the card company has on file.

Details vary between payment processors, but all will have a way for you to bail out of charging the card if you don't get matches on a subset of those fields you chose.

Like most things with credit cards, those checks aren't free. If you are using a payment processor where you see all the little fees it will cost you a tiny amount to do the checks, but if you are with one of the processors that bundles it all together into tiers the fees for checking will almost always not be enough to bump a given charge up into the next tier.

The only real downside of doing the checks is that the more data you make the customer enter, the higher the chance they will not complete the purchase. If you are doing something that has an extraordinarily low chance of attracting people who are using stolen cards and the transaction isn't for a very large amount it might be worth it to not do the checks.

For everything else, you should do the checks and if things don't check out do not accept the card.

[Macha]

This is true, but surely dealing with these issues is part of what upwork takes their share of the revenue for?