Virtual Traps: Freelance Fraud on Popular Platforms

The IT freelance world is diverse and well-established but still full of dark corners and scam traps. If you work for yourself and don’t sign any agreements, no one has to protect you — and, alas, no one will.

Freelance options for the IT crowd

Quite a lot of offshore developers prefer registering at marketplaces — bidding or vetting. Most of them protect specialists they connect with entrepreneurs.

 There are bidding marketplaces for those wishing to offer their services by the reverse auction model. Their clients propose projects and pick developers who suggest the best/lowest price.

Those who’ve already reached the Middle or Senior level and crave confidence or regular payments can enter a different world of vetting platforms. Their staff prechecks all the developers and offers regular projects for the desired rates. 

Nevertheless, many freelance experts prefer working alone (without affiliation with companies or platforms) or violating the safety rules of marketplaces they’re connected with. 

And here’s where downsides begin.

Everyone can fall victim to scammers

You are even more prone to foul play in the online world than offline. No one knows you are a dog on the Internet — you’ve probably heard this catchy phrase, right? Let’s make it even more general. No one knows who you are on the Internet because you are just your digital footprint — open to modification and erasing. Is it good? Yes. Is it bad? Even more, yes. 

When online, you’re much less scam-protected because the trespassers are extremely hard to catch. Besides, virtual legislation is still pretty porous and vague in some countries — so online scammers do their dirty tricks repeatedly, with no fear of being caught. 

There’s one more underlying cause for freelancers’ fragility. Quite often, they are trapped in some kind of legal void. On the one hand, offshore workers are constantly employed and perform tasks for money. On the other hand, they change affiliation very often — so they’re technically free of any protection mechanisms the full-time employers are bound to provide. Contracts they sign are frequently too basic to include some scam-proof clauses.

Below, we’ll describe seven illegal schemes that are extremely popular in the troubled waters of the online business world. They are anything but new, yet getting more and more new unaware victims. 

Seven traps to avoid

1. A check scam 

The scheme is plain and simple. After you start freelancing for the company, it sends an official note with a branded letterhead and a check — allegedly, for you to cover some work expenses (for buying furniture, stationery, program tools, etc.) 

You deposit the check and pay your money via some peer-to-peer transfer tool. 

And then… you got a message that your bank account is overdrawn by a few thousand dollars you took out of your pocket. Naturally, the check was a scam, and the whole situation turned out to be a money ramp. Of course, your “generous” employer vanishes in the thin air and is gone for good.

To protect yourself, check the checks twice! An even better option is avoiding suspicious transactions before building 100% trust. 

2. Account hunting

Fraudsters of that kind hunt for active Upwork and Freelancer users with long-established accounts, many closed deals, and considerable money flow. All the mentioned features add up to online credibility — alas, quite malignantly used for sending phishing letters. Account owners who become scam accomplices urge their beguiled customers to send money via peer-to-peer transfer apps (Venmo, Zelle, etc.) — and get their loot cut.

Quite often, customers get messages and requests about accounts on the other job platform: e.g., Upwork users can get mails from swindlers asking about Freelancer profile and vice versa. 

Both scams have at least one thing in common: con masters invite future victims to use third-party transfer or communication apps. Here’s where the gray legal zone begins.

 Freelance platforms declare their responsibility for any in-platform transactions and interactions. As soon as you step aside, the companies in question can’t monitor any suspicious activity — they just don’t have access to it. And that’s the legal loophole for online robbery.

If you agree to take a step off the reputable platform (accept the Skype/WhatsApp calls, create a side profile), your troubles will no longer remain platform issues. What’s more: you were warned about it, so your recklessness is the primary reason for the following dire situations. 

Upwork and Freelancer have their on-platform phone and video messaging tools. To avoid going off the legal coverage, the customers should just stick to this option, abstaining from any other. 

3. Asking for account access

There’s a particular sort of scammers who ask for passwords and logins of your long-unused accounts — sometimes for money.

Remember that you probably have sensitive information, even if the account is dead. Freelancers fill in their bank account details, personal data, profile links, contact phone numbers, and mailing addresses. With some help from information retrieval pros, digital fraudsters will be empowered to do many dirty deeds.

4. Personal information theft through tax documents

In most cases, on bidding platforms, you won’t need to give a client any type of tax documents — so if you come across clients who urgently need a tax form from you, beware: it’s 100% a scammer wishing to steal your data. If your clients plan to pay you through an electronic payment service (PayPal or the like), you won’t need to submit any documents. 

If you’re working outside of a freelancing platform and you’re uncomfortable with giving up your SSN or other information to scammers, request all payments go through PayPal. At least until you’re sure you can trust the client with your information.

Finally, if you get a tax form to fill in (for example, on vetting marketplaces), it’s crucial to notice the differences between fake and real documents. A genuine tax form will never come as a Microsoft Word document. IRS won’t ask you for your bank account number and PIN. They won’t ask you to send the form to the private email address either. Here you can see some examples of fake tax forms with explanations.

5. Suspicious payments

Some clients try to scam freelancers by offering unusual payments. These can include alternative forms of remuneration (goods and services instead of money) or non-traditional methods, such as gift cards. If you’d like to stick to the legal field, select a few reliable options and don’t accept the ones you don’t trust. Payoneer, PayPal, Wise, or a bank transfer should be enough.

6. Unpaid test projects

Sometimes, scammers suggest completing some test projects to check your skills. If your future employee likes what you did, they will provide you with more work and offer a competitive salary. It’s not always a scam — sometimes, even reputable companies offer unpaid test projects — but the scam statistics are still relatively high for this option. 

Frequently, such foul players don’t even want to hire anyone — they just look for specialists who fall into the trap and provide hours of unpaid quality work. Ten cheated “volunteering” freelancers can complete a rather complicated project — but you surely don’t want to be one of them, so you’d better reject all the unpaid test projects and stay safe.

7. Paying to start working

A shady client can ask you to pay for some preparatory steps before starting. They can request money to access specific resources or buy particular programs.

If you didn’t learn about it from the job description, you’re probably talking to the scammer who devises their money-stealing practices on the spot.

Conclusion

The main takeaway is quite simple:

• Don’t pay in advance, don’t work unpaid;
• Stay on the platform, pay on the platform, communicate on the platform;
• Don’t disclose your personal information to Tom, Dick, and Harry (most probably, all three are scammers);
• Don’t sell your accounts to shady wheeler dealers.

We sincerely hope our tips and warnings will help you keep scammers at bay. 

If bidding marketplaces seem too scam-prone for you, try vetting platforms for seasoned freelancers: their check and control mechanisms are pretty reliable.

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