Posted on Oct 09, 2020
11 Common Freelancer Scams and How to Avoid Them
In recent years, there has been ever-growing interest in freelance work and it has rightly also led to more concern about freelancer scams. Taking advantage of people in need of jobs or a side income, scammers pretend to be employers (or even “helpful” fellow freelancers) to trick workers into giving away their information and money.
So as an independent contractor, how can you recognize freelancer scams and protect yourself? This post will take you through 11 of the most common scams along with tips as to how you can avoid them.
❗ Disclaimer: Below are some experiences we've heard of from freelancers, they're not absolute signs. Please bear this in mind as you read and reflect on your own experience.
1. An easy job for a high pay
If you come across a job posting that is simply too good to be true, it probably isn’t a legitimate job posting. In a freelancer scam like this, you probably won’t get the advertised payment for your service. In some cases, the “client” might not even be looking for your service altogether — they may be trying to take your information or bring you into a pyramid scheme.
Tip: Do your research thoroughly
To avoid falling into this trap, you should have a good grasp of your field. Browse a lot of job postings and find out the average rate and the common responsibilities of your ideal job. This way, you’ll notice when something is unnatural. For instance, you will find that $1,400 is a reasonable fee for a developmental editing project, but it’s peculiarly high for a remote proofreading job.
You might also find that legitimate freelance jobs tend to be posted on marketplaces that focus on certain niches rather than general platforms like Upwork, Fiverr, or Freelancer.com.
2. Having to pay for access to work
A scam of this kind comes in several forms. The client could ask the freelancer to pay a deposit or, more commonly, they could make it a requirement for them to buy something to set up your workstation so you can easily work from home. It might be a software or product of theirs that they claim is crucial to the project. Regardless, they make you send money in order to do your job.
❗ Note: This is different from paying sites like Upwork for extra bidding powers. Money paid to such sites is optional, not compulsory.
This is uncommon practice for any industry. If the client truly needed you to have access to some specific resources to complete their project, they would’ve stated that in their job description and possibly provided it to you on their own terms.
Tip: Never pay to start working
The solution to this scam is simple: decline any offer that asks you to pay!
3. Requests for extensive communication off-platform
A lot of new freelancers work on sites like Freelancer and Upwork — and if you do, you’ll know that conversations, work delivery, and payments are usually made through the platform. Reedsy also provides collaborative channels that help you keep track of your work progress. Should any problem arise, you can always go back to find solid evidence to back your complaint.
As such, when a client asks to discuss work extensively off the platform, you should raise your guards. With the exception of quick Skype or Zoom calls to get to know one another or better flesh out the project, being asked to communicate off-platform should raise major red flags.
Tip: Stay on professional channels of communication
The best way to keep yourself safe is to say no to clients’ requests to use a different platform when it comes to work. You can still have calls with them — but always make sure that you write down any important work-related agreement made and send it to them for confirmation after the talk. Other than that, work discussion and exchanges should happen on your chosen freelancer platform to keep your project safe.
For those who don’t use freelance sites, be sure to have a professional email account reserved for freelancing before you get started. It’s better to be safe than sorry — you don’t want to use private accounts and give away personal information by accident.
4. Unnecessary “test” projects
Test projects are by no means all scams, which is why avoiding this trap will be a bit tricky. When a client is interested in your profile but you don’t have a lot of experience to go with it, the client may ask for you to complete a task or two as a test. Usually, this is a chance for beginners to demonstrate their abilities.
However, this recruitment process can also be exploited by those who don’t want to pay for your service. By asking freelancers to send in their sample work, the client can have satisfactory products without having to spend anything. All they’d have to say is that you weren't the right match for them, and they’ll choose another freelancer.
Exploitative projects tend to be more complex and time consuming than a regular test. They’d also likely come from independent employers or small enterprises who don’t clearly outline the recruitment process in their job description.
❗ Note: Many job marketplaces vet their applicants through tests. If the purpose of the test is clear and the site is reputable, it's probably not a scam.
Tip: Send minimal free samples
Being asked to send a sample is not completely unreasonable, as it is a way for clients to gauge your ability. However, for a freelance gig, this sample should be a relatively small task compared to the project described by the client. Requests for more than one assignment is not a good sign.
5. The proposal for a shared Upwork account
One of the commonest freelancer scams is this: a client or fellow freelancer approaches you, claiming they could help you make thousands of dollars using your existing Upwork or Freelancer.com account. All you have to do is give them access to it — share it with them — and they’ll do some tech-wizardry to grow your freelance business and bring in the cash. Once that happens, you’ll split the gains.
If you agree to this proposal, this new “partner” wouldn't be doing any growth hacking for you — though they would get access to your bank and ID information. Moreover, they probably will drag you into more elaborate scams as an accomplice (more on that in scam #6).
Tip: Never share your work accounts with anyone
When you receive a proposal like this, ignore it. If they wanted to growth-hack something, they would’ve focused on their own sites.
💡 Want to be a more successful freelancer? We have a post outlining 20 powerful freelancing tips you might find helpful.
6. The unsolicited cheque
In this scam, the client mails a cheque to you before you even do any work. They might say that it’s a prepayment, and the cheque’s value could be even higher than your quote. Perhaps they claim it includes another worker’s pay, or money that you should send away on the company’s behalf. The “client” will even provide you with details of this third party — profiles they’ve tricked other freelancers into sharing with them — so everything appears believable. What you’d have to do is cash out the money and deposit it to a given account.
If you think this all sounds fishy, that’s because it is. You’d find, after you’ve cashed and sent the money away, that everything came out of your account. Your “client” has sent you an illegitimate cheque to trick you into sending them money. More importantly, this is most definitely part of a money laundering or tax evasion scheme that you do not want to be dragged into.
Tip: Settle on a reasonable and clear payment plan from the outset
As early as the moment you send your freelance proposal, map out a clear payment schedule. When signing a work agreement, make sure there’s a section of payment plan, and accept money according to that outline only. Anything that’s out of the ordinary should be double-checked or ignored.
7. The tax document ploy
Dealing with taxes as a freelancer can be confusing, a fact that this ploy takes advantage of. What a scammer would do is ask for personal information (such as social security number, or its equivalent in your country) to fill out tax forms confirming that they have paid you.
In the US, this is a necessary step if the client pays you over $600 in a year. Hirers have to fill out a 1099-NEC form for every independent contractor they pay at least that much. If the total payment in a year is under $600, there’s no obligation to fill the form. In other words, there’s no need for you to share your personal information if that is the case. If a client insists that you do, they’re probably up to no good.
Tip: Get paid through PayPal or Stripe
It goes without saying that you should learn how to manage your tax as a freelancer — but here’s an extra tip for US-based freelancers. Online payment processing platforms like PayPal and Stripe fill in 1099-K forms for all transactions — make your life easier by using them. At Reedsy, we favor a hassle-free solution for our users, so all transactions are made via Stripe.
8. Unusual forms of payment
Another payment-related red flag for freelancers is when clients offer to pay in an unconventional method. This includes gift cards, crypto currencies, and goods and services that they may or may not have produced themselves. Such payments suggest that the client is either not very serious about the project, or they don’t have the financial capabilities to fund it.
Obviously, we don’t operate in a bartering economy, so those methods of payment you wouldn’t typically accept. Of course, if the offer is of value and you are indeed interested in it, feel free to put it in your contract. If not, our tip here is similar to the previous one: stick to well-known channels like PayPal or Stripe.
9. The lack of a mutually confirmed pre-work agreement
Even if the project is small and its duration short, you should always have some form of written agreement. This document outlines the project’s deliverables, the expected timeline, and the payment information. Not only is this for your protection, but it also helps you keep track of your paperwork.
If a client refuses to acknowledge this agreement, be wary. This is another warning of their lack of either funds or seriousness, and it’s not something you want to deal with half-way through your work.
Tip: Don’t start work until there’s a confirmed agreement
If your client hasn't confirmed your project agreement on paper, politely let them know that it's your policy never to start work until there's a clearly documented, mutually accepted arrangement. Remind them to send their confirmation. A client who has never hired a freelancer before may be unfamiliar with contractor etiquette, and a polite reminder may be all they need. If you still get no answer, feel free to move on to another project. If they do, great for both parties: the work can begin!
10. Other kinds of identity theft
We’ve mentioned identity theft several times before, although it’s an important enough issue to warrant another note. A common form of identity theft is fake job postings that ask for more information than necessary, perhaps in the name of vetting their workers. Your clients usually have no need for details such as your social security or identification number, credit card information, your date of birth, and even your address, so steer clear of people who ask for them without really good reason!
11. Freelancer sites’ mishaps
As you might’ve guessed, a lot of these scams happen on freelancer sites such as Upwork, Fiverr, and Freelancer.com. They usually do have some safeguard measures to keep scammers from accessing the website, but there are cracks to slip through. There are plenty of shared account proposals made on Upwork and Freelancer.com. There are also incidences of unverified, unauthorised users hiring freelancers. Being a highly accessible community sometimes comes with a cost.
Tip: Look for protection policies and site reviews
Before you sign up to a freelancer community, check out their policy regarding payment and project protection. Not every site will have a clear, helpful policy — and it’s best to avoid those. You can also look for reviews of these sites (or try searching “freelance scams” on Reddit) to get an idea of how safe they are. At Reedsy, all projects are to be done with contracts, and our protection policy ensure that violations will be met with appropriate consequences.
Hopefully, this list of freelancer scams have shed light on the various ways that you can be taken advantage of as an independent worker. It may seem daunting, but remember that for every con artist out there, there many more enthusiastic clients searching for your talent!