Extortion OK, Chargebacks Not
Last Friday, Guru.com suddenly and without warning shut down our account.
We were a well established vendor on Guru.com. In fact, we were consistently ranked a top-50 vendor of nearly 50,000 vendors in the Programming & Databases sector, reaching the top 25 at one point. If we hadn’t opted to take on a major project outside of Guru.com that kept us from doing new business there for most of the past year we’d have reached the top 10 with ease.
Surprise! You’re Done Here.
What was really surprising is that after 5 years of working with Guru.com and being a top ranked vendor, they terminated our account with no warning. No email, no phone call, no communication of any kind. We simply logged into the system in an effort to communicate with a client that we were working with and could not log in.
After ruling out technical issues we emailed Guru.com. 36 hours later they responded “you did a chargeback so we closed your accounts”.
Wait. What chargeback?!
We called Guru.com and got in touch with Julie, the customer service representative for freelancers. She said there was a chargeback of $690 on a Guru account for XYZ.com (we changed the name for the privacy of our client). As we pointed out to Julie; XYZ.com was a company we knew quite well, we had just finished an 18 month stint there as interim CTO, but we are not XYZ.com.
While working as CTO, we setup a Guru.com employer account to assist in locating additional vendors to work on their project. When setting up the Guru.com account, we used the corporate American Express card that XYZ.com put in our name to facilitate purchases. It was that very card, with our name on it as “CTO, XYZ.com LLC” that was the source of our problems.
Three months after we finished our contract with XYZ.com, they had a problem with a transaction at Guru. THEY had requested a chargeback on their account, not us. We brought this to Julie’s attention but she either didn’t understand or didn’t care.
It turns out another Guru vendor had extorted money from XYZ.com via the SafePay Escrow System. Even though the money was in Escrow and it is against the Terms of Service, the vendor insisted that NO WORK would be released under any circumstances unless XYZ.com released $690 of a $2000 project.
Vendor Extortion Letter
Private DB Message:
– From: ABC Vendor (name changed) (Pro ID: 1063060)
– Project: Create Flash Homepage For New Website (Project ID: 568291)
How do you expect us to send you files without pre payment.
You know thats our only protection.
Here is the updated presentation, please download here (note: a demo file, not the work due).
The work that was finally released turned out to be incomplete, sub-par, and not even close to the deliverables requested. When XYZ.com asked for a refund from the vendor they basically said “too bad”. XYZ.com brought the complaint to Guru.com and even had written extortion letters from the vendor. Guru also said “too bad, you released the money, we won’t help you”.
XYZ.com, rightfully so, initiated a charge back through American Express. Guru did NOT serve their best interest and after months of discussion refused to help, even though clear violations of the vendor and SafePay Escrow policy were evident. Guru.com refused to assist in the matter so XYZ.com requested a chargeback as suggested by American Express.
The truly amazing part of all this is not only did Guru.com refuse to assist XYZ.com with a clear case of extortion and violations of the Terms of Service, they allowed the other vendor to remain online as an active vendor in their system! We know this because XYZ.com came to us for assistance after we had finished serving in the CTO role. We researched the claim and lo-and-behold, the vendor was still online and now requesting funds up front to start projects from other potential clients. Even more amazing was just a month ago the very same vendor bid on one of Cyber Sprocket’s projects we had posted through our Guru.com employer account, bad feedback from other problem projects intact in their profile!
Chargebacks Are Not OK
So what happened next? Guru.com got the chargeback for $690 from XYZ.com and immediately shut down ALL accounts associated in any way, shape or form with XYZ.com. This included Cyber Sprocket Labs, simply because our name appeared in both places.
Nevermind that XYZ.com is a separate entity owned by a different individual. Nevermind that the credit card was an XYZ.com corporate card. Who cares that the tax ID on file, the address, the company name, and the primary contacts had nothing to do with Cyber Sprocket. Forget the fact that Cyber Sprocket Labs had perfect 5-of-5 star ratings in all categories on Guru.com for the more than 5 years we were there. We never had a chargeback, never a complaint, and brought more than $10,000 in revenue into Guru.com. Guru made up their mind, they were kicking us off the site.
They also could not grasp the fact that XYZ.com was a client of Cyber Sprocket Labs, NOT part of Cyber Sprocket Labs. We brought XYZ.com to Guru.com because we told them how great we thought Guru.com was. Maybe we were wrong, but that was our thought at the time. In 5+ years we NEVER had a problem with Guru.com, often worked with good vendors, and rarely with bad clients.
No Explanation Good Enough
No matter how we tried to explain the situation, or offered to send evidence that the companies are truly separate, Guru.com didn’t want to hear it. We even spoke with XYZ.com and their CEO agreed to talk to Guru.com about the situation.
XYZ.com CEO Email
Can you have them call me?
How can the XYZ.com account have anything to do with you?
– Joe Owner
Guru.com would NOT consider the case saying “we do not see the benefit in talking with Joe Owner” (Joe Owner is our pseudonym for the owner of the company). Their response was that we must reverse the chargeback. Sorry, but we cannot do that. Only XYZ.com can do that. We have no authority because it is not our card. We did not initiate the chargeback. Julie at Guru.com didn’t care. As with our client and the extortion case, it was not Guru’s problem.
XYZ.com CEO Email
Good afternoon. I apologize for the inconvenience. I received your email with Joe Owner’s message. I do not see the benefit in talking with Joe Owner unless he was willing to retract the chargeback; that is the only way we can reconsider reinstating your accounts. A chargeback is a violation of our Terms of Service and anyone and associates taking such action cannot be allowed on our platform.
I have contacted your Employers (Project ID: 604703 and 119413) regarding the outstanding payments. You are free to work with them outside Guru.com. If they decide to pay you via Guru.com for the outstanding Escrow and Invoice, we will forward the payment to you. If not, we will return the payment in Escrow to the Employer.
I will inform you when I hear from your Employer as to what they decide to do with regards to the payments.
Guru.com Focuses On Their Profits
One thing is certain, Guru.com has made it very clear where their priorities are these days. The shift in corporate mentality is obvious. What was once a mission to provide fairly priced high quality consulting services has now become a mission to make more money for Guru.com.
How do we know this? For starters, they allow a vendor to stay online after documented extortion (that makes money for Guru.com) yet kick us off for being very loosely associated with a chargeback (Guru.com loses money).
Secondly, Guru.com has made a very notable policy change that goes into full effect this July. They are changing a well-designed and well-liked ranking system based heavily on ratings and past performance to a system based purely on revenue earnings. That means someone that does poor work but can close $10,000 in deals because they are low priced ranks higher than someone that does great work but only generates $5,000 in income. Ask any of the top-rated vendors on Guru.com what they think about the system & they’ll tell you its a bad idea.
Guru.com Policy Change Notice
Thus, the very concept of Rank hinders the success of the majority in favor of a select minority – regardless of which factor is used for the primary sort. In contrast, Guru.com genuinely wants every Freelancer to have an opportunity to be a winner – not just a select few.
So What Will Change on May 8?
Guru Freelancers can expect to see initial adjustments for the removal of Rank beginning in Guru search results and on Freelancer profiles:
- As a first step, we will begin sorting search results by earnings as a default. A new option will also be provided to allow results to be re-sorted by Reviews. Of the available options, a default sort by earnings provides the best view of the health, vitality and promise of Guru Freelancers due to its natural display of financial success and high quote submission activity.
- Quality Scores and Rank numbers will no longer be visible to Employers. Both will be removed from your profiles and from the search results. Instead, your reviews and feedback ratings will be better featured to summarize your performance history to prospective Employers in a more familiar format.
Source: Guru.com website June 14th, 2010 (http://answers.guru.com/pro/Announcements/Freelancer-Rank-To-Be-Discontinued.aspx)
It can’t be made any more obvious, Guru.com is putting the emphasis on your ability to make them rich. They are trying to say this is to give “new consultants just getting started a chance to compete”. Really? We had a zero rating and no earnings at one point as well. We got started just fine and made it to the top 25. That was with a ranking system based on quality first.
Guru.com, it is clear, you are all about the money. Quality consultants be damned.
So what do we do now? Nothing with Guru.com it seems. They flatly refuse to try to resolve the situation. Regardless of the thousands of dollars in revenue we’ve produced for them, they insist we are somehow responsible for the $690 they lost because they allowed clear and blatant extortion to happen within their system.
Luckily we have a very good client base already and are growing without the help of Guru.com. There are also plenty of other venues out there that have improved significantly since the days back in 2005 when we started on Guru.com. New leads and new contracts will come in by word-of-mouth and through sites such as Elance. and oDesk.
Even if Guru.com were to ask us back, we’re not sure we’d go back. What was once a thriving, well-run community is now quickly sliding down the slope into mediocrity or worse.
Have you had good or bad experiences with Guru.com? Feel free to share. We’d love to hear your stories as well.