Guru - Dispute Resolution and Arbitration
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Unlike most of its competitors, Guru deserves credit for spelling out clearly its chargeback policy. Unfortunately, it does not stand out in a positive way for how it actually handles chargebacks.
First of all, if the client pays you using SafePay Invoicing—the straight payment method that is the alternative to SafePay Escrow—then you have no protection at all. If the client charges back the payment he or she made to you, Guru will take that money right out of your account, even days after the project was completed.
I have had this happen to me personally at Guru, and it was a real eye-opener. This actually wasn’t a chargeback, but rather a bounced “e-check”; still, the effect was the same. Even worse, it occurred on an escrow project! In fact, it was this event that prompted me to investigate how the chargeback issue is handled by other sites.
When this occurred I sent an email to Guru saying the following: “I don't see how you can market something as ‘SafePay’ and then put me on the hook if the employer does something like this.” The response I got to my comment was underwhelming to say the least. As far as I am concerned, the name “SafePay” is a joke, at least as far as contractors are concerned. If Guru isn’t going to provide any protection with their invoicing system, they should stop calling it “SafePay Invoicing” and telling contractors that it gives them payment security. It really isn’t “safe” at all.
If SafePay Escrow is used, the chargeback policy becomes a bit more complex. In this case, Guru will fight chargebacks issued by the client if the reason given is “services not rendered” or “quality of services rendered is not as agreed”. The justification for them doing this is that employers agree that they are satisfied with the work when they agree to release escrowed funds. In this case, Guru will not come after funds that have been released to you.
What’s less clear is what happens if this sort of chargeback occurs as a result of a project that goes to arbitration. In that case the client hasn’t agreed to release escrow, it is being done by an arbitrator; I am not sure whether Guru will guarantee the payment here in the event of a chargeback.
Furthermore, Guru will not protect at all against “transaction not authorized” chargebacks. This type of chargeback is used when the client simply says that he or she never agreed to make the payment at all. The only defense against this is to have a signed bill of sale, and of course that’s not done with Internet transactions. So you lose the funds even though you paid 2% for “SafePay Escrow”.
After funds are taken from you, Guru will help if you want to try to actually dispute the chargeback with the credit card company. This must be done through Guru, since Guru was the recipient of the funds from the client. This is only done after Guru takes the money back from your account, though. Guru doesn’t indicate how often challenging this sort of chargeback is successful, but my guess would be that it is pretty infrequent.
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