Still 14 day clearance period, is it legal?

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Jonathan

• November 26, 2021 21:09

Dear All

I have read a few comments about the clearance period that PPH have imposed. They are still sticking to this policy which is unbelievable.

1. What is the legal basis for holding freelancers money for such a long period? Just saying that they are trying to prevent fraud is not enough.

2. PPH say that there are different clearance periods depending on how much a freelancer earns. How does this relate to preventing fraud? Where is the logic in having a shorter clearance period if a freelancer earns less than another if it is for preventing fraud? Does this mean that there are different levels of fraud and the fraudsters target the lower earners?

3. On the one hand, PPH try to make it clear that the work is between the freelancer and the buyer. What is PPH's part in this? The buyer has paid the freelancer for work and the question is whether PPH has a legal right for holding a freelancer's money. PPH argue that it is to prevent fraud, but they have not been transparent in disclosing specific legislation or regulations. After all, they are freelancers, not employees. I would suggest that this is not a reasonable period to keep someone's money without reasonable grounds and further suggest that a court would feel the same. Just because they say they are preventing fraud doesn't mean they have the legal right to hold funds in these circumstances.

 

 

 

 

 

 

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• Official comment

  

  Community

  • November 29, 2021 13:44

  Hi Jonathan, 

  Thank you for sharing your concerns with us. Firstly, we want you to know that we hear you and we're truly sorry to hear the impact that our new payments process has had. 

  We can assure you that our processes, terms and conditions, and actions, all comply with current law. 

  The tier system that allows for faster clearing periods is a result of in-depth data analysis. Many fraud and dispute cases that we have received over the years were included in this investigation. As a rapidly growing business, we have to follow stricter regulations and complete more checks before we can release payments that are made through our platform in order to protect our users.

  Clearing funds faster for high-earning freelancers is a form of rewarding loyalty, essentially we can spend the extra time required to monitor for fraud more closely as it is more acceptable for us to take the hit when we have to cover the cost incurred by fraud. This is why we offer this higher level of service primarily to freelancers who earn a lot of money from work done on our platform rather than people occasionally earning smaller amounts. 

  We are truly sorry that you feel let down by our new payments process but hope this response provides more clarity to the questions asked. 

  As always, please feel free to email support@peopleperhour.com if you have any other questions and a member of the team will be happy to help. 

  Best wishes, 

  The Community Team

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  Simon

  • November 30, 2021 08:57

  To Community,

  You can hide behind your terms and conditions as much as you like but you have hammered a few more nails in your own coffin. I'm only here today to investigate why an invoice hasn't been paid. It turns out it has been paid but you didn't bother to tell me. I now have to wait 14 days before I can draw the money out, and when the 14 days are up, you won't tell me that either. That is my money, paid on my invoice with my name and address on it and my VAT number. I'm legally obliged to pay that VAT in January and it is sitting in your bank account. Your terms and conditions have a further threat claiming that if I don't withdraw that money within 30 days you claim that you can keep it because my account would be "inactive". That money is mine and if you try to steal it I will take you to court and let's see how your terms and conditions stand up then.
  
  The whole situation of freelancers working through PPH is a minefield of contract and employment law. You only get away with it because nobody challenges you. One the one hand, you insist that the client is your client and their identity is concealed from the freelancer. One the other hand, you insist the client is the freelancer's client and the freelancer works for them directly. You pick which of these applies depending on which version favours you.
  
  I've given up with PPH and I have found other work. I'm sure I'm not alone in doing this.

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