Random Thoughts – Randocity!

Review: Is Fiverr a scam?

Posted in botch, business, scams by commorancy on October 8, 2021

conceptual photo of a money scam

Fiverr is one in a new generation on “Work for Hire” sites (sometimes known as freelancer sites) that have recently sprung up, while they’re also hoping to turn a big profit off of the backs of buyers and sellers. Let’s explore whether Fiverr is a scam or legitimate.

Work For Hire

While Fiverr might think it is something kind of special, it isn’t. There have been plenty of “Work For Hire” kinds of sites throughout the years going back to the early 2000s. There’s nothing really new about this kind of site.

To explain more, Fiverr’s “Work For Hire” marketplace has two distinct type of visitors: Buyers and Sellers. This means that a person visiting the site could be one or both of these roles.

As a buyer, you visit the site looking for a specific kind of service to buy. For example, maybe you would like to have someone write a blog article for you. You can then find an author/seller who is selling such a service, then contract their services at an agreed price, place an order, then wait for delivery of the article… at which time payment is due.

As a seller, you use your talents to place your authoring services up for sale and reap monetary rewards (such that they are) for providing a needed service to the buyer community.

It’s a reasonable idea and a potentially great business model, if such a site is correctly designed. Here’s where Fiverr fails hard.

Buyers

As with any site of this type (or really any site in general that offers logins and passwords), certain expectations are set (and must be met).  Any site with user logins must be willing to maintain and manage these user logins themselves, including appropriate application of Terms and Conditions by taking action against violators, abusers, harassers and scam artists. After all, it is Fiverr’s servers and system, therefore it falls on Fiverr to ensure users of the service act according to the Terms and Conditions while using that platform. This is a very basic expectation that all sites must meet.

For example, when you create a Google account, there’s an expectation that Google will both vet and maintain its new user signups appropriately. For the most part, Google does this well… except when the individual is under 13 years of age. That means that when Google identifies someone violating its rules of conduct (usually laid out in Terms and Conditions and/or Terms of Service documents or possibly other documents also), it will take action against a violating account up to and including termination from the service. However, Google has refrained from either detecting or deleting accounts created by users under the age of 13, for whatever questionable reason. I digress.

Along these same lines, Fiverr’s management is not only exceedingly naïve, they’re extremely inexperienced in running a user signup based platform like Fiverr and it shows. Why? Because the site’s weak signup system and rigid Terms and Conditions forces far too much of Fiverr’s buyer vetting work down upon its sellers. Instead of taking care to properly manage its buyers, it forces sellers to shoulder that responsibility and take this work onto themselves. As someone so rightly said, “Ain’t nobody got time for that”.

Sellers

As a seller, you would think that your primary job and focus is to sell your service to would-be buyers. While that is a portion of what a seller is expected to do on Fiverr, Fiverr’s unreasonable and overreaching Terms and Conditions require the seller to take on a whole lot more burden than they should, such as Buyer vetting, Buyer management and, yes, being “Academic Police”.

One egregious mistake in Fiverr’s Terms and Conditions is its overreaching “Academia” clause. One might think, shouldn’t we protect academic institutions and/or students? Well, no. Academic institutions are responsible for protecting themselves. Students are responsible for protecting their own best interests. It’s no one’s responsibility to protect any specific academic institution or student than that academic institution itself.

How does this impact sellers? Great question. Let’s get started answering this loaded question. There are 3,982 degree-granting institutions of higher learning as of 2020 according to US News. Nearly 4,000 institutions exist…. 4,000! That’s a lot.

This number is important to realize because Fiverr’s Terms and Conditions require sellers to become “academic police” for each and every one of those nearly 4,000 institutions of higher learning. Oh, but it gets so much worse.

Every single one of those institutions has by-laws and rules regarding code of academic conduct. Students attending are required to agree to that code of conduct upon enrolling in any one of those institutions. For example, rules against plagiarism is a typical code of conduct which may be found at many, if not most, of these institutions. It is beholden to the student to read, comprehend and understand this code of conduct for their specific institution upon enrollment.

However, for sellers on Fiverr, Fiverr’s Terms and Conditions effectively deputize sellers to become “academic police” for any or, indeed, all of these nearly 4,000 institutions of higher learning. This means that should a buyer show up at your seller doorstep, you must become responsible to make sure that buyer (who might be a student) isn’t violating a university’s academic code of conduct by buying something from you.

Not only that, Fiverr expects the seller to determine intent of every buyer… such as somehow magically deriving that a buyer is a student at one of those nearly 4,000 universities (or way less likely, even grade school), but also that the magically-derived “student” is buying the service with the INTENT of turning the resulting product in as their own work. Intent is something a seller cannot possibly determine or be expected to determine, let alone if the buyer is a student. Intent is difficult enough to determine and, more importantly, prove by defending and prosecuting attorneys in criminal court trials. How and, more importantly, WHY is a seller expected to determine intent for a site like Fiverr?

That’s like asking a gun dealer to be held responsible for intent of every gun sold. Thankfully, in the United States, there’s the PLCAA federal law that prevents this exact situation for gun dealers. Under the PLCAA, gun dealers cannot be held responsible for how a gun is used after it has been sold… which means, gun dealers cannot be held responsible for a buyer’s intent.

Fiverr’s Naïvety

Oh, it gets worse. Because there are so many institutions of higher learning not including grade schools, the seller would need to visit each and every one of those institutions of learning, THEN be required to read and understand each and every one of those rules of academic conduct for each of those ~4,000 institutions. That could take years. As I said, NAÏVE and insanely impractical.

Again, WHY is the seller responsible for this work? As a seller, I’m there to sell my services, not become police for for-profit higher education institutions.

Education Institutions

If schools have a problem with student conduct, that’s between the institution and the student. Fiverr, nor its sellers under it, has no role in this. That Fiverr has decided to take on the burden of becoming a police force for these mostly for-profit organizations is bewildering. Worse, that Fiverr expects the sellers to become that police is even more bewildering.

Work for Hire

In a discussion with a very naïve set of support representatives for Fiverr, a conversation ensued over this very same “academic police” issue. Essentially, the representative tried to make it seem like the seller is at fault by 1) not knowing the buyer is a student, 2) that a seller should know a student INTENDS to plagiarize and 3) that sellers are somehow responsible for that student’s plagiarism.

Let’s get one thing CRYSTAL clear. There’s no “plagiarism” under Work for Hire. The representative stated copyright infringement was also involved. There’s also no “copyright infringement” under Work for Hire. That’s not how Work for Hire copyrights work. If someone commissions and buys a work, such as writing a book, writing software code or any other software goods, as soon as the deal is closed, the delivered goods are considered as “Works Made For Hire”. The copyright office is very specific about this type of work and how copyrights apply to these works.

Works sold under “Works Made For Hire” see ALL copyrights turned over to the buyer as though the buyer created the work themselves. Meaning, as soon as the deal closes and those soft goods are delivered, the copyrights are fully, completely and legally owned 100% by the buyer. THIS is how “Works Made For Hire” copyright law works. From that link, here’s an excerpt that states that copyright law for “work” (made for hire) apply…

When a certain type of work is created as a result of an express written agreement between the creator and a party specially ordering or commissioning it

That’s exactly what Fiverr does… allow for commissioning a work using express written agreements. Thus, all works delivered from Fiverr are considered as “Work for Hire” and, thus, all copyrights are owned by the buyer upon delivery.

Academia, Works for Hire and Fiverr

Unfortunately, these concepts are like oil and water. They don’t want to mix. Academia wants students to create their own works. However, “Work for Hireallows a student to buy a commissioned work, turn it in as their own work without legal issues and without plagiarism. Legally, under a “Work for Hire”, a student buyer owns the rights just as if they wrote it themselves. Therefore, no such plagiarism or copyright issues exist with “Work for Hire”. It might be an ethically poor choice on the student’s part and it might even deprive the student of much needed learning experience, but there’s nothing legally at fault here; not from the seller and not from the buyer.

Were the student to copy (not buy) a work from someone else and turn it in as their own, that’s plagiarism and copyright infringement. Keep in mind that plagiarism is not a ‘legal’ term. It’s an academic term typically bandied about when a student turns in a work they didn’t author themselves. However, commissioning someone and paying them for their efforts as a “Work for Hire” is not technically considered plagiarism and is most definitely not copyright infringement. While it might be ethically questionable for the student to take a “Work for Hire” route to complete an assignment, it doesn’t violate copyright laws and it isn’t plagiarism so long as the work was crafted by the seller as an “original work”.

Sellers Part II

With Fiverr, they’ve explicitly decided to place the burden of these “academically ethical” misdeeds onto the seller rather than onto the buyer / student. Let’s understand the problem here. Fiverr is not an academic institution. Fiverr, as far as I know, has no ties to academic institutions. Yet, Fiverr has crafted a Terms and Conditions policy that greatly benefits these for-profit academic institutions at the cost of requiring sellers to read and understand THOUSANDS of school policies to know if a potential buyer is violating any specific school policies.

WOW! Can you say, “overreaching?” I knew that you could. This situation is not only a ridiculous ask of sellers, it’s insanely complicated and time consuming and is highly unethical… all to sell a blog article, a work of fiction or a computer program on Fiverr?

None of this should be a seller responsibility. That’s Fiverr’s responsibility. A seller’s responsibility should end at selling their service. Violating school policies is the student’s responsibility to their school. The student agreed to their school’s conditions of attending that academic institution. The Fiverr seller plays no role in a student’s decisions. If a student intends or, indeed, violates a school’s enrollment conditions, that’s on the student to take the consequence. Fiverr should be completely hands-off of this process.

As I said, Fiverr’s management team is extremely naïve, gullible and unethical. That insane naïvety forces sellers to be incredibly overburdened as a long-arm-of-the-law for for-profit academic institutions combined with taking responsibility if a student violates a school’s academic policies. If an academic institution wants to task Fiverr sellers to become “academic police”, they can pay for that service like universities do for any other service.

Institutions of Higher Learning

Most higher education facilities (Universities and Colleges) are typically for-profit organizations. If they weren’t for-profit, they couldn’t keep the lights on, employ hundreds of instructors, janitors, staff AND buy desks, computers, buildings, land and so on. That Fiverr has taken the dubious and questionable step of writing into their Terms and Conditions a clause that favors these for-profit organizations is extremely questionable. Of course, one might ask, “Well, what about grade schools?”

Grade school is a whole separate bag and one where Fiverr shouldn’t actually ever see buyers for a number of reasons. The first and foremost reason is that grade school kids shouldn’t have credit cards to be able purchase items on Fiverr. The vast majority of grade school kids are at an age that prevents owning a credit card. A child might own a “learner” Visa debit card managed by their parents or perhaps a Visa gift card, but if Fiverr is accepting these payment cards without verifying age, Fiverr might be breaking other laws. For example, many grade school children are under the age of 13, which means that if Fiverr is allowing children under the age of 13 onto Fiverr’s platform, Fiverr is almost assuredly in violation of COPPA. Even minors under the age of 18 and who are still in grade school should be disallowed from making Fiverr purchases. In fact, only legal adults should be allowed to purchase services on Fiverr.

No, any application of “academic police” almost 100% both implies colleges and universities almost exclusively… which are most definitely for-profit organizations.

The above “academic police” situation would be tantamount to Fiverr adding a clause to its Terms and Conditions that holds sellers responsible for credit card fraud from buyers. Sellers aren’t “credit card police” any more than they should be “academic police”. Sellers have zero control over the payment system(s) that Fiverr employs and uses. Requiring such a condition for seller usage is not only backwater, it’s insanely stupid and definitely states exactly how inept the management team at Fiverr actually is.

Why would sellers be responsible for credit card fraud of a buyer when the seller has zero to do with that payment, that card or, indeed, the payment system? Sellers don’t get access to any of that card information. Thus, credit card management, just like academic management, is Fiverr’s responsibility.. and rightly it should be. It is on Fiverr to determine if a buyer is a student. It is on Fiverr to restrict and prevent purchases from students, not the seller.

If a seller is not a student at all and is not attending any academic institution, that seller holds exactly ZERO responsibility to any academic institution. Because Fiverr’s Terms and Conditions foists this agreement onto the seller is disingenuous, highly dubious, insanely stupid and, because of the time required to manage it, highly unethical. Everyone can understand the “credit card fraud” issue, so why is “academic fraud” any different here?

Low Wages

As a completely separate issue, but one that’s extremely relevant for sellers at Fiverr is how much money can a seller expect to make?

As a tech worker, the average wage to write code or build software, at least in the United States, is at typically between $30-70 per hour depending on experience, language, the type of code being written and so forth. That’s a lot for an hourly rate, but that’s the going rate in the United States.

Because far too many buyers on Fiverr are from Israel, Pakistan, India and other middle east countries where wages are very depressed, the expectation of costs of providing these services is extremely low. Meaning, instead of the normal going rate of ~$40 per hour, you’re expected to drop your fee down to $5 per project. Ironically, I think that’s why they named the site “Fiverr” because a “fiver” is all you’re going to get (less actually). I think you see the economic problem here. This brings me to my next point.

Commissions and Fees

Fiverr gets its money both coming and going. What that means is that for every “gig” sold (what they call a listing), Fiverr takes a 20% cut from both the buyer AND the seller separately. That’s a total of 40% cut for Fiverr from every single project sold. Let’s put a dollar value on that. For a $5 order, a seller will receive $4 with $1 going to Fiverr. A buyer will spend $6 to cover the $5 seller cost seeing $1 going to Fiverr. That’s a total of $2 that Fiverr made from that $5 sale.

This means for that $5, the seller doesn’t actually get $5, they get $4 (less after income taxes). You might spend 2 or more hours working on a project to receive less than $4? That’s way less than even minimum wage. So then, what’s the incentive to sell on Fiverr if nearly every buyer expects to spend $5 for almost any project? Yeah, that’s the real scam here.

Scam

Let’s get to the heart of the matter. Is Fiverr a scam? Clearly, Fiverr’s team is naïve and doesn’t understand the service they are offering. However, the overly expensive 40% commission that Fiverr takes combined with its overreaching Terms and Conditions, which is clearly designed to favor educational institutions over its sellers, and because the low price expectation from mostly middle east buyers leads the platform into extremely scam-ish territory.

Is it a scam? I don’t think the founders intended for it to be, but at this point it almost certainly is a scam. There are similar sites, like Upwork, that seemingly operate in a somewhat more legitimate way, yet those sites still choose to employ the overly high 40% commission system. However, because Upwork attracts more legitimate clientele over the “middle east crowd”, setting up listings on Upwork is more likely to lead to a better wage than when using Fiverr.

Bottom Line

Don’t go into Fiverr expecting to make a lot of money. Because of the mostly “middle east buyer crowd” who expects rock bottom prices that Fiverr seems to attract, because there’s few controls for sellers to protect themselves, because sellers must become “academic police” for for-profit educational institutions, because of the incredibly high 40% commission and because the actual income is so low, I’d class Fiverr as “mostly a scam”.

I strongly recommend avoiding this site unless Fiverr’s management team can get their act together and clean up all of these issues. Instead, if you’re looking for other “Work for Hire” type sites, try Upwork or CrowdSpring or, better, put your resume on LinkedIn and attempt to get legitimate actual employment with a real livable wage. However, if you enjoy frittering away literal hours of time for less than $5, then by all means head over to Fiverr.

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