We posted a relatively small project on Freelancer.com in late March. Based on the feedback, we awarded the project to user samitXI (http://www.freelancer.com/u/samitXI.html). He accepted the project and the work started. The problems started when freelancer send us a message that the work has been completed and asked us to mark the milestone completed and he would send us the code after that. We didn't see any reason to start making things more complicated because of his 5 star reputation and released the funds. After that we received another demand - samitXI requested us to provide him with great feedback and if the feedback was "correct", he would send us the code. It is a violation against Freelancer.com TOS and doesn't make sense anyway to write a feedback of work we haven't actually inspected so we politely declined and told him that we would provide feedback after we have actually reviewed his work. [continued below]....
..... He continued demanding feedback. We left him a negative feedback to warn other possible employers about his practices. He messaged us that we left him "wrong feedback" and that we should withdraw it. He then replied to the feedback that our profile is a fake one, we wanted more money and steal work from him whatever that means. So at this point we are stuck. Interesting point is that when we told him that we would be contacting Freelancer.com to solve the situation, he replied "go ahead".
At this point is was painfully obvious how samitXI had obtained his 5 star reputation.
Then we contacted Freelancer.com customer service and wanted to solve this as quickly as possible. The level of not caring was something out of this world. When we were communicating with Freelancer.com about the situation, they refused to do anything expect send email to freelancer reminding him that they should send the end product. When freelancer continued refusing to upload our code Freelancer.com told us they have suspended freelancer's account. This was a lie because the profile page of the freelancer revealed that he was actively bidding on new projects. This leads us to believe that Freelancer.com values scamming freelancers more than employers who bring in the business. We are so shocked about their lying and the way they handled the matter that we feel it's our duty to warn other businesses about their practices. We have pulled all our projects from Freelancer.com and switched to Elance.com and Guru.com.
The problem is that this reputation scam renders the whole feedback system of Freelancer.com completely unreliable. After you know how this scam works, it's very hard to trust freelancers because you have no way of detecting who got their reputation by extorting and who by doing great work. To make things worse, Freelancer.com protects these scammers.
I should also mention that after we told them we would warn other businesses about their practices they refunded our money, even we told them that we don't care about the money (really small sum) and what we want is them to solve this situation like professional, trustworthy organisation. It seems this was too much to ask because after the refund we got the email claiming the user account was suspended when it clearly is not.