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I was scammed by the Elance - Net-Arb team.  I hired a contractor to build an instant messenger module and laid out approximately 10 requirements very clearly in the initial documentation.  It was quickly evident that the contract was not competent enough and too inexperienced to finish the project.  After laboring through a month of excuses and extending the project an extra two weeks to allow him some time to finish, he still only had about 3 of the 10 requirements
completed.  Nearly ever feature expected from a generic instant messenging application was missing.  A fact I brought up on multiple occasions to the contractor.  I informed him of these shortcomings before I extended the project for him and thereafter.  After two more weeks of little progress I had enough and kindly explained to him that I would pay him for the work he had done and offered him $800 out of the $1500 project which was very generous on my part.

He sent me to Elance's arbration/mediation and my only recourse was to use Net-Arb who they offer as the only arbitration firm you can use.  I should have done my research ahead of time and might have known better. There are experiences similar to mine all over the internet. They have no physical address, very few employees,
they do not use a "panel" of judges that they claim to have.  They work extremely closely with Elance and
are in direct collusion.  In most cases they side on the side of the worker so that Elance does not have to refund the
money or their fees.  They will not review any evidence you provide.  Their arbitrators are either incompetent or seem as so because they have no intention of offering you a fair hearing.  They ask for evidence that has very little to do with the case and ignore essential questions like: Did the programmer complete all of the work? They will ask a non-technical person to look through all of the code and explain why the code does not work.

I thought that it would be enough to explain that only 1/3rd of the work was complete. So of course they made a decision against me which never addressed the issue of the work not being complete, a fact that the
programmer never disputed.  They wanted me to look through the lines of code to tell them exactly what was wrong.  If I could have done that I never would have needed the programmer in the first place

I have posted this experience on multiple boards and now Elance and Net-Arb employees are writing rebuttals to them.  Making up extremely upsurd statements about me and my company that are total lies made up to discredit me. They said that my " company had failed because of my poor management which stemmed from a culture of scapegoating and that only employees left were those that had been the most negative about other employees." 

This is a 100% fabrication.  My company is still alive and well, I am a startup and only work with myself and one other programmer.  I do not even have any full time employees.  Beware of this company, there policy, to lie, and deceive to try to protect their corrupt practices is truly disheartening.