1. First I will talk about their "guaranteed" contests. You can submit free work and they say they will guarantee the payment, I participated in a guaranteed contest with ID ******* and client asked me several times for modifications which I did. Time passed I waited for a winner (I was top contestant, but I was not picked by client and client disappeared). Now according to their policies it was freelancer.com's job to come in and distribute reward among top entries but what they did was unbelievable. They DELETED the "guaranteed" contest without rewarding any freelancer. Now read the response from their support team: "We recently have done some improvement to make the site more secured for valuable users, like you. Hence, the system automatically deletes contests that may cause liability to us and its users. On a different note, you may earn more from contests when you are picked a winner. This will give you higher earnings, good ratings, and feedback, which will help you be awarded more contests and/or projects."
2. Second kind of fraud is more pathetic and shameless, you apply for a job, you are hired, you are paid, project ends, you receive 5 star feedback. WOW great! But after that they can close the project take back money form your account, yes trust me they did this. My money was stolen after I received 5 star feedback form client. Don't know if it went back to client's pocket or Matt Barrie's pocket I don't care but this is a fact they can screw you at anytime, it could have made sense if I was kicked when project was not complete but doing this after project is closed and feed backs are exchanged is the most shameless scam I ever faced.
I have screenshots of these scams and I am sharing for those who believe it is not possible on earth.