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I've been burned before for around $500 too.
What I do now to prevent it is I take the 50% upfront, develop everything on my own server, and then upon completion I get the rest and send them the files.
Works great because theres no trust issues. If I already have the code done they don't worry about paying me and me disappearing without sending them an email with the code.
The only time i develop on a clients server is for affiliate programs, and that's only for larger programs.
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