homebusiness NewsAmazon reports millions in losses due to refund scams

Amazon reports millions in losses due to refund scams

Shoppers worldwide will spend $678 billion on Amazon sites this year, making it a big target for scams that sometimes lead to criminal indictments and involve Amazon insiders. In 2020, an Amazon employee in India was charged with taking $100,000 in bribes to give select merchants advantages over others selling goods on the site. 

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By Bloomberg  Dec 8, 2023 11:07:55 AM IST (Published)

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Amazon reports millions in losses due to refund scams
Amazon.com Inc. sued an international ring of thieves who swiped millions of dollars in merchandise from the company through a series of refund scams that included buying products on Amazon and seeking refunds without returning the goods.

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An organization called REKK advertised its refund services on social media sites, including Reddit and Discord, and communicated with perpetrators on the messaging app Telegram, Amazon said in a lawsuit filed Thursday in US District Court in Washington.
The lawsuit names REKK and nearly 30 people from the US, Canada, UK, Greece, Lithuania and the Netherlands as defendants in the scheme, which involved hacking into Amazon’s internal systems and bribing Amazon employees to approve reimbursements. REKK charged customers, who wanted to get pricey items like MacBook Pro laptops and car tires without paying them, a commission based on the value of the purchase.
“The defendants’ scheme tricks Amazon into processing refunds for products that are never returned; instead of returning the products as promised, defendants keep the product and the refund,” Amazon said in its lawsuit.
The lawsuit lists more than a dozen transactions from June 2022 to May 2023 as leading to fraudulent refunds. Items purchased include gaming consoles, smartphones, laptops and even a 24-karat gold coin. The company identifies at least seven former Amazon employees who participated in the theft as “insiders” by allegedly taking bribes of thousands of dollars to approve refunds even though products weren’t returned.
Shoppers worldwide will spend $678 billion on Amazon sites this year, making it a big target for scams that sometimes lead to criminal indictments and involve Amazon insiders. In 2020, an Amazon employee in India was charged with taking $100,000 in bribes to give select merchants advantages over others selling goods on the site.
Amazon said it spent $1.2 billion and employed 15,000 people in 2022 to fight theft, fraud and abuse on its site.
“When fraud is detected, as in this case, Amazon takes a variety of measures to stop the activity, including issuing warnings, closing accounts, and preventing individuals who engaged in refund fraud from opening new accounts,” Dharmesh Mehta, Amazon’s vice president in charge of seller services, said in a LinkedIn post.

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