How a 'Refund Fraud' Gang Stole $700,000 From Amazon (404media.co) 49
An anonymous reader writes: The U.S. government has indicted alleged members of a criminal group that uses insiders at Walmart and other techniques to commit 'refund fraud' on a massive scale, according to recently unsealed court records. In short, the scam involves someone ordering an item from, say, Amazon -- which in this case says it lost $700,000 -- receiving the item, and then using one of various tricks to get their money back from the retailer. The person is then free to sell the item online, and the criminal group takes a fee.
The indictment as well as 404 Media's own research into refund fraud reveals a professionalized ecosystem of sellers and people providing various services as part of the wide-reaching scam. As well as malicious insiders, refund scammers take advantage of customer service representatives and online retailers' lax refund policies to get expensive items for free. This is not a crime whose only victims are giant retailers, who may garner little sympathy. Delivery drivers, who already have very difficult jobs, are often dinged for misdelivering or failing to deliver a package, which is something these types of scams often rely on.
The indictment as well as 404 Media's own research into refund fraud reveals a professionalized ecosystem of sellers and people providing various services as part of the wide-reaching scam. As well as malicious insiders, refund scammers take advantage of customer service representatives and online retailers' lax refund policies to get expensive items for free. This is not a crime whose only victims are giant retailers, who may garner little sympathy. Delivery drivers, who already have very difficult jobs, are often dinged for misdelivering or failing to deliver a package, which is something these types of scams often rely on.
Fuckers Ruin Everything (Score:5, Insightful)
Every time there is a good thing, fuckers come along and ruin it.
In this case, the good thing is customer-friendly refund policies.
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The loss is built into the price.
Brick and mortar has/had lots of stuff going out the back door. This is nothing new.
Re:Fuckers Ruin Everything (Score:4, Insightful)
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Death sucks too. It's about the same likelihood of eradicating either. Best you can do is make examples and hope that deters some of it, which is precisely the point here. Getting fired up about it is pretty pointless. Injustice is the way of the world. You're not going to shame thieves into being honest.
The policies are mutable in terms of what makes sense to retain market share. If Amazon gets restrictive about return policies, people don't buy shit from them. If I get broken shit from Amazon i'm n
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There is also a fundamental techo-social issue here of what an "identity" is and how to maintain the integrity of the concept. A lot comes down to how much we are willing to be tracked and monitored to maintain order.
You forgot the price tag. (Score:5, Interesting)
There's another cost of this practice; the price.
I've purchased over a dozen Anker charging cables of various types from Amazon because of their 'lifetime' warranty policy. A couple of them have indeed failed in the past, and at most I was asked to send in a picture to obtain a refund.
Now, I'm being asked to ship the broken cable back to Anker so that the engineers can 'review' the problem. I thought this would be a bit too much of a hassle to even bother with, until I realized that the new price for the same damn cable went from $13 to $26. From the same vendor. In less than a year.
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I also ran into a similar situation with Anker (whose products I still like) in regards to one of their Soundcore earbuds. They stopped working after around 3 months, got in touch with them but found out if you did not buy from their "Official Amazon Storefront" then no warranty, at all. Didn't care about the serial number, date of purchase, nothin.
I kinda understand it, probably I should've been more observant about who the end seller was at checkout but if they were even able to confirm that say the ite
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Warranty should be preserved based on the manufacture date in the absence of a proof of purchase. They can get away with this to try to skirt around the First Sale Doctrine that makes it perfectly legal to buy things to resell them even if you're not an official "dealer" of a brand.
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Every time there is a good thing, fuckers come along and ruin it.
In this case, the good thing is customer-friendly refund policies.
Bingo.
The "Tragedy of the Commons" online.
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These guys weren't even amateurs. They should have taken after this criminal [go.com] who was pardoned by the biggest grifter of our time, and was then re-arrested for committing even bigger fraud.
Re: Fuckers Ruin Everything (Score:3)
I agree completely. Further, if Donald Trump is found guilty of treason for his role in the Jan. 6 riots (or any other context), he should be executed as per Article III of the United States Constitution.
Protecting delivery drivers (Score:3)
Delivery drivers, who already have very difficult jobs, are often dinged for misdelivering or failing to deliver a package, which is something these types of scams often rely on.
It would seem that Amazon and perhaps others now take pictures of the package AT the doorstep of the recipient, so if delivery drivers are still being 'dinged' for this kind of loss, then I'd like to know what the photo policy is for. Or more importantly, WHO it is for.
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How does the photo prove it was delivered? Sure I see the photo and it's the house down the street. Should I go get it or should I tell Amazon it was never delivered which is the truth. I'm paying for that delivery, I'm not walking 3 houses down because they are incompetent.
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Even if it was delivered to my door it is no proof of delivery. I am not my door and anyone can take that package from there.
If you do not have my signature, you did not deliver it!
Re: Protecting delivery drivers (Score:3)
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GPS generally. Post office can tell you exactly where a "delivered" package was scanned "delivered". Found out due to a misdelivery The larger problem is that an insider driver could just pick up the package after taking the photo and blame a porch pirate.
I've never had a problem with USPS failing to deliver, but have Otten "delivered" notices when the package was not actually delivered until later in the day or a day later. My guess is the driver scanned it when convenient and not at drop-off.
Amazon, OTOH, is more problematic. UPS less so and FedEX never. Part of the problem is the streets in my neighborhood often have the same first name but end in Way, Drive, etc. A driver not familiar with the area may see the first sign with XYZ and not realize it is
Re: Protecting delivery drivers (Score:2)
That's your city screwing up. They're not supposed to reuse street names unless there is a gap somewhere, and then they'll call one "way", "court" etc to help avoid confusion. That also avoids the problem of two houses having the same number with very similar street names.
Given your address doesn't sound like it has a direction, that also contributes to confusion, because even people unfamiliar with the area will generally understand where it is relative to the downtown area based on that alone, and seeing
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That's your city screwing up. They're not supposed to reuse street names unless there is a gap somewhere, and then they'll call one "way", "court" etc to help avoid confusion. That also avoids the problem of two houses having the same number with very similar street names.
Ours do have different names, it just that the only difference is the suffix, so you have multiple streets with very similar names, such as Harbour Way, Harbour Drive, etc. Compounding the problem is they all are off the same street and the street signs will say HARBOUR DR or HARBOUR WAY so the driver sees HARBOUR and assumes it's the right street.
Given your address doesn't sound like it has a direction, that also contributes to confusion, because even people unfamiliar with the area will generally understand where it is relative to the downtown area based on that alone, and seeing west when they're east, or south when they're north, if they're not incompetent they'll double-check things.
The cities where I live in the California south bay are pretty fucking bad at this.
Part of the problem is even if you have N S E W most people have no idea which way they are heading anyway.
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My favorite example has to be out in/near Beverly Hills where there is a Spalding Avenue and a Spaulding Avenue, about a mile and a half apart.
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I don't care if he took it or someone stole it from my porch. Until you have my signature, you did not deliver.
Yes, that's how things run here. Putting crap on my porch is NOT delivery. Get used to it, UPS or more packages you deliver to me will get stolen.
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Oh, you're one of those guys.
Amazon agreed to this when they decided to accept credit card payments. Every merchant agreement has a clause to requiring the goods or services actually be provided as described, or the merchant can be subject to a chargeback.
Now, of course Amazon could certainly decide they don't want you as a customer for future orders if everything they previously attempted to deliver got porch pirated because you live in a high crime area.
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No, I'm one of those guys that are pissed that delivery people leave my packages out in mud puddles and don't even bother to ring the bell so that I could at least pick them up before the contents are soaked through and through because I'm home anyway.
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Including the delivery driver themselves. Have seen Ring video of the driver putting the package down, shooting a photo, then picking it right back up and walking away.
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Re:Protecting delivery drivers (Score:5, Interesting)
I actually had this happen (my package was delivered to the wrong house) and before they were willing to do something to resolve it, Amazon actually wanted me to wait a few days to see if the neighbor would bring it over. Seriously. Oh, also, this was a $20ish WiFi card, not exactly a great loss if they had to eat their mistake.
Because I was low on patience and had the delivery picture (which clearly wasn't my house, a point entirely lost on the customer service representative I had spoken with), I just flew my DJI Spark up and down my street looking for the house with a side door that matched the photo. Then I went over, knocked on the door and asked if I could please have my misdelivered Amazon package.
TFS mentioned that "insiders" were helping the scammers approve refunds, which makes sense because Amazon's normal customer service response when they misdeliver was quite unhelpful.
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I've been on the other end of this, where a package was misdelivered to me. I was expecting a package (although not from Amazon -- but people reuse the boxes so the logos didn't tip me off), and it was about the right size, so I didn't look at the label before opening it. Inside was the collector's edition of some game, complete with a bunch of physical merch like minis (I think it was a Warhammer game). I knew I hadn't ordered that, so then I looked at the label. The correct address was a few blocks away,
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Sorry, forgot half a sentence. If they told the guy where it was, I was fine with him driving or walking over to collect it.
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That's happened to me too. UPS delivered an office chair (it was shipped in the original manufacturer's packaging) to me even though it was addressed to my next door neighbor. That was far less eventful and didn't involve any drone flights. I just brought it over and left it at their door since no one appeared to be home at the time. As far as I know, they're none the wiser as to why UPS is pronounced "oops".
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And did the person who lived there give it to you without a fuss? Was it unopened? Did you ask why they didn't deliver it to you given that it clearly wasn't for them based on the shipping label? What was their answer? (Just curious.)
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The package was still sitting on their side doorstep and they were totally cool about it.
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It would seem that Amazon and perhaps others now take pictures of the package AT the doorstep of the recipient, so if delivery drivers are still being 'dinged' for this kind of loss, then I'd like to know what the photo policy is for. Or more importantly, WHO it is for.
I recently had a failed delivery. The photo showed that it was delivered to the wrong address. Unfortunately I couldn't determine where it was, and whoever received it never contacted me. Amazon gave me a refund.
Meanwhile (Score:5, Interesting)
While these guys are making bank off false returns, I get shipped totally wrong products and after returning them for a refund, Amazon refuses to refund me because I didn't send back what I ordered...
I've stopped using Amazon for almost everything now.
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Yeah, its funny how screwing someone over can have consequences. I bought my first PC from Dell and it was supposed to have X number of ports. It turned out that you could actually only use X minus 1 of the ports at a time. So, it was either use the printer or the modem. Eventually I learned about this new technology called USB that got around the fixed port problem. If I could get my hands on a $50 USB to parallel adapter my problems would be solved. The way I saw it, Dell owed it to me to make good
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Given the feature set and the date that is implied from there, I'm suspecting the chief competitor had cow spots on their boxes.
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Yes a big loss for them... (Score:2)
They screwed me for a few bucks only to lose thousands from a customer.
Yep the day they told me I was not getting a refund (and I also could not even get a chargeback on my CC, Amazon blocked that too) I cancelled my Prime membership and stopped buying just about anything on Amazon. I will happily pay a bit extra to not give Amazon money now.
I had been a Prime subscriber for a very long time, and have made a LOT of purchases over the years. It's astounding to me that they were willing to think that someon
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Newegg screwed us on a BS restocking fee once ($1500 or so fee on an expensive unopened item) and they lost the company's business forever.
We would have happily paid an actual restocking fee.
Unbroken holographic tape and everything, as I recall.
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> after returning them for a refund, Amazon refuses to refund me
Huh? Do you have a tracking number?
They got the package (Score:1)
Huh? Do you have a tracking number?
They got the package I sent, but complained I didn't send them back what I had ordered, even though they told me to return the things they sent that were not at all what I had ordered! They seemed to have no way to understand I was returning the completely wrong things THEY had sent. I had many pictures, it didn't help.
I knew it was going to be a disaster when I was going through it with customer support before I even sent it in.
It probably didn't help that I had ordered
Don't steal (Score:1)
Jail em (Score:1)
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That's what I'm thinking. In this case they have more data to identify future criminal gangs. Smaller shops don't have access to this wealth of data. $700,000 is probably small fry for a fraud detection project, now they have hoards of shipment and purchase data to train from.