It is reported that hundreds of billions of yen worth of damage has been caused by a refund scam targeting Amazon, and a fraudulent group is recruiting members on TikTok and Reddit.
Many online shopping sites such as Amazon advertise ``free returns,'' but it has been reported that criminal groups are taking advantage of this free return policy to commit refund fraud. . Losses caused by refund fraud groups are said to amount to hundreds of millions of yen.
Amazon and other retailers hit by refund fraud costing them billions
According to CNBC, an Amazon warehouse worker was rewarded by a group of criminals who returned the purchase price by marking the product as ``returned'' on its internal system and refunding it to the seller, even though the product was not returned to Amazon. It is said that an incident of 'receiving' has occurred.
In a case investigated by CNBC, a member of a criminal group named ``Rekk'' that targets major retailers with refund fraud appears to have committed fraud through workers at an Amazon warehouse in Chattanooga, Tennessee. The worker, Noah Page, was interrogated by the police and said he received $3,500 (approximately 520,000 yen) as a reward for participating in this crime plan.
Refund scams like this, in which the retailer deceives the customer into returning the purchase price without returning the product, have gained momentum in recent years. This type of refund scam seems to be recruiting collaborators on services such as Reddit, TikTok, and Telegram.
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Experts say refund fraud groups are taking advantage of retailers' generous return policies, which include requirements for unlimited and free returns. According to a study by the National Retail Federation (NRF) and Appriss Retail , this type of refund fraud is a major problem for retailers, costing them more than $101 billion by 2023. It seems like there is. In addition, the NRF investigation has identified multiple forms of fraud as ``refund fraud,'' such as ``returning worn clothing by pretending that it is unworn,'' and ``refunding shoplifted items.'' Contains acts.
The fraud process of Rekk, which repeatedly committed refund fraud against Amazon, is as follows.
First, a shopper purchases an item online and sends the order information to Rekk. Then, Rekk poses as a shopper and requests a refund. At this time, Rekk recruits co-conspirators from among Amazon employees and processes the transaction as 'returned' without actually returning the product. As a result, Amazon is forced to refund shoppers even though they have not returned the product.
Shoppers who receive a refund will pay 15-30% of the refund amount to Rekk through PayPal or other means. This allows shoppers to purchase the product they are looking for at a much lower price than the original price. Rekk pays a portion of the compensation received to the colluding retail store employees.
In addition, Amazon is suing Page and 47 related parties for conspiring to steal millions of dollars (hundreds of millions of yen) worth of products in December 2023 by making full use of refund fraud. In its lawsuit, Amazon says, 'Refund fraud is an illegal business. Those who seek to exploit the refund process for financial gain do not harm genuine customers by increasing costs, reducing inventory, or disrupting service.' 'It creates an impactful disadvantage and harms honest consumers and retailers.' According to the complaint, Amazon suffered more than $700,000 (approximately 100 million yen) in damages due to refund fraud.
When CNBC asked Amazon about refund fraud, the company said it is 'tapping this issue head-on' through a dedicated team and machine learning tools to detect and prevent refund fraud. Amazon also reports that its cooperation with law enforcement has led to the dismantling of criminal groups and civil lawsuits. An Amazon spokesperson said: 'Amazon remains committed to proactively identifying and stopping fraudulent activity and eliminating groups that seek to undermine the integrity of our stores and the retail industry as a whole.' that's right.
In addition, in 2023, a 25-year-old man was arrested and indicted in Michigan on suspicion of operating a refund fraud service called 'Simple Refunds,' and 10 men in Oklahoma were also arrested and charged with operating a refund fraud service called 'Artemis Refund Group.' He has been arrested and charged with running a refund fraud group.
Page, who was sued by Amazon, was found guilty and ordered to pay damages of $5,000 (about 750,000 yen).
Law enforcement agencies are cracking down on refund fraud groups, but each time a group collapses, a new one emerges. According to CNBC, the refund fraud group uses the encrypted messaging app Telegram to manage its scams, where information about new targets is shared in group chats with thousands of followers.
According to a CNBC investigation, not only Amazon is the victim of refund fraud, but also various online stores such as Nike, eBay, Saks Fifth Avenue, Ralph Lauren, and Apple. Furthermore, food delivery services such as DoorDash and Uber Eats also appear to be victims of refund fraud.
Below is a screenshot of the Google Form used by the refund fraud group. Stores and customer information that are targets of refund fraud are compiled.
According to court documents, Rekk acquired two Amazon employees and signed a contract to pay them $4,000 (approximately 600,000 yen) for 30 returns in two months. The employees acquired by Rekk fraudulently approved 76 returns at an Amazon warehouse in Chattanooga, Tennessee, from February to May 2023, resulting in a total of $100,000 (approximately 15 million yen). ) or more has been refunded.
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