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Biggest Amazon fraud ever in EU discovered

By Chris Dawson August 7, 2019 - 12:22 pm

The biggest Amazon fraud ever discovered in the EU has been uncovered reportedly costing the company €330,000 in lost product.

The scam was simplicity in itself which as to order high value goods such as iPhones from Amazon, weigh the box, remove the retail packaging, fill it with dirt and return it keeping the goods. So successful was the scam that the perpetrators, James and his mate Juan, even set up a limited company to sell their stolen goods… all of which were sold without the retail packaging.

This isn’t a fraud that will be new to marketplace sellers – it’s so routine it’s almost common place to have a new product switched for a broken product, a totally different item, an empty box, a brick or other worthless material such as dirt. What’s astounding is that even with €1,000 euro items the total number of returns must have been staggering!

The scam worked because Amazon apparently don’t check returns before processing a refund. They simply weigh the incoming goods and if the weight matches the outgoing weight it triggers a refund immediately. The goods eventually end up on a shelf in the warehouse to be resold or are sent for disposal. With Amazon Prime, the fraudsters didn’t even have to pay carriage.

The biggest Amazon fraud in the EU was eventually discovered as Amazon started to crack down on serial returners and investigated why they were getting so many returns from the account in question. Amazon’s Barcelona warehouse discovered a returned item was missing and the packaging was filled with dirt and that sparked an investigation with the Police being called.

The two scammers have been to court with bail set at €3,000 a piece, but it is likely that they will be facing lengthy prison sentences.

Biggest Amazon fraud ever worldwide

This €330,000 scam isn’t even Amazon’s biggest fraud worldwide, that dubious award goes to Erin and Leah Finan who claimed for returns never sent back to Amazon, instead selling them to Danijel Glumac who acted as a fence reselling items below market price. This scam cost Amazon around $1.2 million in merchandise before the trio were eventually rumbled not by Amazon, but by the US Internal Revenue Service, the United States Postal Inspection Service, and the Indiana State Police.

The lesson is that you can scam for a while but once caught, it’s easy to roll back the entire operation. When (not if) you are caught you’ll be going to jail.

  • JIM
    2 weeks ago

    “When (not if) you are caught you’ll be going to jail.”
    UNLESS ITS EBAY

  • Toby
    2 weeks ago

    lol…. we see similar scams on ebay all the time. We had a large pump returned to us, the box was even empty. The boxes stated the original weight on it. our outwards post showed the coruier confirmed weight….. the return weight was a tiny fraction of it.
    Ebay simply refunded the buyer on the bases that we had received it back and they couldn’t confirm anything. No of course not, manufacturer weight printed on box, courier weight out and back etc …. yeah no way of checking that.
    So just another example of them all not caring. Amazon only acting as it has hit them in the pocket…

  • Dave
    2 weeks ago

    Totally agree Jim, but Amazon is like many companies nowadays, they are getting lazy and just processing refunds with no regard for the seller.

    Ebay’s process embargoes the sellers money on the opening of any “case”, there is not even a need for the buyer to prove an item is broken……and this is because ebay want to automate everything, ie a human would have to look at a photo to see something is broken.

    Amazon, if they weigh things, may have some human involvement still but not enough to bother to open things by the sounds of it.

    Sadly the upshot is that we, the honest, will end up paying higher prices for goods to make up for all of the company losses on fraudulent returns, and also we will pay higher taxes as the prison population increases and more jails are needed.

  • Andy T
    2 weeks ago

    I have no sympathy for Amazon, if they do not check all their returns I would go as far as say they are encouraging this kind of behaviour. Previous comment “UNLESS ITS EBAY” I have only had 1 similar case eBay support were brilliant, they refunded me with a no fault credit some time later I noticed buyer account had been suspended.

    I’m just imagining opening a case like this with Amazon seller support wondering what patronising irrelevant copy and paste response I would get back.

    Not recommended as breakfast time reading

    https://sellercentral.amazon.co.uk/forums/t/long-story-advice-dont-know-funny-maybe-disgusting-definately-but-what-to-do/208559

    • 2 weeks ago

      regret opening that link, Amazon “stinks”

  • The lesson is for most scams don’t get to greedy just scam enough items for personal use, keeping your scam to less than £100 worth of items a week. Even if caught your actions will still be considered to be to low level for the police to be involved and all that will happen is your Amazon account will be closed, when this happens you just start again using your brother, sister, mother or father account instead. Or if you do this on eBay your never be caught as they just don’t give a …. About sellers being scammed. What amazes me is that EBay Amazon claim to be experts in the use of artificially intelligence, in which this sort of thing should be the easiest thing in the world to pick up. As every time you open claim you need to create a record of doing this (in the old days you just claimed non-receipt all the time) artificial intelligent is supposed to scan large data set picking out this sort thing. Yet it seems that buyers can claim non-delivery, fault good repeatedly hundreds of times without any flags being raised. Especially as EBay make the reporting far too time consuming to report and as you have no idea if the buyer is doing this on all his orders or if there is a genuine problem, scanning buyer messages would flag this up immediately. People moan about Amazon, as they are most likely to be the biggest victims of scams at least they are incentivised to try to do something about it, team unlike ebay who have a stupidly small team responsible for monitoring millions of transactions that take place every day.

  • ifellow
    2 weeks ago

    Amazon’s policy is refund first and don’t ask questions latter. Plus the cost of checking returns is clearly higher than the fraud taking place. Think it’s best to stay away from warehouse deals.

  • 2 weeks ago

    That is an issue with the Amazon refurbishment programme which in theory is good – process customer return and if item is re-saleable then return to stock. However, if the customer return is not being processed correctly and to a high standard, a standard that the brand owner/business owner would adhere to, then the risk is that a return is re-sold to a new customer who complains which then leads to product problems and performance notifications.

    Automation is used to handle the overwhelming volume but at what cost. Or is it a numbers game and just accept there will be scammers, same as Tesco accept there will be shoplifters.

  • Mark
    2 weeks ago

    I still see the same complaints for ebay about items not being in the box and weights showed the item as different outgoing to the incoming weight.

    Trading standards told us the way to avoid it is to wait for eBay to provide the returns label to the customer.
    Now the item is sent via whichever postal company and the contract is between eBay who purchased the label and the company delivering. So when an item is not in the box or is not what you sent the actual shipping agreement T&C’s between ebay and the carrier state They packed the item and they packed it securely for the journey.

    So when they say they did not know what t condition or what the item was so cannot protect you as a seller you have all the tools you need to say then yyour contract with the carrier is fraudulent.
    We got a Filter at £185 refunded back to us after 2 weeks of arguing and then furnishing eBay with this info they paid inside of £10 minutes Oh with the statement that this does not mean we accept responsibility.
    Trading standards say if eBay want to get involved they must make sure they cover all angles buyer and seller which they are not.

  • Of course it’s a numbers game, this is why I don’t and never will accept referbished stock back into my FBA inventory or co-minge my inventory with god knows what other people are sending in, as it’s your Amazon account on line with the Amazon performance notifications team. Also unlike every third party retailer Amazon expects the brand owner / manfacturer to take back all the good that have been described as “faulty” or returned by customers, which they all just write off off as the cost of doing business with Amazon. I don’t think either Apple Exec’s or Amazon Exec’s will lose much sleep over the 330K worth of iphone fraud.

  • SAM
    2 weeks ago

    This sort of thing was the straw that broke the camel’s back for me with Amazon.
    We were getting stock back claimed unsellable and it would come back mint or we would get clowns swapping out the stock for broken stock.
    On top of all the costs including getting the stock back from the tax dodgers, enough was enough, they are not managing anything.

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