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Fraudsters scam Amazon out of millions of dollars using basic, fake product refund

In a bizarre development, e-commerce giant Amazon has fallen victim to online fraudsters, who were able to trick millions of dollars in either money transfers or products using a simple refund scam.

Amazon has taken action against an alleged international ring of thieves involved in a sophisticated refund scam that resulted in the theft of millions of dollars in merchandise from the e-commerce giant.

Amazon filed the lawsuit on Thursday in the US District Court in Washington, naming an organization called REKK and almost 30 individuals from various countries, including the US, Canada, UK, Greece, Lithuania, and the Netherlands, as defendants.

The scam orchestrated by REKK reportedly included purchasing products on Amazon, seeking refunds without returning the items, and utilizing various tactics such as hacking into Amazon’s internal systems and bribing company employees to approve reimbursements.

REKK advertised its refund services on social media platforms like Reddit and Discord and communicated with people looking to buy their services on Telegram’s messaging app. The scammers targeted high-value items such as MacBook Pro laptops and car tires, charging customers a commission based on the value of the intended purchase.

Amazon’s lawsuit alleges, “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.”

The company points to over a dozen transactions from June 2022 to May 2023 that resulted in fraudulent refunds, encompassing gaming consoles, smartphones, laptops, and even a 24-karat gold coin.

The lawsuit identifies at least seven former Amazon employees as “insiders,” accusing them of accepting bribes to approve refunds without product returns.

The incident underscores the challenges faced by Amazon in combating fraud and abuse on its platform. The company spent $1.2 billion and employed 15,000 people in 2022 to address issues related to theft and fraud.

Dharmesh Mehta, Amazon’s Vice President in charge of seller services, stated on LinkedIn, “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.”

As online shopping grows, platforms like Amazon remain prime targets for scams, necessitating robust measures to safeguard against criminal activities.

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