Brett Johnson: Amazon Just Made Things Easier for Fraudsters#News247WorldPress

Photo: Brett Johnson, Speaker, Consultant, Former USA Most Wanted Cybercriminal, Identity Thief, Hacker, and Internet Godfather, Contributor at News247WorldPress

Today, I received an email from Amazon titled, “Important Update—Amazon is simplifying returns”.

I read the email title and before I even read the email body knew this was going to be a boon for fraudsters. I read the email and knew I was right. Amazon has given fraudsters everywhere an early Christmas gift. Let me explain.

First, the email itself:

Dear Seller,

Amazon is simplifying the returns process on items fulfilled by sellers. Starting October 2, 2017, returns of items that you fulfill and that fall within the Amazon returns policy will be automatically authorized. Customers will be able to print a prepaid return shipping label via the Online Return Center instantly.

We are also introducing ‘returnless refunds,’ a feature that is highly requested by sellers. If you so choose, you will now be able to set rules and automatically issue a refund without requiring an item to be shipped back to you. Sellers have requested this because, in many cases, it allows you to save on both return shipping and processing costs.

We hope these changes will reduce the effort required to manage your returns and decrease your customer Return Dissatisfaction Rate (RDR), thereby improving your ratings. Additionally, you will have full visibility into the end-to-end return process through shipment tracking information located on the Manage Returns page in Seller Central.

Below are a few key details:
1. You are required to have a return address on file. If you want to specify a separate return address, please update your information in Seller Central (https://sellercentral.amazon.com/gp/on-board/configuration/global-return-address/index.html). If you have not specified a return address by October 2, your business address will be used as the return address.
2. You are required to issue a refund within two business days of receipt of a return. If you do not take action regarding the refund request, Amazon may refund the customer on your behalf and charge the amount to your seller account.
3. You might be responsible for the cost of return shipping in accordance with Amazon’s policies.
4. Certain items are not eligible for prepaid return shipping. You can request exemptions for specific items in your inventory after August 31.
5. You can appeal return disputes directly to Amazon.
To learn more, visit the Prepaid returns for seller fulfilled orders help page: https://sellercentral.amazon.com/gp/help/202072200

Early participants have seen RDR go down by an average of three times after offering prepaid return shipping. If you would like to begin offering automatically authorized prepaid returns to customers before October 2, please respond to the survey below by August 11 to on-board by August 25.

https://amazon1.qualtrics.com/jfe/form/SV_1ZdyaXOyIKcteOF

Thank you for selling on Amazon.

Sincerely,
The Amazon Selling Team

Pretty straightforward. For someone unaware of organized fraudsters taking advantage of Amazon’s outstanding customer service, likely nothing would ever be thought wrong. But this is the real world, and Amazon has been victimized by “Friendly Fraud” for years. Anyone who has read my blog knows that Amazon has been getting hit with refund fraud for the last few years. It started with regular Amazon customers gaming the system for free merchandise and was quickly co-opted by entire cybercrime communities. So profitable was Amazon Refund Fraud that it changed the entire dynamic of newbies entering the cybercrime fray. Many criminals easily earned and continue to earn in excess of $10,000 monthly doing nothing but Amazon Refund Fraud.

The new policy Amazon is implementing allows fraudsters to accomplish a few things:

Returns of items fulfilled by sellers are automatically authorized. That is important to a fraudster. He can order an item and not have to worry about whether he can prepare a fraudulent return. He knows the return is already approved before he even orders.
Amazon is instituting “Returnless Refunds”. What does that mean? It means a person can get a full refund without ever sending anything back in to Amazon. Wow.

So here is the way this is going to work out.

The first is criminals will target sellers of high priced items where returns are already authorized. Think electronics, Lego, appliances, etc. The criminal might buy an aged Amazon login so he appears to be a long-standing member (though that certainly isn’t necessary—especially with Xmas season approaching). He will add a gift card or a prepaid card to the account he just purchased. Then he will order the item. He gets the item in. If he can commit straight refund fraud, he will. If he cannot commit straight refund fraud, then what? Then he goes old school. Meaning that he requests a return. He prints out the prepaid postage slip, puts a bunch of junk in the box, and ships it back. Seller receives the junk and starts raising hell, saying the buyer is trying to commit fraud. Whose side does Amazon come down on? NOT THE SELLER. Amazon supports the buyer. Buyer gets a quick refund. Don’t think that it would work like that? That exact scam has been working exactly as described on eBay for over a year. It is so popular, I’ve spoken to small retail stores who no longer sell on eBay because of it.

Returnless refunds? Oh. My. God. So the fraudster orders a product. He then claims it was shattered, the battery leaked all over the contents, whatever. Basically, make up some story. Electronics should always be leaky battery. Appliances, Furniture, heavy crap? Broken or shattered. A leaky battery you aren’t going to ship back. A heavy, broken item the seller isn’t wanting to cover return shipping. Instant refund for fraudsters. This is already going on via the Amazon Refund Scam. All Amazon is doing with this stated policy is making it even easier for fraudsters.

I had thought Amazon was taking steps to counter this type of fraud. Recently, they were requiring police reports for most suspected Refund Fraud. Fraudsters were also unable to use new accounts as easily as they once were and they could no longer easily target really high priced items for the fraud. I thought Amazon had really gotten smart about things. This new policy? Not so much.