Amazon says fraudsters stole millions through fake product returns

Amazon is taking what it calls an international fraud ring to court for allegedly stealing millions of dollars in a scheme in which participants were reimbursed for expensive products without sending them back.

A group called REKK openly advertises its refund services on social media such as Reddit and Discord, and unscrupulous people looking for a free product can pay REKK a fee to obtain a fraudulent refund, according to complaint filed by Amazon on Thursday in filed in the US District Court for the Western District of Washington.

REKK and nearly 30 people from the United States and five other countries are named in the lawsuit, which accuses the group of using “sophisticated methods” to gain unauthorized access to Amazon’s internal systems as well as bribing Amazon workers to approve false refunds for items such as e.g. car tires and MacBook Pro laptops.

False returns

More than a dozen fraudulent refunds were issued from June 2022 to May 2023 for high-priced items, including game consoles and a 24-carat fine coin, with at least seven former Amazon employers allegedly accepting thousands of dollars in bribes to process refunds for products that were never returned, Amazon claims in the suit.

Accused in the suit of being part of an underground industry that caters to people willing to participate in scams to get expensive electronics and other products for free, the defendants are among those who have “created organized operations to systematically to defraud retailers on a large scale,” the suit stated.

Amazon said that by 2022 it was spending $1.2 billion and employing more than 15,000 people to fight theft, fraud and abuse across its stores and is using sophisticated machine learning models to detect and prevent fraud.

“When fraud is detected, as in this case, Amazon takes a number of measures to stop the activity, including issuing warnings, closing accounts and preventing people involved in refund fraud from opening new accounts,” said Dharmesh Mehta, Amazon’s vice president of seller services said in a LinkedIn post.

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