Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue Mar 28 2017 16:11:52

Amazon Infected with Scam Sellers

By: Ina Steiner

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Amazon is experiencing a problem that one more typically associates with marketplaces like eBay: scam sellers, who are racking up high negative feedback ratings. One Amazon seller we reviewed last night showed an astoundingly low 1% positive feedback out of 498 ratings.

A reader reported the problem on the EcommerceBytes Letters blog last week - they noticed it thanks to their repricing tool: "We use a price-matching algorithm and noticed items way below cost when our system flagged it to look to see if we wanted to price match, and that's how we stumbled upon it."

We were initially puzzled - with Amazon processing payments between buyers and sellers, how could sellers defraud customers?

This story by a Forbes contributor explains one method: the seller tells the customer they'll receive their item in 3 - 4 weeks, and then they "wait for Amazon's two-week payment cycle to run its course, whereupon they collect their cash." The author says such sellers can scam hundreds or thousands of customers in three to four weeks before Amazon catches them and shuts them down. In the meantime, they open up fresh selling accounts and keep going.

Since the scammers don't intend to fulfill the order, they price items very low. That's just one way the issue is having an impact on reputable sellers - look for more about this problem in the next issue of EB 411.

UPDATE 4/3/17: We wrote more on this issue in today's EcommerceBytes 411, and we wanted to share the following update.

An Amazon spokesperson told EcommerceBytes, "Amazon has zero tolerance for fraud. We withhold payment to Sellers until we are confident that our customers have received the products and services they ordered. In the event that Sellers do not comply with the terms and conditions they've agreed to, we work quickly to take action on behalf of customers."

As of July 2016, new sellers no longer get paid every 2 weeks - instead they get paid 7 days after confirmed delivery or estimated delivery, depending on whether they provide a tracking number.

EB 411 subscribers can read much more about the impact of the fraud attack on sellers in today's issue, and also check see more information in this evening's blog post




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Readers Comments

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: DingDong This user has validated their user name.

Tue Mar 28 17:03:09 2017

AyyyyY!
The other month, I was looking for a new camera since the local stores are not stocking them.

I refused to pay for the camera and wait for 5 weeks to received the item. - So this is why -

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

This user has validated their user name. by: iheartjacksparrow

Tue Mar 28 19:51:28 2017

I was very surprised to read this: "A seller opens a new merchant account on Amazon, which is incredibly easy to do and does not entail any sort of vetting process,...." I was under the impression that Amazon put each new seller through a screening process.

If they have a known scamming seller, I would think that they would shut down the ISP for that person to keep them from starting over with a new account.

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: mcposty This user has validated their user name.

Wed Mar 29 01:47:59 2017

Amazon makes money either way they do not care.

This has been going on forever. A new seller opens up and in 5 minutes has 20000 skus online. Obvious scam bit amazon refuses to deal with it.

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: angryllama This user has validated their user name.

Wed Mar 29 02:32:40 2017

Serious topic, but my very first FUNNY TAKE-AWAY is that the LONE Positive this example cited in opposition to 497 NEGATIVES is surely one of those Brain-Dead buyers who leaves POSITIVE FEEDBACK .... INSTANTLY without waiting for their $$$purchase to even SHIP.... let alone WAIT to see their purchase pop up on their doorstep.  Sad!  

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

This user has validated their user name. by: eXtinctBay

Wed Mar 29 02:44:19 2017

Amazon has a strict rule: One account per IP address (with very, very few exceptions).

But when these addresses can be spoofed, it is simple for scammers to open multiple accounts with a myriad of internet identities.

The folks from the big continent with the highest world population are ahead of the game. And, since there are many others in line to replace those who do not complete transactions (and their accounts closed, at least temporarily), it is a daunting task for the River.

The A-Z Guarantee claims filed must be enormous, and a massive drain on Amazon resources, since they have to issue full refunds for all the items never received.

Just imagine if this happened to eBay as well. Could they keep up with this many failed transactions and Money Back Guarantee claims? Scary thought.......

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

This user has validated their user name. by: Ina

Wed Mar 29 09:58:07 2017

"Amazon makes money either way" - if Amazon pays the seller in 2 weeks and get an A-Z claim from the buyer after that, Amazon would have to refund the buyer.

Wish there was hard data about the scale of this problem.

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: Frank F This user has validated their user name.

Wed Mar 29 17:57:16 2017

Ebay has a lot of this too, although I don't know if its to run with the money or a different scam.. And I think its all foreigners doing it..

I bought a shelving unit that normally is $99 with $25 shipping for $15 and free shipping. I know too good to be true! They sold 1500+ of these in a day, and then ebay cancelled all the sales.. My paypal was not refunded though, it was unclaimed like the seller had not even set up an account in paypal..

Really odd, not sure what they were up to, maybe just trying to collect personal info, or it was a scam gone wrong...

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: Frank F This user has validated their user name.

Wed Mar 29 18:02:37 2017

There are all sorts of scams on ebay. Last fall, the Chinese were putting up NFL jersey accounts with links to their websites and HTML that redirected you to their sites. They were not trying to sell on ebay, just out to market and steal customers.

Ebay would shut down the fake listings, and in minutes new ones were back up under new ids (and I guess with spoofed IPs). It went on for weeks and weeks...

And what was funny is that the damn fake stuff was at the very TOP of best match for ZERO feedback sellers.. Thanks ebay for giving the 'nobody newbies' and SCAMMERS visibility, and relegating your long time established sellers and customers to the bottom...

Don't understand why they have such strict controls on us, and let the scammers run rampant...

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: vk This user has validated their user name.

Wed Mar 29 20:29:59 2017

This has become a massive problem. It's not just the ''Just Launched'' sellers, it also seems like the scammers are using old dormant accounts that had 1-3 positive feedbacks years ago - my guess is because those accounts have been grandfathered in for daily disbursements.

Seller forums are blowing up, yet not a peep from Amazon or forum moderators - extremely suspicious.

To get a sense of the scale of this issue, check out these three accounts and the amount of negative feedbacks:
https://www.amazon.com/sp?_encoding=UTF8&asin=
&isAma
zonFulfilled=&isCBA=&marketplaceID
=ATVPDKIKX0DER&orderID=&seller=A3E9QSWYTBCETQ&tab=&vasStoreID=

https://www.amazon.com/sp?_encoding=UTF8&asin=&isAmazonFulfilled=
&isCBA=&marketplaceID=ATVPDKIKX0DER&orderID=&seller=
A1NYSS0KSYPFPQ&tab=&vasStoreID=

https://www.amazon.com/sp?_encoding=UTF8&asin=&isAmazonFulfilled=&isCBA=
&marketplaceID=ATVPDKIKX0DER&orderID=&seller=A1KTUNW3ZSKTP9&tab=&vasStoreID=

Now,
do the math - since only small percentage of buyers bother with the feedback, I'm guessing tens if not hundreds of thousands of customers have been scammed by these three ''sellers'' alone! And feedback keeps rolling in! And there are hundreds more of these sellers! It's really unbelievable.

My honest believe is that this issue must be brought to media attention, because I don't see Amazon doing anything to combat this without public pressure applied to them.

Ina, if you are reading this, I'm sure you have good contacts in various media outlets, so please forward this story to them.

This is fraud on a scale never seen before on Amazon.

Thank you!

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: vk This user has validated their user name.

Wed Mar 29 20:35:45 2017

Since my first link appears to be broken, here you go again:
https://www.amazon.com/sp?_encoding=UTF8&asin=&isAmazonFulfi
lled
=&isCBA=&marketplaceID=ATVPDKIKX0DER&orderID
=&seller=A3E9QSWYTBCETQ&tab=&vasStoreID=

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: vk This user has validated their user name.

Wed Mar 29 20:48:53 2017

Well, seems like the second try didn't work either..

In any case, I forgot to mention one of the more important aspects of current phenomenon - somehow these "Just Launched" sellers are able to bypass restriction on categories that require approval - such as Clothing.

This means that either they found a loophole in API which allows them to list in categories without any approval, or Amazon's servers have been breached. The potential ramifications of the second possibility are enormous.

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: Tiffee Jasso This user has validated their user name.

Thu Mar 30 01:56:41 2017

I think if you are an American seller, you have to jump hoops to sell on Ebay and Amazon. If you are an Asian seller you can get away with anything as being a thief is considered an honorable profession in that part of the country.  

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: Gemz This user has validated their user name.

Thu Mar 30 02:10:26 2017

This has been going on forever with Ebay as well. Specifically from Foreign sellers in Asian countries. Malaysia is a prime culprit of this. Almost anytime you see a seller advertising something well below market and even showing some completed (paid for) auctions for insanely low prices, this is always a scam.
They take the payment (happens by the 10's of 1000's of listings per day at Xmas time),the item doesn't show up, and having you wait until the 45 day window where you can't charge back the seller.
If you complain where the item is, then they try to give you a fake tracking number or some excuse. If you complain again, some sellers will refund you thinking they will make it up on the ones that are going to wait and lose completely or you won't hear from them again providing if it's close enough to the time where you don't have any recourse with paypal. They don't want too many complaints to be issued so if you complain to them about where your item is closer to the purchase date, the better off you will be and the better your chance to get a refund from the seller rather than run it through Ebay and have flags raise on them.

Cameras, Ipods, Ipads, Go-Pro cams too. Even super low prices on generic go-pros where  they can sell 500-1000 pieces in no time at all for 9 or 10 dollars each when average is 30-45 dollars for the model. They can rack up an easy 10,000 dollars if they screw everyone but they will settle with half that amount since they know that some of the people will complain and ask for their money back before the drop dead date and that's on just 1 of their listings! They run 100+ listings at a time and can cheat to the tune of millions of dollars before they are stopped! It wouldn't take much at all to stop these people from doing this but....You have to care about it first and obviously the venues don't. Not until their stock prices take a hit and then their ears perk up like pulling a steak off the grill in front of a hungry dog!

This goes on every day of every year for the last few years and so far I don't see any signs of them stopping. These people open accounts and shell shoelaces or some 1 dollar items to get 10 to 50 feedbacks and then they let the accounts go dormant. They have 100's of these dormant accounts just waiting out there. They close one, another 1 or 2 open and start selling again but this time a seasoned account with no holds or waiting times until the money is theirs upon payment! Plus, for 10 or 20 dollars, paypal doesn't look too hard at all.

The above is all about Ebay, I'm sure that Amazon is being played the same way with slight changes to accommodate the way sellers work the system on Amazon.

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: frustrated This user has validated their user name.

Thu Mar 30 06:00:36 2017

It's all over the seller forums.  Thousands of items appearing overnight at 6.99 or lower (items that retail for hundreds) and Amazon appears powerless to stop them from popping back up.  

Let's forget about the sellers for a second, they are stealing millions of dollars from naive people who cannot understand that it is NOT POSSIBLE to sell a 6 person hot tub for 7.99 and 5.00 shipping.  So they order the item thinking they found a "mistake".  Little do they realize they are NEVER getting any hot tub, and good luck getting their money back.  Now this scammer in China has all of their info except the physical CC number.....

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: lisapar This user has validated their user name.

Thu Mar 30 07:38:53 2017

There is a very obvious reason why Amazon has not publicly addressed this issue:  bad press.  And bad press = buyer abandonment.  It's the same thing that happened to Ebay years ago when news got out that there was a huge rise in scammers on Ebay selling knock-offs, or just collecting your money and not shipping anything.  Ebay became an immediate “buyer beware” shopping venue.
So, Amazon has kept a tight lip on this fraudulent seller epidemic on their platform.  If they make any comment, word will spread and shoppers will start re-thinking that purchase fearing they may be scammed.
I sell home textiles on Amazon, and this issue hasn’t been prevalent in the bedding department like it’s been in electronics…until a few weeks ago.  Almost every ASIN I’ve listed has a “just launched” seller now offering a $30 wholesale item for $5 or less.  I have reported these sellers, and surprisingly they are taken down overnight, only for new ones to appear the next day.
An easy fix would be for Amazon to demand Asian sellers to ship standard USPS Priority mail.  No more “2-3 weeks” shipping times, but who am I to advise Amazon?  I’m sure Amazon is scrambling behind the scenes trying to figure out how to handle these scammers – even if the press isn’t reporting it, bad shopper experience is your worst form of advertising.

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: Chicago48 This user has validated their user name.

Thu Mar 30 08:02:02 2017

I have things listed at Tradesy and we don't get paid until 4 days after the order is marked "delivered".  At first I didn't like it, but I can see why it makes sense.  First, it gives the buyer time to try on the outfit; second tradesy wants to be sure it was received.
Maybe AMZ should follow that policy?  Obviously, the payout policy they have now isn't working for the buyer.

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: lostsoul This user has validated their user name.

Thu Mar 30 08:37:49 2017

Ina,
the scale of this is enormous. Dozens of phony seller accounts appear each day. Each with tens of thousands of items. It has to be seriously eroding buyer confidence in Amazon sellers.
Amazon's inability to stop this (it's been going on for months) is bewildering. It's hard to come up with a reason why Amazon wouldn't want to stop it. If Amazon can't figure out how to stop it, it's scary for us third party sellers.  

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

This user has validated their user name. by: VV

Thu Mar 30 09:19:28 2017

When I started on Amazon it was several months before I got full payments every two weeks. Not sure why that has been changed. Made perfect sense at the time.

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: Moonwishes This user has validated their user name.
Web Site

Thu Mar 30 09:45:20 2017

There are so many scams going on Amazon it is crazy. I fell for one as the seller had 98% Positive. When after several emails, my item showed up after almost a month - Amazon had been told it shipped two days after the order but no tracking # given, I got a box with tracking showing it had been shipped 5 days before I got it, nothing on the box from Sam's Club indicated that it was an Amazon order and it was shipped 110 miles from my home. Why did I wait a month for it? Then things got really interesting. I left a factual negative feedback and for some reason a few hours later felt the need to check on it. It had disappeared. I monitored the seller for the next two months. Of the ones I caught with negative feedbacks, all were for pretty much what I had gone through and every single one of them disappeared within an hour or two. This joker should have had at the best a 40% positive feedback. Instead they still had 98%. I wrote email after email to Amazon and got back such stupid responses it wasn't funny. Even sent one to Jeff. No change. With the obvious help of an Amazon employee, this guy was scamming folks constantly. Last I saw, his feedback was at 99%! In all the things that I sent out I've only had about 5 orders go missing. Of the ones I saw, about every third feedback said they were told that the item had gotten lost in the mail - apparently the 'seller' couldn't find a drop shipper to send them an order that they could make money on. I've seen other scams where everything is listed in mass in a wrong category at prices that are out of sight, yet the seller's feedback indicate that they are selling plenty of 8 piece crayons boxes for $25! Amazon needs to fix a lot of broken things. I know that if I got 3-4 negatives in a row I would in all probability be suspended from Amazon for life!

Perminate Link for Amazon Infected with Scam Sellers   Amazon Infected with Scam Sellers

by: go-figure This user has validated their user name.

Thu Mar 30 10:26:53 2017

@Moonwishes

Was this questionable seller out of China or did they mysteriously have that blocked as well?

I agree with you 100% It's not a wonder our sales are down between the scammers and the Chinese that apparently have license to break whatever rules and policies they need to break without any consequences.

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