Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Mon Apr 3 2017 22:37:47

Amazon Cracks Down in Wake of Fraud

By: Ina Steiner

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Amazon is instituting even more rigorous seller vetting, a spokesperson told EcommerceBytes over the weekend as we conducted research for an article that appeared in today's EB 411 newsletter. Amazon's initiative is a result of a wave of fraud that hit the site in March.

As we reported in this blog post, scammers are posing as sellers offering cheap prices to attract the attention of buyers.

"Amazon has zero tolerance for fraud," the spokesperson told us. "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."

It isn't the first time sellers have discovered what they refer to as "just launched" seller fraud, and we noted an attack in July of last year. At that time, Amazon removed one of the incentives to fraudsters: 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.

The recent seller vetting ramp-up becomes apparent when perusing industry discussion boards, where sellers are seeking advice after receiving notices from Amazon. Here's the letter Amazon is sending sellers:

Hello,
We are reviewing your Amazon.com seller account. During our review, you will not be able to sell on Amazon.com. If you have sales, funds will not be transferred to you during the review but will stay in your account.

Within the next 30 days, please provide the following documents and confirm there is a valid credit card on file:

- Utility bill with name and address visible
- Business license
- If you have active listings, include copies of invoices, receipts, contracts or delivery orders from your supplier issued in the last 90 days.

You can send files in .pdf, .png, or .gif format. These documents must be authentic and unaltered. You may remove pricing information, but the rest of the document must be visible. Please send the documents to seller-performance@amazon.com.

Once we receive your documents, we will review them and decide whether you may sell on Amazon.com again. If you do not send the requested documents within 30 days, we may cancel your listings and any funds in your account may be held for up to 90 days, but funds could be held longer.

To learn more about account reviews, search for "Selling policies" in Seller Central Help.

Sincerely,
Seller Performance Team
Amazon.com

Some sellers had called for Amazon to better vet new sellers as the recent wave of fraud was escalating, so will likely view this as a positive step.

But many of those who received the letters in recent days are distraught. Some say they do not have a business license because they aren't selling professionally.

Also concerned are sellers of handmade goods on the Amazon Handmade marketplace, who say they don't have invoices for their inventory since they make the goods themselves.

As scammers increasingly turn their attention to Amazon, sellers may find themselves becoming targets - remember to be wary of spoof emails, especially those that convey a sense of urgency that could cause you to panic. 

Remember never to click on a link in an email to log in to your account no matter who it comes from, even if the email includes your name and other identifying information.




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Readers Comments

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

This user has validated their user name. by: eXtinctBay

Tue Apr 4 01:33:16 2017

To some extent, Amazon is going a bit overboard here. Would just every (new) seller need to include invoices or receipts from their ''suppliers'', or will these be required from everyone?

When they needed invoices to sell any DVD with an MSRP of over $24.95 (and most Disney, BBC Video, and TV series season sets), many of us Marketplace sellers saw their Amazon businesses take a nosedive. Though these can be listed on eBay, it does take more time to do so.

It would be assumed that most 3P sellers obtain their merchandise from garage sales, thrift stores, etc.. Since there is no steady source of goods from any wholesaler, legitimate invoices cannot be provided. So this extreme vetting will essentially shut out most all new businesses from selling on Amazon Marketplace.

This is a serious consequence of what the out-of-control scammers have done to the site. And, as their main competitor has done in the past, they are perhaps punishing many sellers (and would-be sellers) unnecessarily.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: FeelingFroggy This user has validated their user name.

Tue Apr 4 05:21:01 2017

HEY FLEECEBAG


ARE YOU TAKING NOTE.....HERE'S HOW TO CLEAN UP YOUR SITE.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

This user has validated their user name. by: Rexford

Tue Apr 4 06:49:07 2017

This will hurt Amazon. Even when I was in grade school I did not like it when teachers punished all for infractions made by a few.

I think that this is more than just about Fraud.  I would imagine that Amazon is under a great deal of pressure from the major brands. The major brands do not like the competition, and they do not like pressure on their pricing. What better excuse than fraud to start this extreme vetting.

Of course we know that they have to deal with fraud, but I think that they can deal with this without punishing trusted long term sellers with this extreme vetting.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: mcposty This user has validated their user name.

Tue Apr 4 13:51:01 2017

This has nothing to do with fraud and everything to do with bowing to brands and bypassing the first sale doctrine.

Like I always say..if they cared about this they would immediately block china.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: ignatz This user has validated their user name.

Tue Apr 4 15:35:38 2017

Within a couple of years, the "3P" marketplace on Amazon will be composed almost exclusively of the mega-sellers who are exempt from these "reviews."


Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

This user has validated their user name. by: The End

Tue Apr 4 20:47:09 2017

FRAUD > Since I stopped using PayPal years ago, I don't get anymore phishing / ulcer inducing emails. PayPal is the WORST for fraud. Surprisingly, they were generated from INSIDE PayPal. I did a few experiments as proof.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: FeelingFroggy This user has validated their user name.

Wed Apr 5 07:24:15 2017

@McPosty

Not all sellers from China are scammers.

Just like not all TRS sellers here are the all great and wonderful honest sellers they think they are.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: topdog This user has validated their user name.

Thu Apr 6 05:37:07 2017

To a good extent they are throwing the baby out with the bath.
Almost without exception, the "just launched" sellers are all located outside the US. Further, they have an automated listing process which puts up huge numbers of items overnight.
They would do much better to focus on international sellers, as well as those with large numbers of listings. (However, that would make China very unhappy, which is why they likely don't do this.) If they wanted a one-size-fits-all approach, then instead of shutting down many new sellers, simply institute restrictions on the number of items that they can list in the first 30 days, or until certain metrics are reached. This will ensure that they are legit sellers who know what they are doing, before they are allowed to expand further.  

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: frustrated This user has validated their user name.

Thu Apr 6 06:17:43 2017

Nothing to do with major brands. Or any brand. It has to do with new sellers signing up using a bot and listing 5,000 items overnight at 6.99 and 4.99 shipping, NONE OF WHICH THEY HAVE IN THEIR POSSESSION.  Once a buyer buys, they issue a fake tracking number, and hope to get past the 2 weeks.

It has become so rampant that Forbes did a story on it. Boards on Amazon are full of these stories and it has gotten worse and worse.

Some buyers are so naive (and greedy, hoping for a listing by "mistake" they fork over their money for a 6.99 hot tub with 9.99 shipping. If you get 200 dummies to do that it's 1400 bucks.

SOMEONE must be making money off of this or it would stop. It's credit card fraud, and they stand a good chance of going to jail. Except in CHINA where Amazon probably has no legal reach.

Hence the vetting. I agree most of us don't have receipts, but how do you think Amazon should prove the existence of a sellers inventory in CHINA?

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: frustrated This user has validated their user name.

Thu Apr 6 06:19:09 2017

BTW topdog is right.

They should have a velocity control, and only let them list about 50 items, until ALL of those sales for 3 months show delivered. THEN release the money and allow maybe 100 listings.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: zenbreeze This user has validated their user name.

Thu Apr 6 08:00:25 2017

I hope I don't get long winded on this but it's been a big issue for me.  I know Amazon is treating some sellers unfairly.  I'm in Handmade and I've heard of sellers getting these letters, after Amazon vetted them in the first place.  Amazon is largely responsible for bringing in bad sellers.  Yes, absolutely, not all sellers from China are bad--I buy supplies there directly and there are great and honest sellers.  But it's not ''competition'' that was my problem.  My problem has been overseas sellers illegally using my artwork (not merely artwork that looks like mine) to make various products.  Early last year, my sales fell 90% practically overnight due to a tidal wave of these sellers on Amazon. Amazon wouldn't take them off, since they brought them in (I knew this after reading an ecommercebytes article about how Amazon was working with overseas sellers).  Couldn't sue them directly because the US ''doesn't have standing'' in China and you can't sue over 3rd party sellers.  Well, I guess you can because a couple companies did it but I couldn't get anywhere.  Then, this year, I again read here that Amazon was cracking down so I gave it a try.  I did a search for one of my images.  Over 20 sellers came up on Amazon, easily found with a generic search term.  About half were ''just launched''.  Now, at least, Amazon is taking down the listings I'm reporting and I am starting to see my sales resume, which is a tremendous relief to me and my family.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: Chicago48 This user has validated their user name.

Thu Apr 6 08:21:21 2017

Here's an interesting article that advocates that AMZ use verified sellers:
https://www.marketplacepulse.com/articles/verified-sellers
-the-future-of-amazon-marketplace.
I
like the idea of a verified seller for the STORE owners, but not for me, the little FBM guy.  

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: Chicago48 This user has validated their user name.

Thu Apr 6 08:23:27 2017

@ Zenbreeze, I hope you sell or Etsy and other dedicated sites and not just AMZ?  I started moving my clothing/accessories to dedicated sites because they don't allow Asian sellers and the retail sites is strictly for women buyers.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: Chicago48 This user has validated their user name.

Thu Apr 6 08:24:11 2017

Ina:  Is there a way you can make your forums available to receive comments at our email?

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

This user has validated their user name. by: David Steiner

Thu Apr 6 08:32:24 2017

@Chicago48

No, you can go into your account settings to receive notifications if someone has responded to your comment, but full comments are not available via email.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

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

Thu Apr 6 09:47:39 2017

There seems to be a prevalent thought pattern on the Amazon forums, that all 'real' sellers buy their inventory direct from the brand manufacturer and somehow those of us that started selling on Amazon years ago with items found at thrift stores, yard sales, FOL sales, etc. are somehow less than respectable and somewhat shady, surely not real business people. So there is the problem of the huge batch of sellers that seem to get 20,000 items into their inventory in about 5 minutes and proceed to scam for all they are worth, there are also sellers that don't sell items directly from the manufacturers. Incidentally those that buy their goods from wholesalers that sell overruns, unsold merchandise are not considered legitimate sellers either. If Amazon continues to go down the path it is currently on, many good 100% feedback sellers are going to be swept right out. I can't believe the changes in rules and procedures in the last 4-5 years.

As I have found out over years of selling on line, it is never good to put all your eggs in one basket. As hard as it can be to maintain two of more selling sites, it is worth it to at least have one or more sources of income coming in when Amazon or some other venue decides that even though you are a 100% feedback seller, they are going to review you for a few weeks, so no pay check, etc.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: Barbbie This user has validated their user name.

Thu Apr 6 09:52:10 2017

I think the just launched are of different kinds and not all from China either.

There are the drop shippers who attempt to actually buy from whatever seller they originally took the listing, but they usually last a little while and then are taken down, due to not paying attention to whose listings they sell.  I think this is pretty much an Amazon issue.

Then there are the ones who list all those items and never intended to ship anything, just making up tracking numbers and hoping for a paycheck from Amazon.

Then are the ones who sell knockoffs or generic items at lower prices than we can even ship it for, that is not just an amazon problem, it is on every site.

I think that Amazon is trying to limit sellers to professionals (who purchase wholesale) over the casual or garage sale seller.  But I have to agree that they should be cracking down on the international sellers on US site and not going after the obviously US based seller. Although, since they made all these International sellers actually get a US address to sell on Amazon, it is entirely possible that they have no idea now who those are and a utility bill and business license could be the only way to attempt to fix the problem they created. This US address is now used commonly by those same sellers on ebay and other places to state that they are US based as they now have an address.

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

by: stevel This user has validated their user name.

Thu Apr 6 11:11:38 2017

this is funny! I sell a line of licensed Disney products. Of late, there have been many low price, fake, sellers out of the US who have accounts that show as US shippers. Amazon has blocked my licensed items one by one and I have to provide proof that they are the real items. While at the same time, Amazon allows new sellers to continue to list these counterfeit items. Amazon's efforts are penalizing legitimate sellers, while the rouge sellers end up the only ones with product available until they are unblocked!

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

This user has validated their user name. by: FEEbay

Thu Apr 6 12:51:34 2017

Anyone who has AMAZON as a business partner needs help.... psychiatric help... Ebay is bad enough, but AMAZON is the devil incarnate

Perminate Link for Amazon Cracks Down in Wake of Fraud   Amazon Cracks Down in Wake of Fraud

This user has validated their user name. by: WdrWmn

Thu Apr 6 14:52:41 2017

So, I have a question.  O.k. I get it there is seller fraud from amazon sellers.  But, not all sellers on amazon are committing the fraud.

However, I want to know what amazon is doing to combat the amount of increase BUYER fraud that is going on amazon.  YEP!  You heard me, BUYER FRAUD.  I'm not the only one, that is experiencing an increase in A-to-Z falsified claims on Amazon.  Just within the last week, I've had three claims of 'item not received',  and a claim of 'item not as described'.

Let me give you the quick breakdown:  ''item not as received'', I print all of my labels directly off amazon, and only ship to the address that is given on the site.  The tracking is showing delivered.   I lost all cases.  I appealed all, and I only won one appeal in the case.

With the 'item not as described'.  The guy openingly admitted he didn't like the product and there was nothing wrong with the item.   So, this person decides to return the item without paying for return shipping.  How you ask?  He sent the item as, 'refused' sent back to sender.  YEP.  To be honest, I don't know how the buyer was able to send the package on a refusal, since the package was 'OPENED'.  My understanding, and I've been told if the package is opened, the buyer cannot send the package back as a refused.   But, when we received the package back we had to pay for return shipping.  So, I emailed Amazon customer support and asked them there opinion, on what to do, since I had to pay for going and returning.  Amazon stated, that I was within my right to deduct all S&H charges.  So, that's exactly what I did.  Next thing I know, the buyer emails me and says that's not fair that I deducted S&H charges, and I should have refunded the full amount.  I simply quoted amazon rules and policies.  Next thing I know, the buyer opened an 'item not as described' case against me.  Now, even though we had the whole conversation of the item not be defective on file, the buyer still won.   I lost and got another defect on my account.  

Now, for all you eBay naysayers....if your wondering OH yeah, its worse on eBay.  No, its not.  I've had people put in 'item not received' cases and item not as described cases.  As long as I have that tracking, eBay will always close the case in the sellers favor.   As far as item not as described, if its my fault then I'll accept responsibility.  But, clearly if its not not the sellers fault and the buyer is caught in a LIE or FRAUD, then of course eBay will close the case in the sellers favor.

So, what is going on with Amazon.  They don't even listen to their sellers anymore.   I had a long conversation with amazon seller support and asked them what is the point of tracking, if you are going to refund the buyers money based on an A-to-Z item not received claimed.  He didn't have an answer for me, other than to appeal.  And that got me no where....  

Is anyone else, seeing an increase in BUYER FRAUD!

I was talking to another seller and he had one guy buy three item, and as soon as the item were delivered, they put in an A-to-Z claim and the buyer won the case, even with tracking.

What is going on with amazon??    

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