Beware of the Rise of Scam Sellers on Amazon

If you’re like most people, when you heard, back in August, 2016, that 200 million Yahoo users had been hacked, you probably shrugged it off. Maybe you had no Yahoo account, or you had one, but never used it. Maybe you had changed your password recently so you felt it didn’t affect you. Well, if you thought any of these things, you were wrong. You could still be affected by this Yahoo hack. If you bought or buy anything on Amazon, you may not ever receive it. That may be because you have just bought something from a fake seller. Nothing will happen to you except for the inconvenience as Amazon will refund you for your purchase. However, if you are a seller associated with Amazon, you could be in big trouble.

Handmade jewelry seller, Amy Jennings, was understandably surprised when Amazon told her to ship the gun holster that someone had bought from her firm. She had not made any jeweled gun holsters recently. She suspected something was wrong and decided to check her Amazon account. This, she could not do. The account had been taken over by someone else who was pretending to be her and her firm. This meant that any money made from sales of her product had gone into the hacker’s account which had replaced her own. If you think that Amazon will refund the losses that these businesses incurred, think again. Amazon is a business. They don’t simply shell out money for customer refunds from their own bank account. They charge the account of the seller who failed to deliver the goods. Yes, the seller may eventually get this money back if Amazon accepts responsibility for the hack, but that is not guaranteed. A number of sellers are suing  Amazon for their mismanagement and their loss of much more money than Amazon is offering them in compensation. Some have even had their accounts completely drained by the hackers.

Beginning in late August, 2016, the number of scam sellers on Amazon grew at such a pace that, by December, Marketplace Pulse, the e-commerce market analyst site that assists Amazon, opened a new site called Scam Sellers, because “the more we looked at it, the more aware we became that this is not a one-off issue but instead a continuing effort to exploit the marketplace.” It’s no coincidence that fake seller sites ramped up during the holiday buying season, most scams do. However, the number of fake sites continued to rise thereafter. If you visit the Scam Seller site, you will see the latest fake sellers on Amazon. In the past month alone, the company has identified 2,541 scam sellers. However, this story has only recently been attracting the attention of the mainstream media.

amazon scams.jpg

The situation is rapidly worsening and Marketplace Pulse reports that “during the past few days we detect roughly 75 new scam sellers every day, out of which 20 or so are previously dormant, and now hijacked accounts. It’s unclear how this is achieved, but it is happening at scale, not as here-and-there events.”

So how did we get to this point and how is this scam perpetrated? Well, first of all, we have to get back to the original Yahoo hack of 2012. Over time, the personal data from this and other hacks appeared for sale on the deep web, like it did in August, 2016. The data, in itself, does not include Amazon account information. The problem is that many people tend to use the same password, or variations on it, for multiple sites. Someone, for example, might use the password, ‘Williams’, on one site and ‘wi11iams’ on another of their sites. Criminals may first identify individuals who run sites affiliated with Amazon and then hope that they use the same password there that they use on other sites that the scammers already have the password for, such as Yahoo.

Once the scammers are on the victim’s Amazon site, Amazon assumes they are the real owner. They can, then, change their login information and change the bank account to which money from sales is sent. Of course, if they want, they can just try to steal money from the owner’s account and leave. Using this seller’s site, they can then offer phantom products on Amazon at more than competitive prices. Recently, they’ve been selling the popular gaming console, Nintendo Switch, at well-below normal prices. Customers must think they have found a great bargain, when, in reality, they have found a great scam. Once again, if it seems too good to be true, it probably is.

The scam seller will most likely keep the site until it looks like they might be found out. That may be no more than a few weeks or a month. They may claim that delivery will take up to a month so that Amazon is not concerned about any customer complaints until after that time. My own investigations have shown that these scam sites are using a number of other tactics as well. The criminals will sometimes use the trusted identity of the original owner to set up a fake site with another storefront name. They will often seed the bogus site with positive reviews upon taking it over to give it credibility. Some will send fake tracking information to buyers to keep them from reporting the site to Amazon and allow them more time to continue fooling buyers. The customer may even get a notice that the order was delivered but to a different address, which gives the seller some extra time while the buyer tries to, ineffectively, negotiate the source of the problem. Here are some typical reviews of scam sites.

“My order summary stated that these items were delivered 3/19/2017. Did not receive them. Tried to contact seller, and was informed that they no longer did business with Amazon, so they were unable to be of assistance.”

 “I have placed this order after research and waiting to receive. Unfortunately order got cancelled by giving explanation someone hacked the account. Such a full waste of time and efforts. Very poor service and customer support. I wish if I could zero star.”

 Notice in the last example that it appears the seller got their site back and blamed hackers for the problems the buyers faced. But is this true? Could this be just another ruse used by the hackers? I can only confirm that the site is no longer listed on Amazon. If, however, the original owner did get their site back, they would have to deal with the tremendous blow to their reputation caused by the bad reviews posted during the time the site was controlled by hackers. In such a case, I would recommend starting over with a new name.

It is relatively easy to spot a scam seller if all the recent reviews are negative. It’s a different case if positive reviews are thrown into the mix as you can see from the following hacked seller.

amazon custormer complaints

So how can you keep from getting scammed by fake sellers? What are the warning signs?

 Well, first of all, if you are suspicious about a seller, you can always go to scamsellers.com and use the search function to see if the suspicious site is listed as fraudulent. If it is not, you’ll have to use other warning signs.

1. They are a new site offering many products at prices too good to be true.

2. Shipping by Amazon (FBA; Fulfillment by Amazon) is not offered and seller gives long shipping times (2-4 weeks).

3. Weird names for a business. Here are some names of actual fake sites.

filez69

lnland49

rcimaritza

Keith Backhaus

012525428

  1. Company is listed as existing outside of the U.S. but ships from somewhere within the U.S.

Companies listed outside of the U.S. are not necessarily evil. Check the most recent reviews as well as shipping times. Any company listing a 4 week shipping time may be worth avoiding if you want to play it safe.

The growing threat from fake sellers has led Amazon to take more drastic actions. Since many scam sellers use quick hit-and-run attacks, it is important for Amazon to identify them as soon as possible. To this end, they have implemented an automated seller suspension algorithm which can identify and block scam sellers within hours after they appear. Unfortunately, it can also block good sellers for a number of reasons and freeze their funds for 90 days. Make sure you follow Amazon guidelines before you set up your site or be prepared to be as frustrated as one disgruntled seller who wrote that, “Amazon just destroyed my business”.

In my opinion, Amazon is still the world’s best store. When I have had problems with orders, Amazon has always refunded me without hesitation. But what is good for customers is not always good for sellers. The opinion of sellers about Amazon is mixed as can be seen in the following from the Amazon Seller Forum site.

 “I’m split 50/50 with amazon, sometimes I really dislike it here, I suppose I’m a little bitter with how things have changed here. I also don’t like the way they treat sellers, suspended because a misguided or lying buyer can put your account in jeopardy, that’s crazy, feel ebay are a bit more seller friendly.”

 When the buyer comes first, the burden must be shifted to the backs of the sellers. In the case of scam sellers, it seems that this burden shift is justified. Using the same password on multiple sites or using easily guessed passwords is as bad as forgetting to lock the door of your shop when you go home at night. On the other hand, some seller complaints seem justified, such as the complaints about the lack of or inadequacy of support.

As long as Amazon continues to be the highest profile market on the internet, it and its sellers will be the target of attacks. It is difficult for Amazon and, by extension, sellers to keep up with all the attack vectors that arise. The latest, for example, uses Amazon’s Buyer-Seller Messaging service and two-factor authentication to trick sellers into handing over personal information. It’s clear that Amazon must work more closely with its sellers to mitigate such threats. Rapid communication and comprehensive support are vital. Buyers can play a role by letting Amazon know of questionable seller behavior and using better judgement when purchasing. None of this will completely stop hackers, but it will make their lives more difficult.

About Steve Mierzejewski

Marketing consultant for InZero Systems, developer of the next generation in hardware-separated security, WorkPlay Technology. I've worked in Poland, Japan, Korea, China, and Afghanistan. I'm a writer, technical editor, and an educator. I also do some work as a test developer for Michigan State University.
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