Amazon lost millions of dollars after a group of fraudsters exploited a vulnerability in its returns and refund system, according to a lawsuit filed by the company. The scammers, who are not being identified, could be obtaining refunds for items they never purchased by creating fake return labels and shipping empty boxes to Amazon. The plan allowed them to steal high-priced items such as MacBooks, iPhones and gaming consoles.
The lawsuit, filed in the U.S. District Court for the Western District of Washington, alleges that the fraudsters used various methods to exploit Amazon’s system. In one case, they created fake return labels using stolen account information. In another example, they used software to create fake return labels.
Once the fake return labels were created, the scammers sent empty boxes to Amazon. When Amazon received the empty boxes, it processed the returns and refunded the amount to the fraudsters’ account.
The exact amount of money the fraudsters stole is unknown, but it is believed to be in the millions of dollars. Amazon wants to recover the stolen money as well as damages.
“We are committed to protecting our customers from fraud,” Amazon said. “We are investigating this case and will take appropriate action against those responsible.”
The lawsuit against the fraudsters is the latest example of the growing problem of returns fraud in online retail. According to a report from the National Retail Federation, return fraud cost U.S. retailers $10.3 billion in 2018.
The report found that returns fraud is most common in the apparel, electronics and home goods categories. It is also more common among customers who have returned items in the past.
Retailers are taking several steps to combat returns fraud, including using software to identify suspicious return patterns, requiring customers to provide proof of purchase with their returns, and limiting the number of returns a customer can make.
Amazon also takes measures to combat returns fraud. The company has implemented several security measures to prevent fraudsters from exploiting its system. It also made it more difficult for customers to return items by requiring them to provide a reason for the return and print a return label.
