Amazon — the good, the bad and the ugly

How the biggest online vendor opened its portal to everybody —and unsurprisingly attracted the usual bevvy of fraudsters

Let me start by saying that I am a big Amazon fan and have been a vigorous user of its services for over twenty years. I know that there are people who say that they are putting bricks-and-mortar outlets out of business, and that Jeff Bezos may be on his way to becoming the world’s first trillionaire (which they consider obscene). I know that wife Ingrid is against getting an LED light bulb in a large cardboard box full of bubble wrap. But she would have to spend a lot of time and petrol money for the car to get it at the hardware store, without being guided in her choice by the buyers’ testimonials. I only need a few clicks to get the best product — at a slightly lower price.

In any case, I have been a very satisfied customer — until March 2020. That was when the pandemic struck, and we were forced to lock down, restricting our outdoor activities to long walks or bicycle rides in the beautiful foresty area where we live. The problem, however, was that I had an e-bike and Ingrid was always two hundred yards behind with her traditional, electrically unassisted bicycle.

It was time to get her an e-bike as well. So I went to Amazon and found the perfect model for her. The regular price was €1,499 but there was an offer for €715 which I accepted. About a week or so later the vendor wrote me that they were out of stock and that my order had been cancelled. So I tried again — other models, which for some reason were discounted to exactly the same price: €715. My orders were duly acknowledged, delivery dates assigned, but no bike arrived, and no payment was debited from my Amazon account (I checked!) Then on my fourth attempt, I took a closer look at the confirmation. In it the vendor instructed me to transfer the amount directly to the “Amazon payment account”, which I was given. But it did not look at all legitimate (“HSBC UK BANK PLC”). Why couldn’t they take the amount from my Amazon account, as usual?

So I consulted Amazon and immediately received an answer: the offer was a scam, I should not transfer any money directly. “You have to be extremely careful with such reduced price offers,” a very nice lady told me on the phone. We had a very intense (but friendly) debate. I have to be careful? When ordering on Amazon? Imagine, I said, if a department store had a sign saying “Customers are advised to be very careful to avoid scams and fraud attempts in this shop”. Isn’t it the job of the store? At least the nice lady promised to look into the e-bike scam and I promised to send her my records of the scam attempts.

The next day all €715 scam offers had disappeared from the Amazon e-bike pages — they had actually done something about it! But a few days later they were back, with new vendors making the same kind of offers. For a few weeks I kept corresponding extensively, with Andreas, Sneha, Cecilia, Lebo, Arun, Kerstin and Raju, most from a service called stop-spoofing@amazon.com. I kept sending them new examples, every second or third day — new scam attempts. Here is one example:

Nice bike, usually €1799.95. But four of the five offers are scams.

On a typical day I found no less than 22 fraudulent offers on four Amazon e-bikes that were of interest — and just one genuine (I suppose) offer. I sent them lists of dozens and dozens of suspicious vendors, who promptly disappeared — but were soon replaced by new scam attempts.

In the end I gave up and ordered an e-bike from a local vendor: a Fischer ECU 1401 from Lidl. It cost €1,193.90, which I paid with a click in PayPal. A week later the bike was delivered. It is great, way better than my old e-bike.

Finding the reason

In my discussions with Amazon I was repeatedly told that customers must always be very, very cautious to avoid fraud when buying things on the Amazon Marketplace. “Marketplace” was the key word that put everything into perspective. I asked son Tommy to explain. Amazon, he told me, had for decades had enormous power for online purchases. To sell your product through Amazon you usually had to offer it to them for storage, billing and delivery. They could pick and choose whomever they liked. Then they opened their service to everybody: you could advertise and sell directly on the Amazon site.

I applaud the decision by Amazon to set up the Amazon Marketplace where now anyone can sell their products online, taking full advantage of Amazon’s infrastructure. But: in poured the thieves and fraud artists. Tommy looked up one of the fraudulent e-bike vendors and discovered he was offering over half a million high-priced products at cheaper rates (in almost every case exactly €490, €715, or €735).

The scam appears to be to somehow acquire accounts that have done legitimate business in the past, but shown no activity for many months or years. The scammers use them to bait people into transferring money directly instead of going through Amazon. “The number of such accounts available must be huge, and they can switch to new ones on short notice,” Tommy said.

So the main thing to do is not to avoid buying things on the Amazon Marketplace. Looking back at my records I realize I have ordered countless products from there in the past, all without any problems. You must just studiously avoid transferring money privately from your bank to an “Amazon payment account.” I believe that Amazon never sets things up that way.

Finding a solution

One thing is clear: Amazon must identify and pursue these scammers and fraudsters that are making use of their online vending service. I have many ideas on how to do this, and started writing them up. For instance Amazon could

  • monitor long inactive accounts (require accounts that have been inactive for a few months to be verified before they can start selling again — but they are probably already doing exactly that);
  • monitor vendors selling a variety of hundreds of thousands of expensive products;
  • vendors that used to sell something completely different;
  • vendors selling products using the same prices (for some reason);
  • and of course vendors asking for a customer e-mail before purchasing.

Before I could finish my “advice to Amazon” letter, Tommy asked me if I didn’t think they were already spending hundreds of millions of dollars, and highly qualified programmers, to solve the problem? “My guess is that Amazon has adopted a policy where they don’t just kick out anyone immediately, because that would cause a lot of anger and frustration amongst legitimate sellers and drive them to other platforms. So they presumably are focusing on trying to reduce the damage done by illegitimate sellers. They are clearly getting rid of them, but fake vendors seem to be able to simply come back with another seller faster than Amazon can keep up.”

Today, July 11, 2020, 14:00h, I checked the first page of e-bike offers. Most offers seemed legit, except the ones for the NCM Aspen E-Bike (three vendors), the NCM Miami 26" Cruiser (two vendors), and the Telefunken Pedelec MTB (three). All offers are for exactly €715,00.

So try harder, Jeff. I see you guys are working on the problem, but there is still a long way to go!

Written by

Frederic Alois Friedel, born in 1945, science journalist, co-founder of ChessBase, studied Philosophy and Linguistics at the University of Hamburg and Oxford.

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