Over two years, four brothers from New York scammed Amazon out of nearly $19 million. You see, on Amazon’s Vendor Central, merchants act as wholesalers. Amazon buys its products from the wholesalers and resells them to customers at a markup.
Knowing this, the four brothers created a wholesale business they used to over-ship products to Amazon.
They invoiced Amazon for large numbers of products the company never ordered. Additionally, the brothers would ship Amazon more products than the company had ordered. And of course, they billed Amazon for the extra products.
In one instance, Amazon ordered 12 cans of disinfectant spray that cost $94.03 total. Instead, the brother’s wholesale company shipped Amazon 7,000 toothbrushes that cost $94.03 each. In this case, the brothers billed Amazon for over $650,000.
They did this exact scheme with many products sold on Amazon. Shipping Amazon 10,000 units of a particular item, even if the company had only requested a hundred or so.
When Amazon detected the fraud, they would shut down the wholesale account. But the brothers created new wholesaler accounts. They used fake names, e-mail addresses, and even a VPN (Virtual Private Network) to block their internet address. When finally caught, each of the brothers was charged with wire fraud and money laundering.
Amazon (and other online stores) is a huge target for fraud and counterfeits.
The company relies upon a mix of human and computer safeguards to prevent fraud, but they can’t stop it all. And scammers like these brothers can fall through the cracks.
But it’s not just over-shipping products. Counterfeiters can get their products listed for sale on Amazon. They get listed as “the real deal,” even though they are fakes. And even if it’s not Amazon, all online retailers have the same problems with counterfeits.
Many people have ordered clothes, shoes, bags, gear, accessories – you name it – thinking they’re getting one thing. But when it shows up in the box, it turns out to be nothing more than a counterfeit.
And now that several parts of the country are locking down once again, online ordering is going to continue to skyrocket. So, with the onslaught of fraud and fakes, it’s ultimately up to you and me as the consumer to decide if a product is legitimate or not.
To help you know, here are a few things to look for next time you are buying a product online. (Or in my case, to know about all the stuff my wife buys online.)
Pay close attention to the shipping details. One of the reasons that people love Amazon is because of Prime since people receive their products in a day or two and since the item is guaranteed by Amazon.
But no matter what product you are buying, you need to look at the shipping details. Check to see if the company is charging a high shipping price. Also, look at how long it estimates it will take the product to arrive.
If a product won’t arrive for a month or two this is a red flag that the item is likely coming from overseas (China). Foreign companies often list products on Amazon. These same companies will get a P.O. Box in the US just to have a US address. But again, if they say they’re from Florida and are going to take 30 days to get you the item, beware.
Next, be sure to inspect all the product images provided. There should be multiple pictures of the item from different angles. And any legitimate company selling products online is going to use high-quality pictures to make their product look great.
They won’t use a low-quality image that someone snapped on their cell phone. Also, look for inaccuracies in the images. A company should stand behind its product and not need to use altered pictures. If the description of the product and the photos don’t match, then clearly avoid the item.
Spend time reading the reviews. Don’t just look at the number of reviews and think a product is good. These days, scammers have ways to leave reviews even if the person never purchased the product. Plus, there are plenty of “puppy mills” that a scammer can pay to leave a ton of positive reviews.
So, don’t just read the first few reviews. Scour the pages worth of reviews and read a handful of both the good and bad. You should see how much detail folks go into, and if it sounds like they use the product.
If you think that a review might be fake look at other reviews from the same person. Are they all the same thing? Does it look like the person is copying and pasting the same review for multiple products?
You should also research the seller before buying. Look at their other products and watch for warning signs such as many complaints. And if you notice any red flags with a particular item, reach out to the seller.
Legitimate companies should gladly answer questions or send you information about their products. They’ll want you as a happy, repeat customer.
So, the next time you go to make a purchase online, use this list to keep yourself from getting scammed by fraud or a counterfeiter. I realize this might sound like a lot of work, but it should only take a few minutes and it will save you a huge headache in the long run.
