Amazon Files Major Lawsuit Against International Refund Scam Artists After Losing Millions In Fraud

Global e-commerce giant Amazon.com Inc. AMZN has launched a lawsuit against an international theft ring, accusing it of orchestrating a refund scam, defrauding millions from the company.

What Happened: As per the lawsuit filed on Thursday, Amazon accused the notorious group, known as REKK, of allegedly deceiving it into issuing refunds for products that weren’t returned, reported Bloomberg. 

As per the e-commerce giant, the scam involved purchasing items from Amazon and then requesting refunds without returning the purchased items.

See Also: Is Amazon Gearing Up for a Fashion Showdown? Drastic Fee Cuts Signal a New Retail Battlefront

The lawsuit, filed in a U.S. District Court in Washington, implicates REKK and about 30 individuals from six countries, including the U.S., Canada, the U.K., Greece, Lithuania, and the Netherlands.

The fraudulent scheme reportedly incorporated hacking into Amazon’s systems and bribing company employees to greenlight fraudulent refunds. The company has identified seven ex-employees who allegedly participated in the theft by accepting bribes to approve the fraudulent refunds.

As per the lawsuit, REKK promoted its refund services on social forums like Reddit and Discord and exchanged communications with the fraudsters through the Telegram messaging app. The group allegedly levied a commission based on the value of the items clients wanted without paying for them.

In the lawsuit, Amazon recorded over a dozen transactions from June 2022 to May 2023 that resulted in fraudulent refunds. The report noted that the range of items involved included gaming consoles, smartphones, laptops, and even a 24-karat gold coin. 

Last year, Amazon invested $1.2 billion and employed 15,000 individuals to combat theft, fraud, and abuse on its platform. 

Dharmesh Mehta, Amazon's vice president of Seller Services, revealed that Amazon employs several measures to counter fraud, like issuing warnings, closing accounts, and barring those involved in refund fraud from opening new accounts.

Why It Matters: This lawsuit comes at a time when Amazon is continually expanding its services. 

Earlier this week, the company began testing a $9.99 monthly unlimited grocery delivery subscription for its Prime members in three U.S. cities. 

This incident highlights Amazon’s challenges in securing its platform and protecting its services from fraudulent activities while expanding its offerings.

Check out more of Benzinga's Consumer Tech coverage by following this link.

Read Next: Battle in the Clouds: How Amazon and Google's Allegations Might Reshape Microsoft's Strategy

This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.