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Amazon Sues ‘International Fraud Organization’ Over Phony Returns

Amazon has sued an international group known as REKK for allegedly stealing millions via fraudulent returns.

The suit, filed last week in U.S. District Court in Seattle, alleges that REKK — which it calls an “international fraud organization” — worked with Amazon customers and former employees to carry out the fraud.

“In this scheme, bad actors who want a free product (like an iPad) pay REKK a fee (such as 30% of the product’s cost) to obtain a fraudulent refund,” the suit said.

“REKK uses sophisticated methods to obtain the refund, including socially engineering Amazon customer service, phishing Amazon employees, manipulating Amazon’s systems through unauthorized access, and bribing Amazon insiders to grant refunds.”

The suit adds that the defendants tricked Amazon into processing refunds for products that are never returned. Rather than returning the products as promised, the defendants keep both the item and their refund.

The company further alleged that REKK capitalizes on Amazon’s “reputation and goodwill” by using the tech giant’s trademarks to help generate interest in REKK.

“Amazon customers may be drawn to REKK’s channels under the initial impression that REKK offers legitimate return services, which are detailed directly underneath Amazon’s logo,” the suit says. “As Amazon customers continue navigating REKK’s channels, however, the illegal nature of its services become more apparent, and REKK benefits from the attention raised by the use of Amazon’s trademarks.”

PYMNTS has reached out to REKK for comment but has not yet received a reply.

As noted here in August, a lenient return policy can come with a cost. 

“Customers now anticipate a frictionless and cost-free returns process, and if that also means ditching the receipt for proof of purchase, retailers are willing to forgo it,” that report said. “By allowing returns without receipts, retailers demonstrate a commitment to convenience. In turn, this enhances customer satisfaction and fosters a positive perception of the retailer.”

A more liberal return philosophy can go a long way to fostering customer loyalty, as shoppers are more likely to return to retailers who trust them enough to process returns without receipts.

However, sometimes, those policies can come back to haunt retailers. For example, this year saw the case of a Connecticut man accused of acquiring nearly $300,000 in fraudulent Home Depot credit by visiting stores across multiple states, taking high-value doors, and returning them without providing a receipt.

Alexandre Henrique Costa-Mota, 26, has been charged by the U.S. Attorney’s Office with wire fraud and a conspiracy to commit wire fraud.