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How to Protect Your Business from 5 Amazon Seller Scams in 2024

Threecolts
Geri Mileva
Published
February 15, 2024
Modified
February 15, 2024
Protect Your Business from Amazon Seller Scams

The profitability of selling on Amazon and the opportunity for remarkable financial gains make it a highly attractive platform for online selling. A study reveals that 63% of Amazon sellers reach profitability within a year. Along with this potential for high profits comes the proliferation of different fraudulent schemes.

A vast marketplace like Amazon gives scammers an extensive pool of potential targets anywhere in the world. With Amazon reporting ever-soaring profits, such as its revenue of $169.961 billion (a 13.91% increase year-over-year) for the quarter ending December 31, 2023, cybercriminals will definitely want a piece of that pie. Moreover, daily earnings at Amazon are suggested to be approximately $1.29 billion daily.

This positions the platform as a major target for scammers and counterfeiters. Online eCommerce scams top the list of consumer threats in 2022, according to the Better Business Bureau, as cited in a report published in late 2023. The report shows that the total traffic volumes of eCommerce scams reached 6.3 million visits during seven months.

As fraudsters continuously evolve their tactics, it’s crucial to equip yourself with the knowledge to detect scams and protect your business from falling prey to deceitful schemes. In this article, we’ll cover the five seller scams to watch out for and how you can avoid getting entangled in their deceptive web.

How Amazon Scams Work

Given the ease of creating accounts on Amazon and a minimal barrier to entry, seller scammers pose a huge risk to unsuspecting Amazon shoppers. Their sneaky ability to infiltrate the platform and exploit loopholes using convincing language has allowed them to thrive persistently. When their ingenious scams are exposed, they employ other tactics to continually trick more victims.

Amazon declared in its Brand Protection Report that it took proactive measures to ensure authenticity and protection for its customers, sellers, and vendors by eliminating or blocking 99% of listings believed to be counterfeits or involved in fraud, infringing, and other types of exploitation.

The mechanics of scams vary based on their type. In many cases, it has to do with people’s innate trait of trusting in Amazon. Forbes attributed the trust customers have in the Amazon brand to its ability to deliver a satisfactory product experience. 

While there are various ways Amazon scams work, there’s only one end goal: to steal personal information from you and profit from it. Scammers may pretend to be Amazon representatives, reaching out to you regarding an order or informing you about a problem with your account. Their objective is to deceive you into willingly providing your account credentials.

Types of Amazon Marketplace Scams to Watch Out for

Like other eCommerce platforms, Amazon is susceptible to numerous types of scams. Sadly, scams have been around for a while and continue to exist, with scammers constantly finding ways to exploit loopholes. The following outlines the five most common seller scams today. 

Fake Product Reviews

According to research cited in Consumer Reports, 42% of product reviews at Amazon are not authentic. It’s also reported that several reviews are created by AI bots. Shady sellers manipulate product reviews in various ways. One is by paying people to post fake five-star reviews to boost their products. In return, they get discounts on future purchases. Unscrupulous sellers may also hire someone to leave a flood of negative reviews for competitors. 

There are telltale signs of fake reviews. One is when you see a flood of glowing reviews posted on the same day, as can be seen on the timestamps of the reviews. They may also have identical phrasing that gives off the impression of being fabricated. Checking the reviewer’s profile can help you verify the authenticity of their reviews.

Review scams are widespread on Amazon, with many scammers persuading users to write reviews in exchange for cash or a free item. Amazon enforces stringent rules against such reviews. Violating the platform’s terms and conditions could potentially lead to the suspension of the account. 

Phishing Scam

Amazon phishing scam

Phishing is an old scheme that scammers today still use as it’s a proven method of acquiring personal and financial details. Culprits may do it under the guise of verifying an account or confirming an order. They use websites and emails with misleadingly authentic logos and text layouts and often pretend to be official Amazon employees. 

These fraudsters target the credit card numbers, bank details, and account access of unsuspecting shoppers and convince them to divulge their personal data. Some distinctive characteristics of phishing include incorrect grammar, unsolicited attachments, requests to follow odd links and disclose personal data on external websites, and a sense of urgency.

Amazon phishing emails commonly use a strange email address and inform the recipient that their account is suspended and will remain locked unless they confirm their personal details. The email will usually include a link that leads to a fake website. 

The primary thing to do when you receive such emails is to avoid clicking on any link in the email and deleting it instantly. Staying vigilant, watching out for red flags, and proceeding with caution are critical steps to ensure your personal data stays safe from cyber crooks.

Account Hijacking Scam

Account hijacking is when a scammer hacks your Amazon seller account and takes control of it. The scammer can exploit your account in various ways, starting with changing your account settings, including your account password or email address, to lock you out. 

Additionally, hijackers can take advantage of your account by making unauthorized purchases using the stored payment information saved on your account, modifying your shipping address, and stealing your personal information. Even worse, they can use the account to commit more scams or frauds. Eventually, a hijacking can impact your bottom line and disrupt your overall business operations. 

Protect yourself from account hijackers by setting up two-factor authentication on your account. Use complex and stronger passwords. Stay vigilant by monitoring your account for any suspicious transactions, unauthorized activity, or changes to your account settings or product listings. 

ASIN Piggybacking

ASIN (Amazon Standard Identification Number) piggybacking involves choosing a popular product and selling it using the same ASIN but at a lower price. In essence, another seller capitalizes on the success of your product, hence, the term “piggybacking.”

For many, piggybacking is an accepted business practice, but it becomes problematic when the other seller labels their product with a real ASIN but sells cheap knockoffs or substandard items, a scheme often exploited by scammers. This can result in buyers receiving inferior products, possibly leading to diminished sales or damage to the seller’s reputation. 

While ASIN piggybacking isn’t explicitly illegal, it can result in account suspension or termination. To mitigate this risk, consider enrolling your brand in Amazon’s Brand Registry to keep unauthorized sellers from listing under your ASIN. Monitor your listings for piggybacking instances and immediately remove unauthorized ones to protect your brand’s integrity. 

Amazon Sponsored Ads Click Fraud

The Amazon Sponsored Ads scam occurs when a bad actor, or a competitor, repeatedly clicks on your Amazon Sponsored Products ads until your pay-per-click (PPC) budget is completely depleted. When this occurs, you meet your budget caps early and run out of PPC budget after just a few hours. 

This malicious tactic severely lowers your conversion rates, drives up advertising costs, and decreases your return on investment. Amazon recognizes the widespread presence of this type of click fraud. It has a policy that tracks invalid spends and automatically adjusts the budget in case of fraudulent clicks, but it may not fully offset the losses incurred from campaigns that ran out of budget. 

To safeguard against click fraud, consider implementing click fraud prevention software capable of recognizing and blocking suspicious clicks. Set up robust filters that can block malicious IP addresses. Consider targeting specific geo-locations for your ad campaigns rather than casting a wide net to minimize instances of click fraud. Regularly monitor your ad campaigns to promptly identify and deal with suspicious activity. 

Amazon also offers the Fraud Detector service, created to recognize and detect possible scams within milliseconds. Designed to identify illegal activities like account takeovers and seller scams in online marketplaces, it serves as a strong defense for securing your business from fraudulent behavior.  

How to Report Suspicious and Fraudulent Activities on Amazon

Report Suspicious and Fraudulent Activities on Amazon

Suspicious activities are a top threat to Amazon as they pose a substantial risk to the integrity of the platform and have the potential to jeopardize the trust established between sellers and buyers. If you have received suspicious communication or are doubtful of a seller or their product, report it to Amazon following these steps:

For suspicious products:

  1. Log in to your Amazon account.
  2. Go to the product page. In the product details, click “Report incorrect product information” and select “This product or content is illegal, unsafe, or suspicious.”
  3. When prompted, provide details about the issue and click “Submit.”

To report suspicious communication, such as a phone call, message, or other forms, go to the “Report Something Suspicious” page and find the option that applies to your situation. Follow the instructions provided in the option you choose. This page is for reporting scams, fraud, and phishing. It also includes steps to report suspicious activities to the Federal Trade Commission (FTC). 

What to Do If You Have Given Scammers Your Personal Information

If, by mistake, you’ve inadvertently shared your sensitive data with a scammer, take the following steps to reduce potential risks and protect yourself:

  • Change your passwords. Log in to all the accounts where you shared personal information and change the passwords right away. This is especially urgent if you have shared your banking and personal data.
  • Activate the two-factor authentication (2FA) feature. If your password is compromised, criminals won’t be able to access your account without the second verification step.
  • Report the incident to Amazon. Contact their customer support through the “Help” or “Contact Us” features. Another option is to go to the “Report Something Suspicious” page, click on the link that best describes your circumstance, and follow the given instructions. 
  • Contact credit bureaus. Personal information in the wrong hands can lead to identity theft. Act quickly by contacting your credit bureau to set a fraud alert and implement a security freeze on your credit reports. This proactive step keeps scammers from creating unauthorized accounts using your name. 
  • Report the scam to the FTC. Visit IdentityTheft.gov for the steps to take if you’re at risk of identity theft after disclosing your personal information. FTC Consumer Advice also provides instructions on what to do if you’ve fallen victim to scammers.

What Scammers Can Do with Your Data 

Scammers who get their hands on your personal information can use it in various scams. Below are the different types of information that scammers frequently target and how they use it to commit identity theft. 

  • Home address. Scammers can use your name and address to reroute your letters to an address they control. Called the change-of-address scam, this scheme sends all your mail—which may include your social security number (SSN), bank account statement, credit card number, and financial account credentials—to a scammer’s location, exposing you to an extremely high risk of identity theft. 
  • Phone number. False Amazon calls rank among the top phone scams in 2023. A report cited that, on average, a mobile phone user gets 14 spam calls every month. Amazon impersonators lead the list of top phone scam perpetrators. 
  • Email address. Scammers who obtain your email address can use it to imitate technical support messages and trick you into disclosing data that results in account takeovers. They can also use it to impersonate you and execute phishing attacks and scams on your contacts.
  • Bank account number. A cybercriminal who gets hold of your bank account number can carry out numerous unlawful acts using your name, such as engaging in unauthorized ACH transfers and payments, forging counterfeit checks, filing phony tax returns, carrying out tax fraud, etc.
  • Social Security Number (SSN). Using your SSN, along with your other information, a scammer can open financial accounts, obtain medical care, steal your benefits, withdraw money from your bank account, open new credit card accounts in your name, obtain a fraudulent driver’s license and impersonate you, and many other illegal activities.  

How to Secure Yourself Against Amazon Seller Scams

Secure Yourself Against Amazon Seller Scams

Being an Amazon seller means that you’ve dedicated time and financial resources to establish and expand your business presence. Therefore, safeguarding it is vital. Protect it by taking proactive steps to thwart scammers. 

  1. Learn about the most prevalent scams. Keep abreast of the evolving tactics of cybercriminals to more effectively secure your business against potential risks. While Amazon is aware of the existence of scammers, it hasn’t been able to completely prevent them from consistently setting up accounts. Connect with cybersecurity experts and consult with local authorities to gain insights into the evolving landscape of scams. 
  2. Recognize the signs of a scam. Become familiar with the distinctive and telltale cues that may indicate fraudulent activities so you can steer clear of potential scams. Watch out for red flags and be vigilant of sellers exhibiting suspicious behaviors and characteristics, such as limited histories and ambiguous return policies.  
  3. Invest in identity and malware protection to secure your sensitive data from possible cyberattacks and security threats. Keep a strong password and set up a 2-step verification to improve security. Amazon Web Services also offers tools and features that help you protect your account and data against unauthorized access and reduce security risks. 
  4. Use only Amazon-approved payment methods. Avoid sellers who request payments outside of the platform or insist on using non-traditional modes of payment. Amazon is known to provide robust security protection in place, with both sellers and buyers getting protection from fraudulent activities. Its payment methods also undergo comprehensive vetting, so the platform’s transaction integrity is maintained.  
  5. Use an Amazon seller tool with compliance and security features for protecting customer data and business information. Threecolts, AMZScout and Viral Launch are among the leading options, offering comprehensive and cutting-edge solutions that help you with marketplace management and growing your business while ensuring compliance with the platform’s rules and regulations. 

Despite Amazon’s latest counterfeiting initiatives using advanced machine learning methods, the incidence of Amazon marketplace scams persists, accompanied by the emergence of new tactics. This highlights the formidable task of regulating scammers and the crucial need for improved security on your part. 

Final Thoughts

Staying vigilant and informed is crucial in ensuring your Amazon seller experience goes smoothly. Be aware of the red flags and the widespread scams. Implement robust security measures to safeguard your business from possible threats. Make the protection of your personal and business information an utmost priority, and promptly report any suspicious activities.

Maintaining a proactive approach and being committed to staying informed can help you navigate the Amazon marketplace securely. Incorporate the above-mentioned strategies into your business practices to improve your protection against online scammers and to create a more secure environment for your business.