New eBay to Amazon Arbitrage Fraud Operating out of Sri Lanka
FTE Published on Saturday, November 2nd, 2024
As scams go, this one is well thought through—genius even—and no one is talking about it. Furthermore, eBay and Amazon don’t appear to care. I raised multiple complaints with eBay (five in total) offering documentary evidence, and as I write this, I see that the seller is still operational. Hopefully, this post will help educate both buyers and sellers.
As a seller, I became a victim of this, so I took the time to investigate and arranged a test order so that I could work out exactly what the scammers were doing.
This is how it works:
An eBay account is set up in Sri Lanka. I expect it from an individual in that country or another country outside the UK, but using a proxy to make eBay think they are residents of Sri Lanka. I’m 95% sure it’s the former.
The account is set to Private. eBay still allows this, so all addresses, phone numbers, and other contact information are hidden, except the country, which is noted as Sri Lanka. They then show that the product ships from a “UK Warehouse.”
The seller finds popular products sold on both eBay and Amazon , with identical listing information.
They then use eBay’s “sell it yourself” feature to copy that listing onto their own eBay account. Yes, eBay also allows this too, regardless of copyright or trademark implications.
Now that the seller has a nice “copied” eBay listing, they will set the price lower than anywhere else on the internet. For example, a product that sells for £39 on both eBay and Amazon would be listed for around £34 on their eBay listing, cheaper than any other sales platform. It is sufficient to entice customers but not too low to stand out as a scam. The trap is set.
An unsuspecting customer orders. Obviously, the seller has no stock, so they have to dropship this order. First, they will create a customer account on Amazon using their eBay customer’s address details. They do this without the customer’s knowledge or permission.
Using the newly created “fake” Amazon account, they order the product from a legitimate Amazon seller and pay the full £39.
The unsuspecting Amazon Seller is not aware that they are drop shipping or what is about to happen next, so they ship the product as if it were a standard order. The billing address and shipping address are the same on the Amazon order, so these orders are very hard to distinguish.
The eBay customer receives the order and is unaware that it was shipped via an Amazon Seller and probably doesn’t care anyway. Besides, it is what they ordered, so they leave positive feedback. This then starts to legitimise the eBay store.
Once the tracking information from the “fake” Amazon account shows as delivered, they will update the sales order on eBay. Then comes the fraud.
Even a maths dropout will tell you this isn’t profitable. Sell an item on eBay for £34 (more like £28 after fees) and then purchase it on Amazon for £39 to get it shipped to the customer, doesn’t work.
It makes no sense until the legitimate seller on Amazon receives a charge back notice via the Amazon account used to place the order to be delivered to the customer. They are using stolen credit cards. It doesn’t raise any alarm bells with Amazon because they are creating new “fake” accounts each time with the contact details of the eBay customer. It won’t be picked up as a serial fraudster. Furthermore, they are targeting Amazon listings that are sold and shipped by Amazon , and Amazon doesn’t care, yet.
We have our own Seller account on Amazon and noticed increased credit card chargebacks and refund requests. It was only when we noticed an eBay seller from Sri Lanka selling two of our products that we investigated further. Through a series of steps, including placing an order with said eBay seller, we discovered what they were doing. The order we placed on eBay came through to our Amazon Seller account for us to fulfil!
There is an underlying question on how they are paying for orders on Amazon with someone else’s billing and delivery address. The chargeback requests suggest they are using stolen credit card information with poor security checks or using them to purchase Amazon gift cards, which they then use to place the order. Or, other “dirty” money is being used to buy the gift cards to buy the orders via Amazon. The eBay sale then legitimizes the money through an eBay seller account. The successful Amazon refunds are then just a bonus.
Drop shipping is not new. The conventional model is to place a listing on eBay for much more than it is sold elsewhere in the hope that someone will order. The seller then orders from another channel, like Amazon, or has it shipped out to their customer legitimately from a distributor. They might make a small margin.
This new model is based on fraud and is very dangerous for the following reasons: As customers start to leave good feedback, and you combine this with it being cheaper than anywhere else, the listing has the potential to go viral. I can tell you from experience. Neither eBay nor Amazon appear to be clamping down on this yet.
eBay still takes a cut of every sale, and Amazon (their main competitor) or the FBM Amazon Seller loses out, not eBay. Amazon makes too much money anyway. If it’s a product they are selling themselves, likely thousands every day, they will happily write off 20 refunds per day. If it is a seller like me with my own Amazon Seller Account, it doesn’t affect them at all – I lose out. Either way, there is little incentive to combat this. This is where you come in.
If you order from an eBay account based out of Sri Lanka set as “Private,” you may be dealing with a seller defrauding Amazon or Amazon Sellers to fulfil your order. It is impossible to profit from fulfilling orders at higher prices than you are selling for unless A: you are committing fraud; or B: laundering money. The product will be cheaper, but note that the eBay seller will likely set up a fake Amazon seller account with your personal details. I am not an expert in data protection, but I am sure this contravenes GDPR. Also, Amazon may flag you or your address for potential credit card fraud, particularly if you already have an Amazon account.
There are tell-tale signs on the Amazon accounts that help spot these orders, and legitimate Amazon sellers will start refusing to ship them. I am also unsure if the fraudsters are operating out of other countries.
If you are a buyer, please be aware. If you are a seller, I hope this helps, especially if you have noticed an increase in Amazon refunds.
