Return scams jump as fraudsters exploit e-commerce boom

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Net Patrol International Inc.  Data Investigation and Forensic Services
Bankruptcy and Insolvency Trustees

July 15, 2021 – Retailers say they are seeing a sharp increase in a type of return fraud in which consumers claim they never received their online orders even though they did.

The practice, known as “item not received” fraud, took off during the pandemic, when warehouses were backed up and carriers were overwhelmed by a surge in e-commerce orders. In some cases, consumers are hiring professional fraudsters, who market their services on social media and advertise refunds of as much as $20,000 at chains such as Amazon. com Inc., Walmart Inc. and Target Corp.

“This type of fraud really skyrocketed with Covid-19,” said Dajana Gajic-Fisic, who heads e-commerce risk operations for Finish Line Inc. and the U.S. arm of JD Sports, sellers of athletic shoes and apparel. Both companies are owned by JD Sports PLC. “There were a lot of people with a lot of time on their hands, and they researched how to do this,” Ms. Gajic-Fisic said.

Here is how it works: A consumer places an online order with a retailer. After the package arrives, the consumer—or the professional refunder the consumer has hired—calls the retailer’s customer-service department and says they didn’t receive the package.

Professional fraudsters research the return policies of individual retailers and know the loopholes, said Karisse Hendrick, founder of fraud-prevention company Chargelytics Consulting. “They game the system through trial and error,” she said. “Sometimes they’ll use an insider who has worked in customer service for a particular retailer.” Wall Street Journal reports. | READ MORE