Workers fulfill orders at an Amazon fulfillment center on Prime Day in Melville, New York, US, on Tuesday, July 11, 2023.
Johnny Milano | Bloomberg | Getty Images
For the millions of sellers who make up the booming Amazon marketplace, few things are as perpetually concerning as the threat of getting suspended for alleged wrongdoing and watching business evaporate overnight.
Helping third-party sellers recover their accounts has turned into a large and lucrative enterprise, because the only way the merchants can get back up and running is to admit guilt and correct the issue or show sufficient evidence that they did nothing wrong. The process is often costly, lengthy and fraught with challenges.
Enter the illicit broker.
For a fee of $200 to $400, sellers can pay for services such as “Amazon Magic,” as one broker on encrypted messaging service Telegram calls it. The offerings also include access to company insiders who can remove negative reviews on a product and provide information on competitors. Users are told to send a private message to learn the price of certain services.
The Telegram group has over 13,000 members, and it’s far from the only one. Other brokers peddle similar services on Telegram as well as on WeChat, WhatsApp and Facebook Groups. The confidential data is promoted as intelligence gold for any seller working to get their product or account reinstated.
The groups are part of a robust market of so-called black hat service providers that have cropped up alongside the rise of third-party marketplaces on Amazon, Etsy and Walmart. Amazon’s marketplace now accounts for over 60% of goods sold on the platform, and includes numerous businesses that generate millions of dollars in annual revenue on the site.
As it’s grown, the sprawling global marketplace has also seen a surge in the number of counterfeiters and spammers trying to game the system, which has pushed Amazon to ramp up enforcement. Much of the activity originates off Amazon’s marketplace and on social media and encrypted messaging apps, complicating the policing efforts.
A public Facebook page identified by CNBC offers an internal screenshot service with “valuable insight into your seller account, allowing you to see how Amazon employees view your account and its performance.”
Facebook parent Meta didn’t respond to a request for comment.
The issue of rogue employees taking bribes is not a new one for Amazon. The company has in the past dealt with low-level, low-wage seller support staffers in China, India and Costa Rica who have accepted payments in exchange for leaking information.
Brokers, who act as middlemen between sellers and employees, often reach out to insiders on LinkedIn, said a person familiar with the matter who asked not to be named due to confidentiality. Amazon has an internal group tasked with threat analysis and response, including a team dedicated to investigating employees suspected of leaking data, the source said. The threat analysis unit monitors social media platforms for abusive groups where bad actors may congregate before engaging in illicit activity on Amazon’s marketplace.
Amazon told CNBC that it has systems in place to detect suspicious behavior such as improper access to confidential data and investigates these activities, sharing information with law enforcement agencies. It reports abusive groups to social media platforms and encrypted messaging services, where bad actors are increasingly concentrating their activities in order to avoid detection, the company said.
“There is no place for fraud at Amazon and we will continue to pursue all measures to protect our store and hold bad actors accountable,” Christy Distefano, an Amazon spokesperson, said in an email.
Amazon declined to say whether it has disciplined or fired employees for leaking data in exchange for payments, beyond noting that it has zero tolerance for staffers who violate its policies.
Amazon’s ongoing bribery problem
In 2018, Amazon investigated claims that employees, primarily based in China, received payments of $80 to more than $2,000 to share confidential sales information or delete bad reviews, The Wall Street Journal reported. More recently, the Department of Justice charged six individuals in 2020 with participating in a scheme to bribe employees and contractors for internal data.
In July, the fifth defendant in the case, who is a well-known seller consultant, was sentenced to probation and house arrest after pleading guilty in March. Account annotations, internal notes from an Amazon staffer on a seller’s account, were among the confidential data being exchanged between the defendants and employees.
Amazon said it uncovered the suspicious behavior related to the bribery case in 2018 and reported it to the FBI. The company said it had “robust systems” in place to detect suspicious behavior such as fraud and abuse. Amazon has also urged social media companies to assist it with rooting out fraudulent activity such as fake reviews.
While Amazon is aware of the problem and is investing in people and technology to weed it out, groups continue to proliferate into the hundreds, the person with knowledge of the issue told CNBC. Accessing groups on encrypted chat apps such as Telegram, WeChat or WhatsApp may require a link or invitation.
Remi Vaughn, a spokesperson for Telegram, told CNBC in an email that “moderators proactively monitor public parts of the platform and accept user reports in order to remove content that breaches our terms of service.”
The Amazon Magic group on Telegram is public, with users advertising black hat services almost daily. Screenshots of Amazon’s internal Paragon system, which is used by seller support employees to handle cases, are distributed freely in the group. CNBC authenticated the legitimacy of the screenshots with sources knowledgeable of the system.
“Much more you can find about your account by ordering screenshots with inside information from us, as seller support sees it,” a message in the Telegram chat states.
Many of the messages in the group are in Russian, and a user who runs the group claims on Facebook to be based in Ukraine. The person didn’t respond to a request for comment.
Group administrators list a full menu of services available in an online spreadsheet. Annotations, which often include more detailed information than the suspension notifications, are priced at $180 apiece, and attacks on a competitor’s listing vary in pricing. Securing an upvote on a review, a tactic used to manipulate trustworthiness or popularity of a product, costs 50 cents. The brokers guarantee buyers they can deliver the goods within one to two business days.
Amazon sellers have for years complained of being unfairly kicked off the site without explanation. The process of getting their account back can take months, costing critical sales in the meantime. The issue was a key focus of a 16-month investigation by the House Antitrust Subcommittee into competitive practices at Amazon and other Big Tech companies.
“When Amazon turns off the faucet, everything goes to hell,” said Cynthia Stine, president of eGrowth Partners, a consultancy that helps merchants get reinstated. “I’ve had CEOs of large companies cry on the phone with me, and they’ve had to lay off their people. They’ve declared bankruptcy.”
Account annotations are like an “insurance policy” for sellers who’ve been suspended, Stine said. She said she comes across potential clients who have purchased annotations and are seeking to regain selling privileges roughly once or twice a month. As black hat brokers and consultants have multiplied over the years, it’s eaten into her business, Stine said.
“For a time, people wouldn’t even come to us, they would just go work with whoever they bought the data from,” she added.
Amazon has previously said it has processes in place to help sellers avoid deactivation and get reinstated when appropriate. The company disputed claims that the chaotic and costly suspension process justifies illicit tactics such as buying confidential data.
“There is no place for fraud at Amazon and no excuse for resorting to illegal activities,” an Amazon spokesperson told CNBC last month.
