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This basically happens for a good reason. Basically, the potential scam is to sign up to a marketplace and list very popular products at lower prices than every

• ethanwillis 7y ago
  Surely the scam doesn't last since 2013. Stop making excuses for Amazon, this isn't acceptable given the circumstances. There's no scam going on here and bringing it up is just a way to take blame away from Amazon and for what end?
  • 55555 7y ago
    I have had XXX,XXX funds locked and a business wrecked in this exact same way but I'm explaining why it happens. If they didn't do this, they would be exploited. The real issue here is that, because they're a monopoly, the customer service sucks, and they don't care at all to let you prove you aren't running a scam. To the sibling commenter: No, what Amazon is doing is not a legal requirement. Yes, they act like PayPal now.
    • ehnto 7y ago
      > If they didn't do this, they would be exploited Amazon are offloading their fraud risk onto random small businesses and the nuance of their platform gives the small business no recourse. In a fair platform, you could resolve something like this pretty easily. I'm sure you agree, but it's worth noting explicitly. It's not a stretch to imagine Amazon are allowing for this "bug" in their support system to remain because it saves them money.
      • ethanwillis 7y ago
        Yea that's really the question I have in the other reply I just left. Does it save them money? Maybe in the short term. Maybe even in the long term if the PR cost doesn't hit them at all. I think as people this is a reason where we need to hold them accountable by pushing our businesses back to platforms where we have more control, and pushing our selling habits back to those same platforms. I don't think Shopify is ideal, but I do think it's better for both sellers and buyers than Amazon.
      • nebulous1 7y ago
        > In a fair platform, you could resolve something like this pretty easily How? It seems that Amazon could provide better communication, but how would this situation be easily resolved?
        • user5994461 7y ago
          Release a small fraction of the fund, let's say 30%, maybe limited to transactions deemed older/safer. It's trivial and it's enough cash flow for the vendor to continue operating until the next release. Amazon has two days delivery for most orders. They can quickly get customer feedback (product review, refund, shipping issue). They could even directly question customers "have you received product? Yes/No". They could easily determine that a vendor is legit if they wanted to, they do not need to hold funds for months.
          • mcbits 7y ago
            What PayPal does or did (according to stories I read a while back) was freeze the funds and then simultaneously advertise a loan to the customer. So I guess we could subtract the interest rate charged by other lenders for that kind of loan from the rate that PayPal would charge, to get an estimate of the risk that PayPal believes it is mitigating when freezing people's funds.
            • user5994461 7y ago
              Sounds odd for PayPal to do that (might be a US thing?). They're the one owing you money but you're the one who has to pay extra fee? The purpose of delaying was to prevent fraud and this achieves nothing to prevent fraud, the vendor can just take the loan and run away. If PayPal is confident enough to give a loan, they're confident enough to release some of the funds, but they prefer to force a loan on the account holder and get extra fees? I don't expect that going well in many jurisdictions. Consider the massive power imbalance and usually shorter legal timelines to close SME payments, that give more weight to the case.
    • ethanwillis 7y ago
      That's fair. What makes it so insane is they still get exploited on both the buyer and seller fronts. Really though the crux of the problem if they want to do this type of enforcement is they just need a better internal policy of expedited processing of reviews for accounts > some age && > amount of held funds. If they ramped up this current type of "enforcement" to deter fraud it's going to come with a PR cost.
    • rhizome 7y ago
      >If they didn't do this, they would be exploited. You're implying that the way they're currently doing it is the only possible way to deal with the problem.
      • stingraycharles 7y ago
        Exactly, the problem isn’t that they are protecting themselves against fraud, it’s the way they do it. There is so much low hanging fruit they could implement to do better than this, it’s inexcusable.
    • _red 7y ago
      >because they're a monopoly They're not a monopoly.
      • vermontdevil 7y ago
        They will after the COVID crisis eases.
      • 55555 7y ago
        Yeah, they're not a monopoly. And my business isn't a monopoly either. But, notably, not in quite the same way that they're not a monopoly.
      • bragh 7y ago
        Sure, they are not a monopoly yet when you look at the whole of e-commerce. But Amazon effectively is a monopoly for at least books and probably electronics, depending on where you live. Quoting from an article published in 2018: https://www.retaildive.com/news/amazon-beats-best-buy-as-top-electronics-retailer/521505/ https://www.retaildive.com/news/amazon-beats-best-buy-as-top... > 60% of every incremental dollar being spent online in North America is gong to one company — Amazon. No matter what you sell, Amazon is coming for you
      • ncmncm 7y ago
        They exercise monopoly power, by the law that makes them a monopoly. Getting the JD to enforce monopoly laws is a whole other problem
      • cambalache 7y ago
        In the same sense a giant Walmart in a 5000 people town is not a monopoly
    • stevespang 7y ago
      And PayPal got a nice fat class action suit against them for just this same crap . . .
    • didntknowyou 7y ago
      mind you shopify is acting the same way too. i get that they have to protect themselves, but when they hold all the money and power they have little incentive to resolve things quickly.
  • LatteLazy 7y ago
    I'd have though Amazon legal or their rep would have at least got something happening. But just Fyi, often fraudsters will buy or otherwise gain control of companies with long histories to commit fraud. They do this exactly because you'd assume a company in business since 2013 is legit. You see the same thing with old ebay accounts, people buy/hack them, suddenly start selling again and when it turns out all they mail is bricks in boxes it's too late, they took the money already. For tax evasion (and I'm sure also legit purposes) you can buy companies that have been setup, registered and had returns filled for years, and now look like real entities. They're called "Shelf" companies. Edit: I think they even do it the Sopranos. A guy has big gambling debts, they put a gun to his head and his company maxes out its credit with the bank and all its surpliers such that it will never be able to repay. The money goes to Tony and the bank/suppliers are left wondering why an established businessman ruined his own business and probably their's too. Criminals are clever and that makes everyone's lives more difficult...
  • paypalcust83 7y ago
    The two can happen simultaneously. Assuming a particular case is either one or the other either with algorithms without human review is arrogant, unprofessional, fascist, and lacks nuance. Making it convoluted and difficult to receive money owed is fraud, theft, and deception by design.
  • moltar 7y ago
    Scams do happen on established accounts too. Accounts get stolen. Accounts get sold on private forums and Facebook groups. Established sellers do go rogue sometimes too.
  • hlmencken 7y ago
    It's a huge shift in behavior. Outside of Covid-19 context something like this could have been a huge red flag. I'm sure people at amazon are working near as hard as anyone to respond to all of these changes. This was flagged and resolved by them in a day. I'm sure there are a lot of latent checks and balances that are there to catch things but when context changes need to be updated. In emergency times often the squeaky wheel gets the grease and I have no doubt Amazon is relying on customer feedback to point out less common problems that have arisen due to all the change.
• unethical_ban 7y ago
  As you said, they are paying $5,000 a month ($60,000/yr, they alone are paying 30-50% the salary) for an account rep whose sole job is to facilitate communication between customer and Amazon, and they are proving useless. If this is some sort of "suspected fraud, don't tip them off" then it is a really shitty way to handle it - and probably not legally required. Amazon is choosing to handle it this way. Sounds like Paypal - never keep your money in it a day longer than necessary. I don't know how Amazon Marketplace funds work, but this is a lesson never to trust Amazon with your money if you can avoid it.
  • thw0rted 6y ago
    This is probably the thing that bothers me the most about this story. Every couple of weeks there's another post about "Google de-listed my app from the Play Store", etc, and the common thread tends to be that there's a wall of powerless drones that act as the interface between the tech giant and the "tenant" (developer or seller). Contact support with a complaint, they say that you violated some nebulous policy and they can't give you the details of the violation, and all the tenant can do is shout into the void or hope to make enough noise rising up the ranks here at HN that somebody with actual power takes notice. So, it's chilling to see that Amazon has a system where you can pay a frankly astonishing amount for a "priority" rep, who you would think would have the power to actually get any issues addressed, and actually they're just as useless as the Tier 1 guy who read you the script about violating the terms of service.
• luckylion 7y ago
  How are they reacting that way for an established seller, yet they are apparently incapable of getting rid of the "don't buy via amazon, contact me at my email address first, I will reject all orders via amazon" scammers that put fake offers at half market price in? That sounds more like an intern clicking on a few things. If their scam-hunting-systems (which I'd reason are an important part) are fully automatic and that bad, it's a miracle how AWS works.
  • user5994461 7y ago
    It seems an established account is as likely as any account to sell a ton of ghost items and cash away the money. Consider if the vendor account gets hacked or the wife of the vendor pulls a stunt on him. The reward for fraud only gets bigger as the account is more trusted.
    • luckylion 7y ago
      By that logic they should always freeze all accounts, because "they've not scammed up until now, which makes them more likely to scam in the next five minutes then ever before". It looks more like a simplistic trigger that somebody just threw in there that doesn't take e.g. Amazon's ability to fulfill FBA orders. And it looks like a terrible policy to just say "yeah, fuck the seller, shut them down, we don't do manual reviews of the decisions of some Perl script from a decade ago".
      • user5994461 7y ago
        I'm saddened that you don't consider these serious issues in the real world. I personally know a man who used to run a small company (not related to Amazon) and whose wife drained all the money away over a small period of time, as well as taking a few extra lines of credits, before vanishing. Thankfully scams are limited in time. Freezing funds for 30 or 60 days is an effective fraud prevention tactic. P.S. Of course in this case it's stupid and there should be a way to contact a human and release some of the funds.
        • 7y ago
• ehnto 7y ago
  > This is the dark side of monopolies. Tech monopolies are particularly good at it, online support tickets and "community" forums are fantastic decoys for real support.
  • seph-reed 7y ago
    > This is the dark side of monopolies. Oh; no introduction necessary. We go way back.
  • Aaronstotle 7y ago
    Google is one of the worst offenders, had a user tell me that Chrome deleted all of her passwords. Try to look up solutions online and all I find are tons of community forums with 60-80 posts each of people talking about how all of their passwords are gone and there is no solution/remedy offered to anyone.
    • deleted 7y ago
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    • ectospheno 7y ago
      Stop using chrome?
      • ehnto 7y ago
        It doesn't fix the problem, it just makes it no longer your own problem. Chrome is still one of the dominant browsers.
    • anticsapp 7y ago
      I had a weird positive experience with Google lately. An account rep messed up all my AdWords (I still call it that) campaigns and blew $900 on worthless mistargeted clicks on Christmas Eve 2018. My request for refund was denied, so I chargebacked and got banned (who cares). I need to use AdWords again next month so I reactivated the account and asked for another appeal. They immediately deleted the $900 debt and unbanned me.
• fizixer 7y ago
  I get that Amazon has created this "self-correcting machine" that makes sure certain constraints are met in terms of vendors and products and what not. And if a vendor is detected as violating some rule, they're "eliminated" and Amazon prefers not to have human intervention. But does Amazon share the full details of this "machine" with the partners/vendors beforehand who are going to be subjected to it? If I'm a vendor I'd like to know the exact rules of the game, down to the last if-then-else, no matter how complex, so I can at least have all the information to decipher what may have gone wrong, or how not to overstep. Sharing this information would only make it easier for both Amazon and the vendors.
  • 013a 7y ago
    And the fraudulent sellers would also love to have this information, so they can precisely step around every piece of logic Amazon's systems are enforcing.
    • fizixer 7y ago
      What I'm asking is not unlike how society works. The law of the land is publicly available and it's a right of every citizen to know the rules that they're expected to abide by. If someone reads all of the law and finds and exploits loopholes, did they really commit fraud? or is there something wrong with the law that needs to be fixed?
• _bxg1 7y ago
  > This is the dark side of monopolies. Is there a bright side?
  • burger_moon 7y ago
    People get same day delivery diapers. Apparently it's worth it.
    • fdajsklfj 7y ago
      Same day delivery of diapers that they probably won't even notice are sketchy counterfeits.
      • jessaustin 7y ago
        Does authenticity matter for a disposable excrement catcher? If they sold you diapers lined with broken glass, fraud would be the least of their crimes.
        • youdonthavekids 7y ago
          Yes, the ability to hold enough pee without it leaking is something certain high quality nappies do far better than others. The ability to pull the moisture away from the skin as to reduce the chance of rash is done better by certain brands and I would hope the 'non-fakes' adhere to some sort of standard where the material doesn't affect the health of the skin as it's medically approved etc. If your comment is correct, we could just wrap old tshirts around my babies arse.
          • mtrower 7y ago
            Well, you certainly could. Cloth diapers were once the standard (and are in fact still used by some).
            • jessaustin 7y ago
• loeg 7y ago
  The vendor in question had been a steady seller with a 7 year track record. It's really hard claim to swallow that that is plausibly an exit scam, even to an extremely naive fraud-detection system.
  • toasterlovin 7y ago
    Seller accounts are bought and sold on the grey/black market.
    • loeg 7y ago
      I don't think that math adds up. Seller does $12 M/yr revenue with Amazon. How much is an exit fraud worth? I find it difficult to believe that anyone on the black market is willing to pay anything close to the discounted future earnings of a $12 M/yr revenue business just to pursue an exit scam for about a week.
      • slv77 7y ago
        There is also credit risk for an established business that maybe heading to bankruptcy. Amazon is essentially extending credit by paying sellers for items that may not have shipped. Given recent disruptions they are likely on high alert for credit risk as well.
        • loeg 7y ago
          I don't think they need to hold ~4 months of average sales to cover that risk when ship times are a handful of days. AMZN seems to have been holding funds on sales that were not only already shipped, but delivered.
      • toasterlovin 7y ago
        5% margins, which are in the realm of normal, on $12MM/year would be $600k. If you didn’t ship $3MM worth of product, that would be five years of profit. But also: shit happens to people. They get into debt. Businesses go bad. There’s a reason Amazon has a system in place to flag and shutdown this pattern of activity. Maybe it was wrong in this case, but it exists for a reason. Chesterton’s Fence and all that.
• deleted 7y ago
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