Season 1, Episode 65

Is it “Black Hat” or is it Fraud?

Amazon is suing thousands of Facebook admins for facilitating reviews abuse, an issue that has been ongoing for years. In this episode Chris and Leah discuss the ramifications of these black hat tactics not just within Amazon, but with the law.

Show Notes


[00:00:07] Chris: Hey everybody, welcome back to Seller Performance Solutions. This is Chris McCabe of e-commerceChris, I’m here once again with Leah McHugh. How are you doing?

[00:00:16] Leah: Good. How are you, Chris?

[00:00:17] Chris: Great. Kind of a twisted tangled subject we’re talking about today for a change. The reviews abuse saga has entered a new phase. Recent events are that Amazon suing more and more of these groups, whether they’re on Facebook or they’ve got their own URLs and their own services. There are more black hats being hunted down, and sued by Amazon. these were things that people like me have mentioned for years in terms of why aren’t these groups regulated, policed, maybe Amazon and Facebook could tandem go hand in hand and try to pick up some of the legal enforcement here, but the alarming recent trend appears to be trying to frame or set up or sabotage your competitor by making it look like they have been actively bribing buyers for positive reviews, right?

[00:01:06] Leah: 
Yeah. Which in and of itself, isn’t totally new. I mean, we’ve certainly seen people get fake positive reviews out of nowhere, which is a competitor, trying to get them flagged for fake reviews.

[00:01:16] Chris: Right.

[00:01:17] Leah: 
I think the difference here is that they’re using off Amazon tactics to further implicate competitors which maybe you can explain the specific case that you’re talking about. So people know what the hell we’re talking about here.

[00:01:30] Chris: Yeah I mean, well, we had different, I guess I’m chopping this into phases. Phase one seemed to be taking your product or your brand and putting it on one of these rebate sites. This was a few months ago, maybe it was earlier in 2022. We don’t have to name the sites in particular. One of them I think no longer exist because Amazon’s suing them, but the idea was, leave us a review and then you’ll get the cost of the purchase fully refunded afterwards. The after order after review a hundred percent refund or rebate. So the rebate sites flourish for years, we’ve been talking about it since I think 2018. And it took until like earlier this year, late last year for Amazon to go after those.

[00:02:11] Leah: Well, and then there were the people that thought you could loophole that by offering a gift card instead of a rebate, even though it’s basically the same thing, according to the FTC.

[00:02:20] Chris: Right. A lot of services, sellers, content we saw on YouTube and elsewhere groups indicated as long as you don’t ask for a five star review, you can do all these tricks to get reviews. It was wrong. It was faulty advice, a lot of sellers followed it. A lot of them got suspended. Of course, that’s how we first came onto this problem. The other tactic was creating a fake Facebook group or creating a fake URL fake brand site for your brand, your competitor does this. They make it look like you’ve got splashy content offering free stuff or payouts or whatever, giveaways in exchange for five star reviews, it’s a complete scam.

None of it’s real, but they put those links into an abuse report to Amazon. I think this started to thrive once Amazon abuse teams finally sort of showed that they were doing something right. Once enforcement picked up at Amazon. I mean, Amazon for, I think five years has been saying, they’ve been keeping an eye on this, but there was no real enforcement until more recently.

So once fraudsters and abusive competitors realized they could frame you for this, they started pumping emails into Amazon enforcement teams, abuse prevention teams saying, look what this guy is doing. This harms buyers. This is fraud. We’re taking this to the FTC, since they police and enforce fraud on online marketplaces, why aren’t you doing more to prevent this?

And of course, Amazon gullibly failed to investigate it and took down these sellers. We had clients who were impacted by this, right?

[00:03:56] Leah: Yeah. And I think we’re probably gonna see a lot more of that sort of thing. Now that Amazon is suing those certain Facebook groups, because yeah, I’m gonna say it’s a pretty good bet that there are people in there that are getting fake reviews for their competitors in those groups.

So if Amazon has access to any of the information in those groups, they’re going to see what looks like. Your brand trying to get fake reviews. When in actuality, it’s your competitor trying to frame you for reviews abuse.

[00:04:26] Chris: 
Right. And, and this is fixable. We’ve gotten people reinstated who have been falsely accused. It’s not that it’s not fixable. Another recent trend is that some sellers that are complete black hat, fraudster type brands who were paying for five star reviews are now using this trend of framing your competitor. Now they are claiming they are victims. And some of them have actually gotten reinstated in recent days that I’ve heard and seen which means that the trend is swinging the other way, where Amazon’s reinstating brands. Who say that they were framed or falsely accused and some of the black hats are jumping on that piggy wagon. Piggybacking on that, jumping on that bandwagon or piggy wagon, as I like to say apparently.

And saying, Hey, we’ve been set up now. And some of those sellers are ones that were actually attacking others with like fake negative reviews while they were patting their positive reviews.

What that tells me and you can tell me if you agree or not, or how you see this. Long story short, what it tells me is that Amazon can’t separate the legit valid reviews and the legitimately operating sellers from the ones that are just trying to game the system. It seems like they don’t know which bucket to put these people in.

[00:05:36] Leah: 
No, and I think that’s been the case for a while now, but I also, in fairness to Amazon, which is not something I normally say, this is so very messy at this point. You know, people framing people with fake websites and it’s just so convoluted now that I can see how it is very difficult for investigators who have a limited amount of time to investigate this stuff.

I can see how it’s very hard for them to be able to separate this out. And I understand that they are a very large data company, but they don’t have access to the entire internets data. So these are off Amazon tactics that they have some insight into, but rather limited insight into as opposed to stuff that’s being done on their own platform, which they should be able to investigate easily.

[00:06:28] Chris: I think they are able to, they just weren’t motivated to until the press was screaming about this and until the FTC came knocking on their door so often. And, and my concern is that a federal agency like the FTC, I mean, we’ve seen sellers pretty much willing to do anything to just out of greed or their sort of addiction to black hat behavior.

I’m concerned that they’re investigators or attorneys at the FTC that might fall for some of these reports, like it’ll be reported to them. And then they’ll send a list of brands or sellers to Amazon saying, Hey, what are these guys doing? Simply because they don’t understand how Amazon works that well.

[00:07:05] Leah: And that’s something that we’ve talked about before, maybe not on the podcast, but that’s something that we talked about before just you and I, I think we are at the point now where some of these are major crimes and Amazon is not equipped to handle these, the FTC isn’t equipped to handle these.

Like what is needed here are properly trained and funded FBI or police law or whatever.

[00:07:31] Chris: Law enforcement.

[00:07:31] Leah: Yeah. Some sort of law enforcement that understands how this all works and are able to actually enforce laws in an area that does take a certain amount of knowledge, the FBI has art fraud experts.

[00:07:45] Chris: Right.

[00:07:46] Leah: But there is no eCommerce expertise within law enforcement. And I think we’re at this point now, I mean, certainly monetarily we’re definitely at the point where that’s needed.

[00:07:56] Chris: Well, cyber crimes. There are cyber crime units.

[00:07:59] Leah: Right but this is a very specific part of cyber crimes. This is not the same as you know, a human trafficking ring online. It’s not the same thing.

[00:08:06] Chris:
 No, no. I mean, in my experience, dealing with federal agencies on occasion, how subcommittees that were doing the antitrust investigations and inside Amazon teams and other groups that kind of know and understand the technical side as well as the fraud prevention side.

I’ve noticed that there has to be a new branch. I don’t know if it’s a new cabinet role necessarily, but a new eCommerce fraud prevention or online marketplace regulation, regulatory arms, somewhere inside a federal agency or a government body that will understand how all these different pieces work, because Amazon’s only going to police their corner of this.

It’s not Amazon’s responsibility to track down and locate, identify, arrest, prosecute fraudsters all over the internet. And we understand that.

[00:08:57] Leah: Well, and I think within the eCommerce community as well, these aren’t thought of as crimes, these are just thought of as black hat tactics, when in actuality, These are crimes and, you know we get emails–

[00:09:10] Chris: Well it’s fraud.

[00:09:12] Leah:
 Right, which is a crime. And most of these involve interstate commerce. And so then you’re looking at potential wire fraud, which is a federal crime. It’s not looked at as a crime because these aren’t being regulated as crimes and until there’s actually some sort of enforcement of these laws, I think it’s just going to continue be, to be treated as oh, Amazon might get angry.

[00:09:33] Chris: 
But I honestly don’t think most sellers fail to understand the word fraud. I think fraud is a straightforward term, which is like, there’s something illegal happening, and it’s really only fraud investigators like I used to be at Amazon, who would use the terms like soft fraud versus hard fraud. Maybe some of the sellers that you and I have interacted with or heard about over the years. Are kind of mimicking soft fraud when they’re like, well, I just paid a service I didn’t do this myself. So I’m not guilty of anything. Maybe that’s what they mean. They think it’s soft fraud and not hard fraud, but fraud is fraud.

[00:10:06] Leah: 
But we also regularly have people who just tell us things that they have done. And you’re like, oh, you know, like a crime and it’s just treated as, oh, well, this is what you have to do to stay competitive, right? Not, this is a very slippery slope.

[00:10:21] Chris: Right, right. But fraud it’s fraud. And obviously it’s taken Amazon forever and a day to catch up to this stuff, but the lawsuits do mean that they’re going to be suing services out of existence that are breaking the law. Part of that process, I believe based on the conversations I’ve had with lawyers, I am not an attorney, is that some of those people who are some of those owners of those companies, That are at least based in the United States that can’t just be ghosts and Phantoms and disappear. In order to settle these cases, in order to resolve whatever they’re being investigated for by federal agencies have to hand over a list of practices and a list of clients.

[00:11:03] Leah: Well and I mean, Amazon does the same thing, right? When you, when you get the review manipulation Email, they wanna know who you’ve worked with, what services you used and dates and times and contracts with all of those people. They’re using you to get information for the bigger picture.

[00:11:21] Chris: Right. We’ve even seen on occasion when they’re suing a company, they specifically mentioned the company, if it’s somebody who’s been arrested or is going on trial for fraud or for bribery, we’ve seen them drop those names into an email, which is pretty striking that they’d say, do you work with this person? Not even a company at that point, they’re drilling down into the person. Well, why are they doing that? Well, because they’re looking at prosecuting that man, or that woman.

[00:11:49] Leah: Well or suing.

[00:11:50] Chris: Right. So, at this point we expect sellers understand most of this. I mean, I guess we do hear occasionally from amateurs that are brand new to Amazon that are like, well, we heard this was okay. And we know that that’s just their ignorance of being new. But at this point, if you’re still doing these things, if you don’t care, if you’re gonna show up on a client list for some of these companies that are sued or people that end up prosecuted, you know what you’re getting into, you know, you’re doing short term, not long term sales.

You’re trying to get a couple of disbursements out of Amazon before you get taken down but everyone knows what’s going on at this point. It’s not 2018, 2019, where there was this murkiness and I attended a seminar. I heard a webinar. And it seemed legit– we’re way past that point.

[00:12:37] Leah: They said this was tos compliant.

[00:12:39] Chris: Yeah. Their website says it’s tos compliant with Amazon. Of course they did. They’re trying to reach in your wallet and lift some cash out.

[00:12:44] Leah: Anyone can put that on their website. It’s not a regulated claim.

[00:12:48] Chris: 
Well, this is where Amazon and e-commerce gets Darwinian or Darwinistic, which is if you’re not able to compete with others because you’re gullible and you fall for these things, survive of the fittest, right? You will be the one that’s that’s shelved when it comes time to suspend accounts. Amazon wears as a badge of honor. When they get ugly stories in the news or government agencies are investigating them or the FTC, you know, publicly makes a statement about all the fake reviews on Amazon. Amazon wears as a badge of honor, how many sellers they suspend. The knee jerk reaction PR pumps out is we suspended 6,700 sellers last week.

So you are willingly putting your head on the chopping block when you do this stuff. And there’s no way to talk to Leah or me or Amazon or anyone and claim ignorance or profess your innocence based on, Hey, we’re new and we didn’t know that at this point, don’t even bother saying that.

[00:13:47] Leah: 
Yeah. I mean, we’ve talked about that before being new isn’t an excuse anyway, but I mean, this has been going on. Yeah. When did they sue Fivver? That was like five years ago this has been a long time coming.

[00:13:58] Chris: It’s been Fivver.. It’s been Upwork. I just remember all the rebate stuff we had messages two years ago, maybe 2019, 2020. I think it was from some of these rebate companies or services. That were grouchy that we were saying rebates, rebate processes like that were bogus and were fraudulent.

[00:14:17] Leah: To be fair, we annoy a lot of services.

[00:14:21] Chris: Yeah, but I remember the rebates in particular. I mean, there were sellers, there were services, there were individual people we heard from who said how is this not TOS compliant? I wanna debate this. I wanna argue, well, let’s go fast forward to 2022.

[00:14:33] Leah: Well, even recently people were freaking out about the clarification over this, and it’s like this has been pretty clear for a while. Yeah. You may have convinced yourself otherwise, but Amazon changing slightly the wording and the policy doesn’t mean that it was okay before.

[00:14:47] Chris: Right? Well, they wanna litigate phrases and it’s like, well, you kind of don’t need to debate or argue for a 45 minute YouTube video or podcast about this or that turn of a phrase, all you have to do is look at all the suspended accounts over and over and over.

[00:15:03] Leah: Right. And again, we’re not just talking Amazon policy here, we’re talking FTC regulation, which is pretty clear about incentivizing reviews.

[00:15:10] Chris: Yeah, I’m just concerned that people are going to start going to the FTC who don’t understand how serious it is to lie to a federal agency and try to throw a competitor under the bus by lying to lawyers at the FTC.

[00:15:23] Leah: Yeah. I mean, I’m sure it’s already happening. I do not envy the people at the FTC who have to sort through all of this. But yeah, I’m sure it’s already happening, unfortunately.

[00:15:33] Chris: 
Yeah, we know this is shocking and scary stuff, but as long as you’re on the right side of thelaw, and you’re playing it the white hat clean way you should be okay. If you look like you’ve been framed or sabotaged by a competitor, show it to us.

This can be fixed. This can be resolved. I know this is crazy stuff, but we’re always saying you gotta protect your brand. You always gotta be thick skinned and ready for something ugly to happen.

[00:15:56] Leah: 
Welcome to the craziness that is Chris and my day to day.

[00:15:59] Chris: That’s right. Our daily life. Thank you again for listening. Thank you, Leah.

[00:16:02] Leah: 
Thanks Chris, bye.

Hosts & Guests

Chris McCabe

Leah McHugh



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