Amazon is suing a group on Telegram it says orchestrated $1.2 million in fraudulent refunds while taking a cut

• Amazon says a criminal group is responsible for more than 10,000 items stolen through fraudulent refunds.
• A lawsuit also names seven US defendants who are said to have used and promoted the illegal service.

Retailers have invested billions of dollars perfecting the process of receiving payment for products and delivering those products halfway around the world with remarkable speed and accuracy.

But when it comes to running that well-oiled machine in reverse, there are sometimes quite a few gaps that bad actors can exploit.

Amazon filed a federal lawsuit last week accusing a group operating on Telegram of being responsible for more than 10,000 items stolen through fraudulent returns.

The issue, as outlined in the lawsuit filed in the Western District of Washington, is that Amazon — like several major retailers — occasionally refunds payment on products that aren't ultimately sent back to the company.

These no-return refunds can happen for a variety of reasons, and Amazon says a group calling itself Chin Chopa has become a specialist at exploiting several of them.

Under the scheme, as alleged in the complaint, Amazon customers would share their login credentials with a person from Chin Chopa who would initiate a refund process on their behalf.

The Chin Chopa operators would then fabricate a story for Amazon customer service representatives — in some cases using falsified police reports — to get the company to return money to the customer's account, the complaint said.

Customers would then pay Chin Chopa a fee in cryptocurrency of roughly 20% to 30% of the product's actual price, the complaint says.

"Since the beginning of 2023, Chin Chopa has posted over $1,260,464.18 in vouches for Amazon refunds," the complaint said. Vouches refer to the screenshots posted as proof of funds received.

While the lawsuit does not identify the operators of the Telegram account, it does name seven US defendants and one Canadian who are said to have used and promoted the illegal service to obtain products, including multiple MacBook Pro laptops and an iPad.

Attorneys for the defendants have not been identified on the federal court docket.

Amazon customers are responsible for "all activities that occur under their account or password," according to the company's Conditions of Use, the lawsuit says.

Chin Chopa is the second major group in less than a year to be targeted by Amazon's Customer Protection & Enforcement team. An earlier lawsuit was filed against a group based in Lithuania known as Rekk.

Jamie Wendell, the head of the CPE team said in a LinkedIn post that these groups and others like it are collectively responsible for tens of millions of dollars in losses across three continents.

"Amazon is addressing this issue head-on through the development of tools that use machine learning models to proactively detect and prevent fraud, as well as employing specialized teams dedicated to detecting, investigating and stopping fraud," an Amazon spokesperson said in a statement to Business Insider. "This lawsuit sends a strong message that participating in fraudulent refund schemes has severe consequences."