B.C. man accused in Amazon 'refund fraud' lawsuit

A Burnaby, B.C., man is one of eight people being sued by Amazon to recoup millions in losses to a shadowy conspiracy accused of manipulating the online retail giant's policies to obtain refunds for products that were never returned.

The man — who the CBC is calling BW — is the only Canadian named in a lawsuit filed last week in U.S. District Court in Seattle against eight individuals and up to 20 members of an "international fraud organization called Chin Chopa."

According to the lawsuit, BW ordered more than $9,000 worth of Apple products earlier this year before engaging the services of Chin Chopa for a percentage of that money to "obtain a refund, claiming he received an empty box."

"As a result, (BW)  and Chin Chopa stole a laptop and an iPad, and Chin Chopa received hundreds of dollars for facilitating the fraud," the lawsuit reads.

'Chin Chopa uses sophisticated methods'

The 41-page lawsuit is Amazon's latest salvo in a battle to fight "systematic refund fraud" — which the company claims "leaves retailers and honest consumers to bear the brunt of increased costs, decreased inventory, and poor return experiences."

The lawsuit claims Chin Chopa is made of people from around the world who operate through "a Telegram channel that has over 2,000 followers where they brazenly advertise refund services that they fully admit are fraudulent."

"In this scheme, bad actors who want a free product (like an iPad) pay Chin Chopa a fee (such as 30 per cent of the product's cost) to obtain a fraudulent refund," the lawsuit says.

"Chin Chopa uses sophisticated methods to obtain the refund, including socially engineering Amazon customer service. The ... scheme tricks Amazon into processing refunds for products that are never returned."

The court documents claim that Chin Chopa "typically claims the item received was an empty package."

"In some instances, Amazon Customer Service requests a police report be filed and the information sent to Amazon," the lawsuit says.

"In these cases, the customer account sends a police report for the incident. The police reports sent by the customer attributed to Chin Chopa all appear fraudulent — with mismatching signatures, similar formatting and unusual case numbering."

Minimum price $500

The lawsuit includes a series of Telegram chats between Chin Chopa and an investigator hired by Amazon.

"Chin Chopa told the investigator that the minimum price of a product order to retain Chin Chopa's services was $500," the lawsuit reads.

"Chin Chopa also told the investigator that after placing an order for the product, Chin Chopa would log into the investigator's account to complete the refund."

According to the lawsuit, the investigator then ordered a $635 iPad before engaging Chin Chopa to initiate a return by logging into the investigator's Amazon account.

"Chin Chopa falsely represented to Amazon that the investigator received a box without the ordered iPad. Chin Chopa also falsely represented that the investigator filed a police report detailing the missing product," the lawsuit says.

"Chin Chopa ended and restarted customer service conversations, asked for supervisors, and switched between English- and Spanish-speaking representatives until he found a customer service associate that would grant the refund."

'A critical role in conspiring to defraud Amazon'

All of the individuals named in the court documents — including BW — allegedly also provided so-called "vouches" or testimonials later posted on Chin Chopa's Telegram boasting about their refunds.

"Each of the eight known Chin Chopa User defendants played a critical role in conspiring to defraud Amazon," the lawsuit says.

"Each defendant ... engaged and conspired with Chin Chopa for the purposes of obtaining one or more free products from Amazon, and then actively promoted Chin Chopa's success online to expand the scheme's reach."

Amazon does not specify the amount the company is seeking in damages, but the lawsuit claims the fraudsters have boasted of obtaining at least a million dollars in refunds.

BW could not be reached for comment and has not filed any response to the lawsuit. None of the claims have been proven in court.