Refund Fraud Schemes Proliferate on Apps Like Telegram

Last month’s arrest of Telegram CEO Pavel Durov spotlighted the platform’s ties to criminal activity.

The crimes include people trafficking in weapons, stolen identities and child sexual abuse material. Add to that list another offense: returns fraud.

Messaging apps like Telegram have become a popular place for fraudsters to promote schemes involving fraudulently returned merchandise, The Wall Street Journal reported Wednesday (Sept. 11).

Some of these cases involve scammers returning knockoffs in place of designer goods or sending back boxes filled with bricks, according to the report. Others manipulate shipping labels to get a refund by sending back an empty envelope.

It’s becoming a major problem, costing retailers $101 billion last year, according to National Retail Federation estimates.

Industry experts say scammers are sharing tips on how to exploit a specific retailer’s returns policies, per the report. Some scammers offer “refunding services” that can get customers full refunds in days without actually returning the products.

A spokesman for Telegram said the company’s moderators look to remove all fraud-related content and argued that the site’s growth to nearly 1 billion users “has caused growing pains in its content moderation,” according to the report.

PYMNTS examined the problem of returns fraud earlier this year in an interview with Doriel Abrahams of Forter and Richard Kostick, CEO of 100% PURE.

“We believe that around 15% of returns are actually fraudulent” or represent abuse of the system, said Abrahams. In addition to scammers returning empty boxes or packages loaded with filler like bricks, some will even resell the items they have received after being refunded.

More recently, PYMNTS spoke with Loop CEO Hannah Bravo, who said returns fraud presents an opportunity for both brands and solution providers.

“Returns fraud and policy abuse have become difficult behaviors for retailers to prevent, turning into a major drag on many brands’ margins and contributing to major financial losses,” she said.

For companies like Loop, this means capitalizing on the opportunity to provide comprehensive fraud prevention solutions, Bravo added, such as integrated tracking tools, advanced analytics and automation to help retailers tackle fraud more efficiently.