Cashback churning gone too far

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Alright, the real question is, what were their FW usernames?

http://www.techflash.com/seattle/2012/04/brothers-plead-guilty-o...

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BTW they ended up losing a million dollars and 2 years in the fed pen.

umcsom (Aug. 23, 2012 @ 9:36p) |

75% if the Chiu's behave themselves en el bote

xoneinax (Aug. 23, 2012 @ 10:36p) |

I'm not sure that's the right way to put it.

LordKronos (Aug. 24, 2012 @ 6:54a) |

Link to the information (thanks 0AfterRebates): http://www.scribd.com/doc/88640072/Nordstrom-Fraud-Scheme
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Wow! I have received many free cashbacks due to order cancellation but this is amazing!! FWIW, the free cashbacks were from *deleted*, *deleted*, Canon (no longer) and eBay (no longer available and only on certain type of cancelled transaction).

sabhinav said:   Wow! I have received many free cashbacks due to order cancellation but this is amazing!! FWIW, the free cashbacks were from deleted
(no longer) and eBay (no longer available and only on certain type of cancelled transaction).


Don't admit that lest you want to be arrested too

I can't believe they entered a guilty plea

They are Probably too cheap to pay for a lawyer!!

Smart fwers would have stopped after the first million.

bbb?

Unless they were planning on fleeing the country, how exactly did they expect to get away with this?

Does fw have to return their share of the loot?

JorgeBurrito said:   Smart fwers would have stopped after the first million.

or moved to a non-extradition country before starting

SUCKISSTAPLES said:   sabhinav said:   Wow! I have received many free cashbacks due to order cancellation but this is amazing!! FWIW, the free cashbacks were from *deleted*, *deleted*, Canon (no longer) and eBay (no longer available and only on certain type of cancelled transaction).

Don't admit that lest you want to be arrested too

I can't believe they entered a guilty plea

They are Probably too cheap to pay for a lawyer!!


SIS,
Can you fix it too??? Since the names of teh merchants are showing in your response.

Nordstrom doesn't currently give CashBack through the fatwallet portal. Wonder if this is related?
They are available pretty much everywhere else.

SUCKISSTAPLES said:   sabhinav said:   Wow! I have received many free cashbacks due to order cancellation but this is amazing!! FWIW, the free cashbacks were from Sears, Lowes, Canon (no longer) and eBay (no longer available and only on certain type of cancelled transaction).

Don't admit that lest you want to be arrested too

I can't believe they entered a guilty plea

They are Probably too cheap to pay for a lawyer!!


Seriously, is that illegal? I don't see where there's defrauding, but then I'm not a lawyer.

wow

How the heck did you guys at FatWallet miss that?

0AfterRebates said:   How the heck did you guys at FatWallet miss that?

They were probably hoping these guys would stop before they got caught.

I assume it was fraud because nothing ever shipped? Would this also be considered fraud if they shipped and then returned to the store?

ironfist99 said:   I assume it was fraud because nothing ever shipped? Would this also be considered fraud if they shipped and then returned to the store?
The way I read the article, it sounds like Nordstrom cancelled the order before it was shipped. I'm not sure how this was fraud? Was it because they kept the money FW CashBack paid them? It sounds to me like Nordstrom found out they did something boneheaded, and are going after the biggest fish they can find to try to make up for it.

I also can't believe they entered a plea of guilty...

I guess it's fraud because they knew Nordstrom would repeat this mistake, and they took steps to force it over and over. Kind of like a fast-talking "Can you give me change for a $20" con where the fraudster actively confuses a cashier to get extra money.

Except Nordstrom was a lot stupider to put such a flaw in place and then apparently take forever to notice the huge volume of activity that lead to the 'mostly' canceled orders.

I'd say ship & return would be fraud if they knew Nordstrom would incorrectly not pull back the commission under some conditions and they did that over and over. I think it's not fraud the first time when you encounter the apparent mistake, but deliberately repeating it is probably where it becomes a crime.

Ok. How about this.

How is this glitch different than THISglitch?

n/m

FW has serious problems with their internal control to let this happen. They paid this guy over a mil and they didn't notice anything? Seriously, someone should be fired here.

Ok so who wants to be the smarta** who posts on the Fatwallet forum asking for Nordstrom CashBack?

ChaseDestructor said:   Impossible. This story is BS.Here is the press release from the DOJ.

SUCKISSTAPLES said:   
I can't believe they entered a guilty plea

They are Probably too cheap to pay for a lawyer!!
Or they couldnt afford one, if all their assets were seized as restitution.

Probably a plea deal for the limited sentence of "no more than 30 months". Hate to be them when they get asked by the other inmates of what they were convicted of.

From the DOJ press release:
According to records filed in the case, in 2008 the CHIU brothers were barred from ordering merchandise from Nordstrom.com because of excessive claims for refunds based on representations that merchandise had never been delivered. However, both brothers continued to try to place orders with Nordstrom.com.
<snip>
In January 2010, the brothers discovered they could exploit a computer programming error in Nordstromís ordering system by placing orders that would ultimately be blocked by Nordstrom. No merchandise would ship and nothing would be charged to their credit card. However, Nordstrom would unknowingly continue to compensate FatWallet for the order, and the brothers would still receive the Cash Back credit from FatWallet. Between January 2010 and continuing through October 2011, the CHIU brothers collectively placed more than $23 million in fraudulent orders through Nordstrom.com. The fraudulent ordering resulted in Nordstrom paying $1.4 million in rebates and commissions, with more than $650,000 in fraudulent Cash Back payments going directly to the brothers. The error that permitted the continued payment of rebates in the ordering system has since been fixed.

This shed more light on the issue. They were barred by Nordstrom previous to this exploit. Maybe that is why their "orders" were blocked but due to a glitch, the rebates were still paid out.
This also seems to suggest that out, FW got about half of the 1.4 mil paid by Nordstrom, whereas the brothers got the other half.

someone enlighten me

how is this a crime?

hungngo83 said:   FW has serious problems with their internal control to let this happen. They paid this guy over a mil and they didn't notice anything? Seriously, someone should be fired here.
Fired?

Someone at FW needs to be prosecuted since FW received more than half of that 1.4m commission. Trying to claim "we didn't know" would be pure BS. No way the brothers accumulated that kind of cb without FW noticing. No freaking way.

BNizzle said:   0AfterRebates said:   How the heck did you guys at FatWallet miss that?

They were probably hoping these guys would stop before they got caught.

FW was silently encouraging it considering its cut was bigger than the brothers.

mrkk said:   someone enlighten me

how is this a crime?


Well, I'm sure there's something they can get them on with the taking rebates for cancelled orders (not sure how they'd put it, but I'm sure they'd find something, however vague). But aside from them, at the least I'd figure it would be some form of electronic/computer trespassing. If they were already told not to place any more orders and they continued, I imagine that could be similar to being told never to return to a store and then going back. It's trespassing, though I doubt that alone would be 30 months.

uutxs said:   From the DOJ press release:
According to records filed in the case, in 2008 the CHIU brothers were barred from ordering merchandise from Nordstrom.com because of excessive claims for refunds based on representations that merchandise had never been delivered. However, both brothers continued to try to place orders with Nordstrom.com.



Seems very likely the were also then defrauding Nordstroms by lying about not receiving merchandise. Would be interesting to see how much of the supposedly-not-received merchandise was sold on eBay/craigslist (I wonder how long each keeps records for).

Are app-o-ramas still legal?

TrueKnight said:   Probably a plea deal for the limited sentence of "no more than 30 months". Hate to be them when they get asked by the other inmates of what they were convicted of.Federal judges are notorious for disregarding prosecution recommendations and throwing the book at guys like this. This is very similar to a case I was involved in where the Defendant snitched and got a glowing recommendation from the US Attorney's office. The judge 100% disregarded this recommendation and gave the dude the maximum allowed under the guidelines.

I wonder who these two snitched on. I also wonder how big the shitstorm was that the retailer directed towards FW... with FW inevitably sacrificing these two buffoons in order to protect their business model.

ironfist99 said:   I assume it was fraud because nothing ever shipped? Would this also be considered fraud if they shipped and then returned to the store?

Why wouldn't norstrom be responsible for tracking affiliate payments on cancelled orders? If they had done THEIR job, they wouldn't have awarded one penny unjustly. I say majority of the blame falls on them not diligent in their program and manpower tracking it.

ChaseDestructor said:   hungngo83 said:   FW has serious problems with their internal control to let this happen. They paid this guy over a mil and they didn't notice anything? Seriously, someone should be fired here.
Fired?

Someone at FW needs to be prosecuted since FW received more than half of that 1.4m commission. Trying to claim "we didn't know" would be pure BS. No way the brothers accumulated that kind of cb without FW noticing. No freaking way.
It happened over a period of almost 2 years. Its not like they cut a $600k CashBack check one month. I'm sure it isnt all that extreme anyways, when considering there are resellers that boost their margins with such referal CashBack; FW has no way of knowing the orders were being canceled unless the merchant tells them (actually, FW doesnt even record the CashBack until the merchant notifies them of a completed sale).


Want a laugh?

[QUOTE]....The Attorney's Office adds that "the error that permitted the continued payment of rebates in the ordering system has since been fixed."....[/QUOTE]

I expect youse guys to double-check that, 'salright?

(Sorry. Hey, FW why won't the message buttons work?)

This makes me wonder whether we should all expect to go to jail for Fatwallet deals. I've seen lots of deals where the rebate is larger than the cost of the item. Can we be arrested for doing too many of these? I wonder if Fatwallet will get closed down by Homeland Security for being a conduit for criminal actions.

hungngo83 said:   FW has serious problems with their internal control to let this happen. They paid this guy over a mil and they didn't notice anything? Seriously, someone should be fired here.

There's a chance that they created a whole bunch of accounts hoping that they would flyer under the radar.

bluechalk said:   This makes me wonder whether we should all expect to go to jail for Fatwallet deals. I've seen lots of deals where the rebate is larger than the cost of the item. Can we be arrested for doing too many of these? I wonder if Fatwallet will get closed down by Homeland Security for being a conduit for criminal actions.The case seems predicated on them having already been banned from Nordstrom (there's various references to them having done this with other merchants as well, which are conspicuously absent from the court filing, presumably because they hadnt previously been banned from those merchants).

It's like earning CashBack from the AARP card, being told your no longer welcome as a chase customer, then finding a glitch that allows you to continue using your closed account and earn more CashBack. The lesson to be learned is not to be wary of the loopholes we all love to find, its to be wary of loopholes that contradict what you've officially been told.

Skipping 551 Messages...
umcsom said:   BTW they ended up losing a million dollars and 2 years in the fed pen.

I'm not sure that's the right way to put it.



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