Amazon Seller Scams to Watch Out For
Watch out for these Amazon scams
The pitches that separate new Amazon sellers from their money, and the court records that prove how they end. Every case below is public, filed by the Federal Trade Commission or a state attorney general, and linked to the source.
Read the book Seller terms glossaryWritten by James Armstrong, who managed more than 300 Amazon seller accounts.
- $21.7M judgment — Automators AI
- $15.7M judgment — FBA Machine
- $14M+ consumer losses — Click Profit
- $35,000 top upsell — FBA Stores
Why this page exists
In twenty-seven years selling on Amazon and managing accounts for other people, the same handful of pitches kept arriving at my clients’ doors. They are not clever. They work because they arrive at the exact moment somebody has decided to change their life and has not yet learned what the words mean.
What follows is not opinion and it is not a rumour. Each pattern below has been the subject of a real enforcement action, with a case number and a dollar figure you can look up yourself. If a pitch you are considering matches one of these shapes, that is worth knowing before the money leaves your account.
Where a case was resolved by a stipulated or proposed settlement, the defendants did not admit wrongdoing, and I have described those matters as allegations. That distinction matters and I am not going to blur it.
1. Amazon automation and “done-for-you” stores
The most expensive pitch in the category. Someone offers to build and run an Amazon storefront on your behalf while you keep your day job. You supply the capital, they supply the “system,” and the income is described as passive.
“Turnkey.” “Hands-off.” “AI-powered.” “We only win when you win.” Often paired with a claimed relationship with a brand you recognise, or with Amazon itself.
Management fees from five figures upward, plus whatever you are told to spend on inventory. One operator charged as much as $100,000 for the programme.
Your name is on the account. When the tactics breach Amazon’s policies, your account is deactivated and your capital is sitting in inventory you cannot sell. The operator’s name is on nothing.
The court record
Automators AI, Empire Ecommerce and Onyx Distribution. The FTC sued in August 2023, alleging the operators deceived consumers with unfounded promises of passive investment income from AI-powered storefronts. In the February 2024 settlement the orders carried a total monetary judgment of $21,765,902.65, partially suspended based on an inability to pay, and most defendants accepted a permanent ban on selling e-commerce business opportunities or coaching. FTC press release
FBA Machine, formerly Passive Scaling. The FTC filed suit in June 2024 alleging that the company and owner Bratislav Rozenfeld falsely guaranteed income from AI-powered online storefronts and defrauded consumers of more than $15 million. The proposed settlement announced in July 2025 included a total monetary judgment of $15.7 million, partially suspended, and a permanent ban on selling business opportunities. FTC press release
Click Profit, also trading as FBALaunch, Automation Industries and PortfolioLaunch. In March 2025 a federal court temporarily halted the operation at the FTC’s request. The complaint alleges consumers were charged a management fee of at least $45,000 each, plus inventory costs, on the promise of AI-driven passive income, and that the scheme cost consumers at least $14 million. The FTC’s filing cites the company’s own figures: more than a fifth of its Amazon stores earned nothing at all, and another third earned under $2,500 gross. FTC press release
DK Automation, trading as AMZDFY, Amazon Done For You and Amazon Done With You. The FTC acted in November 2022 over claims consumers could “generate passive income on autopilot.” The proposed order required the defendants to turn over $2.6 million. The complaint alleges the operators kept making deceptive earnings claims after receiving the FTC’s Notices of Penalty Offenses, and that sales material was filled with fake reviews. FTC press release
2. The free seminar that becomes a $35,000 course
A free local workshop, or a cheap one, that exists only to sell the next tier. The escalation is the product.
In December 2017 the Washington State Attorney General sued FBA Stores LLC and brothers Adam and Chris Bowser under the state’s Consumer Protection Act and Business Opportunity Fraud Act. Amazon joined the action. According to the complaint, attendees were promised “secrets” that would earn them $5,000 to $10,000 a month on under an hour of work a day, then pushed toward further training priced from $1,000 to as much as $35,000. Consumers were required to pay at least $995 before they were permitted to read the contract.
The detail that should stop anyone cold: the techniques taught, including buying fake reviews and opening second accounts, violate Amazon’s terms of service. Students risked having their accounts shut down by following the instruction they had paid for. Separately, the complaint notes, the same operators ran a service charging people for help getting suspensions lifted. Washington State AG announcement
You cannot see the contract until you have paid. No legitimate business relationship starts with a non-refundable fee for the right to read terms.
Claimed inside access to Amazon executives or a special relationship with Amazon. Amazon does not appoint gurus.
The room is engineered for urgency — today-only pricing, financing applications handed out during the break, credit limits raised on the spot.
3. The merchant cash advance that arrives when cash is tight
Not always a scam, and that is precisely what makes it dangerous. A merchant cash advance is a real product that is legal, fast, and frequently ruinous for a thin-margin seller.
You receive money up front and repay a larger fixed amount through daily automatic withdrawals. Because it is structured as a purchase of future receivables rather than a loan, it is not quoted as an interest rate. It is quoted as a factor rate, typically between 1.15 and 1.45. A factor rate of 1.35 on $100,000 means you repay $135,000, and if it is repaid over six months the annualised cost is far higher than the number implies.
The enforcement history is real. In April 2021, Yellowstone Capital, Fundry Inc. and two owners agreed to surrender $9,837,000 to the FTC to settle allegations that they withdrew money from small business bank accounts without permission, continuing to take payments for days after balances had been repaid, and misled owners about how much funding they would actually receive and about personal guarantees. FTC press release
The timing is the trap. These offers find you when a disbursement is held or a season disappoints — the exact moment your judgement is worst and daily withdrawals are least survivable.
4. Attacks that come from your competitors
Nobody warns new sellers that a share of their risk comes from rivals rather than from Amazon.
A competitor buys your product, returns a brick or a used unit, and your account absorbs the return-rate damage and the refund.
A rights complaint filed against your listing takes it down first and gets examined later. Reinstatement is on your time and your cash flow.
Fake reviews pointed at you, not for you, to trip Amazon’s own review manipulation detection and put your account under review.
Unauthorised sellers attach to your ASIN, or your images and bullets are edited by someone who should not have access.
A false safety report on an ordinary product can freeze a listing for weeks while documentation is reviewed.
Large orders placed and cancelled to distort your forecasting and stock planning.
None of this is a reason not to sell. It is a reason to know your defences before you are the one being attacked, and to keep your documentation in order from the first shipment rather than the first crisis.
5. Fake suspension and phishing messages
Once you are selling, you become a target for people impersonating Amazon itself.
The message says your account has been suspended, your disbursement is on hold, or your listing has a rights complaint. It arrives by email or text, looks close enough to genuine, and pushes you to a login page that harvests your Seller Central credentials. Sellers are unusually vulnerable to this because a suspension email is plausible — the real ones look nearly as alarming.
Never act from a link in a message. Open Seller Central yourself and read the notice there. If it is real, it is in your account.
Anyone guaranteeing reinstatement is guaranteeing something they do not control. The decision is Amazon’s, and no fee changes that.
Turn it on, and never read a code aloud to somebody who telephoned you. Amazon will not ring you to ask for one.
6. Suppliers, invoices and the ungating trap
To sell certain brands and categories you must be ungated, which means submitting supplier invoices Amazon will accept. An industry exists to sell shortcuts.
Fake or doctored invoices, purchased “ungating packages,” and distributors who cannot supply a verifiable paper trail all end the same way. Submitting an invoice Amazon rejects as inauthentic does not merely fail — it can cost you the account outright, and that outcome is far harder to reverse than a rejected application.
The associated pattern is the supplier who takes a deposit and never ships, or ships counterfeit goods you then sell in good faith. Either way the enforcement lands on your account, because you are the seller of record.
The shape they all share
Strip away the specifics and every pitch on this page has the same skeleton. If you can recognise the skeleton, you do not need to have heard of the particular company.
Income described as arriving without your attention. Retail is not passive. It has never been passive.
A deadline that exists for their benefit, not yours. Real opportunities survive you sleeping on them.
Names dropped — Amazon, Nike, Disney — that cannot be verified and are not there to be verified.
The account, the capital and the liability are yours. The fee is theirs, and it is charged whether you profit or not.
Screenshots instead of statements, testimonials instead of accounts, averages with no denominator.
Money changes hands before you have read what you are agreeing to.
The whole story is in the book
These are the patterns in outline. Why Not to Sell on Amazon covers the fee arithmetic, account health, disbursement holds, competitor attacks and exits in full — and the forty-question test that tells you whether to start at all.
Read the book and see the toolsNo consultation, no discovery call, nobody will telephone you. There is nothing here but documents.