Embezzled $60 million?! FTC forces Amazon to return the money

Recently, Amazon announced that it had accepted the settlement conditions proposed by the Federal Trade Commission (FTC) and requested the FTC to drop the charges against Amazon. The FTC's charges indicated that Amazon was embezzling the tips of delivery drivers across the United States, amounting to as much as $61.7 million!

When Amazon launched the Amazon Flex program in 2015, it promised independent logistics contractors that they could receive a basic hourly wage of $18-25 and could keep all tips left by customers through the Amazon app, without Amazon deducting any fees from the tips. This favorable condition attracted a large number of drivers to participate in the Amazon Flex program , which became an important part of Amazon's huge distribution network.

Around the beginning of 2017, Amazon began to gradually reduce the base hourly wage and deduct some tips without notice, saying "to make up the difference." At first, Amazon's actions were small, with only sporadic reports that were easily covered up by Amazon. At the end of 2019, the situation became more and more serious, and the complaints of delivery drivers finally attracted the attention of the FTC, which eventually intervened to investigate.

After nearly a year-long investigation, the FTC determined that Amazon had indeed embezzled tips from delivery drivers, with the amount embezzled being determined to be $61.7 million, nearly 30% of the total tips . The FTC formally filed charges against Amazon at the end of last year, demanding that it disclose the hourly wage and tip system of the Flex program and return the embezzled money. Otherwise, Amazon will be fined a large amount of several times the embezzled money.

At the same time as my brother-in-law announced his resignation yesterday, Amazon also announced that it would accept the FTC's conditions to return $61.7 million to the facility drivers , and stated in the settlement terms that Amazon must be transparent about the drivers' hourly wages and tips, and must obtain the drivers' explicit knowledge and consent before making any changes.

After all, this is equivalent to admitting that he embezzled the driver's tips, which is half a scandal , so Amazon released it together with the big news of the brother-in-law's resignation, fearing that others would find out about it. Companies like Amazon may have problems with embezzlement of funds, and we sellers must not be greedy for small gains when dealing with issues related to funds.

Amazon’s previously updated official payment service provider plan was launched for this purpose. With official supervision, if financial accidents such as the above occur, the official can take action to ensure the safety of sellers’ funds.

When I was checking the page these two days, I found that in addition to the 4 third parties announced at the beginning and the world's first self-operated product by Amazon, AirPix has also joined the payment service provider plan. There are quite a lot of sellers among our fans who use this company to receive payments. Now we can rest assured without having to change the payment method!

This also means that new third-party platforms may be added to this list at any time in the future, so I still advise everyone the same as last time. If the institution you use for yourself is not in the plan, there is no need to rush to change it for the time being . After all, the loss will outweigh the gain if the change triggers the review. It is better to wait until May or the payment platform clarifies the policy before deciding whether to change.

If the payment institution you are using explicitly does not participate in the payment service provider plan (basically impossible), then the seller must change to a compliant payment method, otherwise you will not be able to withdraw even the store balance in July. At this time, you can take the following measures to reduce the chance of being audited.

1. Change the payment account on the computer where you operate your Amazon account on a daily basis to avoid the situation where you rarely log in to the account and change the payment account as soon as you log in. This can easily trigger a system audit.

2. Try to avoid changing the receiving account within three days before and after the platform payment date. This will easily lead to the account being judged as risky and triggering an audit.

3. If you have recently changed the payment account, it is best to wait for a while, such as a payment cycle, before switching, and do not delete the old account in a hurry.

4. Before changing the payment account, be sure to report to Amazon first, either by opening a case or sending an email, to eliminate the risk of Amazon misjudging the operation as someone else's.