Scalping bots jump resellers to the front of the line for in-demand products: Internet Scambusters #948
Scalping bots, capable of buying up all stocks of in-demand retail products, are truly a 2020s' decade phenomenon.
Driven by artificial intelligence, they beat other buyers to the head of the line to buy newly released electronics and limited-edition products and then sell them for outrageous prices.
Let's get started…
How Scalping Bots Rip Off Would-be Buyers
Technology has delivered a new enemy at our doorsteps when we try to buy things that are likely to be in heavy demand -- scalping bots.
These are automated computer systems that bombard sales sites for everything from show tickets (not such a big deal right now) through the current kids' latest craze toys and limited-edition sneakers to the latest video game consoles.
In the past, many of us have encountered those characters who hang around outside sports and show venues offering tickets at outrageous prices. Or the same overpriced deals are offered online on the likes of eBay and Craigslist and, in some cases, by mainstream ticket resellers.
The culprits were mainly people who saw an opportunity to buy and resell and got themselves at the front of the line to buy as much as they could. In past days, retailers and sometimes companies and artists tried to limit how many a single person could buy but with limited success.
Since then, lawmakers have stepped in to thwart sports and entertainment ticket scalpers with the Better Online Ticket Sales (BOTS) Act. This makes it illegal to "circumvent a security measure, access control system, or other technological control or measure on an Internet website or online service that is used by the ticket issuer to enforce posted event ticket purchasing limits or to maintain the integrity of posted online ticket purchasing order rules."
Sounds like a bit of gobbledygook but the US Federal Trades Commission (FTC) has already taken its first actions in the past few weeks against firms for using scalping bots to buy up masses of tickets and resell at inflated prices.
So far, so good. But now, thanks to this technology, scalping has entered a whole new marketplace that is causing distress to many genuine would-be purchasers. These people use computer programs that create multiple identities, jump to the head of the line because of their sheer speed, and try to buy up everything, often leaving little or nothing for the rest of us. They're capable of targeting multiple sellers at once.
Retailers are doing everything they can to stop these hawkers. For example, just before Christmas, Walmart said it had blocked 20 million bot attempts to buy the new PS5 games console in just 30 minutes. Being near to the festive season, Walmart labeled these greedy traders and their artificial intelligence (AI) systems "Grinch bots"!
Xbox consoles and some Nvidia advanced graphics cards used by gamers were also among the targets of those who are politely called "resellers."
PC Magazine called the whole process the "biggest cash cow" of the current health crisis.
The trouble is that there's nothing strictly illegal about what the scalpers are doing. In fact, bot software is publicly available for a few hundred dollars. Some operators have joined the fray after losing their jobs and exploring new ways to make money. And most of the new breed of scalpers are young, often under 20.
Experts reckon the level of reselling had increased three-fold during the past year. And even if or when things return to normal in the coming months, shopping habits are likely to have shifted more to online than ever -- so the bots will continue to operate.
And the trend is no longer just focused on scarce electronics or footwear. PC Magazine quoted one reseller saying: "Swimming pools … were probably one of the most profitable items on eBay I've ever seen. The ones that people get to build out in their backyard. Often flipping for thousands (of dollars) over."
Prices -- and therefore profits -- are said to be well over double manufacturers' recommended levels, with many resellers reported to be buying up as many as 1,000 units of a single item.
Most recently, new communities of scalpers known as "cook groups" have started springing up. These are like chat rooms where members, who pay up to $100 to join, exchange information on what the likely "next big thing" is going to be and which is the latest or best bot software capable of getting around attempts to block them.
What chance have we, the poor end-users, got of standing up to such well-organized activities and to avoid being price-gouged?
"Resellers don't currently care about what the general public thinks. We aren't doing anything wrong; we are just all trying to make money and live," one scalper told reporter Michael Kan.
Options are limited. You could join a cook group, buy the software, and try to make a single purchase yourself. But you'll be up against stiff, sophisticated competition.
Another is to practice patience and wait until prices start to fall or supplies return to retailers' shelves, as they did in the case of Walmart cited above. But for many buyers, that's a lot to ask! And, with limited editions, that won't always happen anyway.
Retailers, as in the Walmart example we cited, are also working to develop countermeasures to identify and block the scalping bots. But insiders in the reseller business are confident they can stay one step ahead. One operator claims to have countered every single bot-blocking attempt during the past few years.
A few enterprising developers also claim to be creating software that buyers can use to beat the scalpers at their own game. For example, the creator of a browser add-in called OctoShop (untested by Scambusters and only available in the US) claims it can match the competition for specific devices. For more on this, see: How to Beat PlayStation 5 Scalpers and Find Your Next-Gen Console.
There's also the possibility of new laws. Walmart Chief Information Security Officer Jerry Geisler was quoted by a gaming site saying the store group was looking to other retailers to join them in pressing for action against scalping bots.
"We hope others across the retail industry will join us by asking lawmakers to do more to prevent these unwanted bots on retail sites so customers have equal access to the products they want," he said.
Alert of the Week
Could you be one of the five hundred million Facebook users whose phone numbers are currently being offered for sale on the dark web at $20 a time?
Possibly, if you gave your number to the social media site in 2019 or before, when the numbers were allegedly accessed.
Facebook has since fixed the issue that led to the alleged leak but if you've been getting more spam calls than normal, that could be an explanation.
Consumer Affairs website has the complete story here: Facebook Users’ Phone Numbers Are Reportedly for Sale on Telegram.
Time to conclude for today -- have a great week!