INDIANAPOLIS (WXIN) – People trying to snag a new Xbox Series X or a PlayStation 5 this holiday season are having a hard time buying one as the stock seems to sell out as soon as it’s released. Experts say you may not be losing out to another person at all, but a “Grinch bot.”
New York Congressman Paul Tonko announced that he plans to reintroduce the ‘Stopping Grinch Bots Act’ next year in Congress. He said he believes the Act has a better chance of passing under the Biden administration.
“Our Grinch Bots bill will make it possible for smaller retailers to have a fair shot at stocking these items for their loyal customers and will restore fairness for consumers so that they’re not paying inflated prices because a few unscrupulous people took advantage online,” Tonko said.
“It’s a computer program basically designed to buy up all the product so that it’s not available, and whoever has it, can sell it for much greater profit,” explained Doug Kouns, a former FBI Agent who now owns the private investigation firm Veracity IIR. “What I’m most familiar with in this concept is ticket sales. Back before CAPTCHAs, people could set up programs that could go onto Ticketmaster, Live Nation, whatever it is, and buy up all the tickets, and they scalp them for multiples of what they are actually worth.”
The BOTS Act in 2016 banned the use of bots for scalping but did not mention any halt in the e-commerce arena. Companies did get smarter about the purchasing process by adding what is called a CAPTCHA. You may recognize them as a word or code graphic you have to input before purchasing.
CAPTCHAs also come in the form of a grid of pictures, where a few of the squares may have a common image like a bridge, sign or vehicle. The user must identify which blocks have the correct image to prove they are indeed human.
An anti-Grinch bot bill has been proposed but has stalled in Congress. The holdup continues to allow programmers to develop bots to foil the average consumer when they are buying hot holiday products or limited-edition releases.
Grinch bots are commonly used in the sneaker collection world. When a limited-edition pair is released by a company online, these bots can pick them up faster than a human can work their computer.
“To us … it’s sold out, but the program is buying as much up as it can at a rate we can’t keep up with,” explained internet attorney Andrew Rossow. “On one hand, it seems advantageous to the company, as the bot itself is buying the product, but at the same time, it’s eliminating an entirely separate demographic. It would appear advantageous, but I don’t think it is.”
In addition to buying up products for higher value resales, programmers also sell the bots themselves to the average consumers. Rossow says they can be found fairly easily online. An eager-to-please parent may even try to use the bot to buy two of the item and then sell the second one at a higher price online to recoup the money lost from buying the bot. While this may seem like a great idea, Rossow says it’s buyer beware.
“Think of it as a subscription service or often a licensing deal. My first advice is do so at your own risk, and be very, very careful,” cautioned Rossow. “They are not hard to find, these pieces of software you can find online, but the problem is understanding and distinguishing legitimate bot software from counterfeit, or software designed to steal your information. What have you just done? You’ve given these individuals a brand-new Christmas gift.”