Australia issues major warning to locals over ‘ghost stores' scam posing as businesses
The Australian Competition and Consumer Commission (ACCC) received more than 360 complaints about 60 retailers that operate as ghost stores this year, but believe many more could be in operation.
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The ACCC alleges these 'ghost stores' making false claims they are a local Australian business that is closing down – claiming to sell high-quality clothing and footwear.
In reality, they are based overseas and ship inferior, low-quality items.
3 The website everly.melbourne.com had a 'closing sale' for customers with up to 80% off products.
Ghost stores target consumers through social media ads, then close and rebrand under new names, often using different Australian suburbs, towns or cities in their business name to appear as a local business.
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The ACCC issued a public warning to notify consumers of four websites currently in operation including everly.melbourne.com, willowandgrace-adelaide.com, sophie-claire.com and doublebayboutique.com.
ACCC deputy chair Catriona Lowe warned Australians about the risks of engaging with these websites, alleging they are not based in Melbourne, Adelaide or Double Bay and they were not closing down.
'We further allege that the operators of these websites are supplying products which are not of the advertised quality,' she said.
3 Sophie-claire.com also had a 'closing sale,' telling customers that due to financial reasons they can no longer stay open.
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Authorities are concerned the conduct is widespread and there were many online ghost stores in operation that falsely claim to be local boutiques but supply poor quality products.
Ghost stores also refuse refunds, or only offer partial refunds to consumers who complain about the inferior quality of the goods compared to what is advertised, or do not respond to complaints at all.
Lowe urged people to think twice before clicking on ads they saw on social media which claim to be from a boutique business based in a local town or city.
'Often ghost stores will share an emotional story on their social media or website that they are a small, locally operated business, needing to close for financial reasons,' she said.
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3 Doublebayboutique.com had merchandise up to 50% for their 'closing sale.'
'They will claim they are having a 'closing down sale' as a result, with all stock heavily discounted and available on a very limited basis.
'This conduct preys on the empathy of consumers who have a genuine desire to support local businesses, as well as creating a false sense of urgency.
'The websites often use a similar format to many other online stores, advertising high-quality boutique clothing at heavily discounted prices.
'However, when the product arrives in the mail, consumers report receiving cheap, mass-produced products that have been sold at an inflated price and do not fit their advertised quality or description.'
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