Latest news with #ConsumerActionLawCentre
SBS Australia
03-07-2025
- Business
- SBS Australia
Misleading 'ghost stores' trick Australian consumers
Australians have been warned to stay alert for "ghost stores" as shoppers who fall victim have few avenues for recourse. At least four such stores have been noted by the Australian consumer watchdog for misleading shoppers into buying low-quality items. They often claim to be local Australian businesses that are closing down and selling off high-quality goods, when they are actually based overseas and sell poor-quality, drop-shipped clothes and footwear. "This conduct preys on the empathy of consumers who have a genuine desire to support local businesses," Australian Competition and Consumer Commission deputy chair Catriona Lowe said. The commission specifically issued public warning notices about and However, the issue appears to be more widespread, with the watchdog receiving at least 360 reports about 60 online retailers since the start of 2025. Many complaints alleged ghost stores were refusing to provide refunds, were offering only partial refunds, or were not responding to complaints at all. Normally, Australians could pursue their consumer rights and go to a local store. But because so many of the shops operate overseas, the usual consumer guarantees would not apply, Consumer Action Law Centre legal director Stephen Nowicki said. "There's very little you can do," he added. The commission has urged consumers to contact their bank to see if they can reverse the charge or stop the transaction. While this can be done when Australians fall victim to scams, the situation with ghost stores is less clear because shoppers still receive a product. "It becomes harder in these kinds of situations, compared to an outright scam, to know what is a genuine discount versus what someone is presenting as a discount but is something not worth what they are promoting it as," Mr Nowicki said. But there are some potential areas for reform. Though governments could not pass laws that would give consumers jurisdiction against an overseas business, they could try to block and prevent advertising in the first place. How to spot a 'ghost store' Operators generally target Australians through social media ads on platforms like Facebook and Instagram. They make themselves appear local by closing and then rebranding under new names that use different Australian suburbs, towns or cities. The competition and consumer commission has written to Meta, which owns both platforms, and e-commerce giant Shopify, which can be used to host and operate ghost web stores. It has also tried to educate shoppers. Ghost store domains often end with ".com" and not ". and many use AI-generated images. They also generally do not provide a physical address or a means of contact beyond an email address, while their Privacy Policy or Terms of Service sometimes refers to international regulations rather than Australian laws.
Perth Now
03-07-2025
- Business
- Perth Now
Misleading 'ghost stores' haunting Australian consumers
Australians have been warned to stay alert for "ghost stores" as shoppers who fall victim have few avenues for recourse. At least four such stores have been noted by the Australian consumer watchdog for misleading shoppers into buying low-quality items. They often claim to be local Australian businesses that are closing down and selling off high-quality goods, when they are actually based overseas and sell poor-quality, drop-shipped clothes and footwear. "This conduct preys on the empathy of consumers who have a genuine desire to support local businesses," Australian Competition and Consumer Commission deputy chair Catriona Lowe said. The commission specifically issued public warning notices about and However, the issue appears to be more widespread with the watchdog receiving at least 360 reports about 60 online retailers since the start of 2025. Many complaints alleged ghost stores were refusing to provide refunds, were offering only partial refunds or were not responding to complaints at all. Normally, Australians could pursue their consumer rights and go to a local store. But because so many of the shops operate overseas, the usual consumer guarantees would not apply, Consumer Action Law Centre legal director Stephen Nowicki said. "There's very little you can do," he told AAP. The commission has urged consumers to contact their bank to see if they can reverse the charge or stop the transaction. While this can be done when Australians fall victim to scams, the situation with ghost stores is less clear because shoppers still receive a product. "It becomes harder in these kinds of situations, compared to an outright scam, to know what is a genuine discount versus what someone is presenting as a discount but is actually something not worth what they are promoting it as," Mr Nowicki said. But there are some potential areas for reform. Though governments could not pass laws that would give consumers jurisdiction against an overseas business, they could try to block and prevent advertising in the first place. Operators generally target Australians through social media ads on platforms like Facebook and Instagram. They make themselves appear local by closing and then rebranding under new names that use different Australian suburbs, towns or cities. The competition and consumer commission has written to Meta, which owns both platforms, and e-commerce giant Shopify, which can be used to host and operate ghost web stores. It has also tried to educate shoppers. Ghost store domains often end with ".com" and not ". and many use AI-generated images. They also generally do not provide a physical address or a means of contact beyond an email address, while their Privacy Policy or Terms of Service sometimes refers to international regulations rather than Australian laws.
Herald Sun
10-06-2025
- Business
- Herald Sun
Aussie consumers warned over ‘dangerous' wage advancing pay trend
Don't miss out on the headlines from Business Breaking News. Followed categories will be added to My News. Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act, a long-time campaign goal for consumer advocacy groups. 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said. Originally published as Consumer advocates warn Aussies about 'dangerous' wage advancing products and call for further regulation
News.com.au
10-06-2025
- Business
- News.com.au
Consumer advocates warn Aussies about ‘dangerous' wage advancing products and call for further regulation
Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act, a long-time campaign goal for consumer advocacy groups. 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said.
Perth Now
10-06-2025
- Business
- Perth Now
Aussies warned over new pay trend
Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. Consumer advocates have warned the wage advancing products are sending thousands into debt spirals. NewsWire / Nicholas Eagar Credit: NewsWire 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act, a long-time campaign goal for consumer advocacy groups. Buy now, pay later products face regulation under the Credit Act from June 10. NewsWire / Gaye Gerard Credit: News Corp Australia 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said.
