Latest news with #ghoststores
News.com.au
a day ago
- Business
- News.com.au
Consumer watchdog issues major warning to Aussies over scam ‘ghost stores' posing as local businesses
Australia's consumer watchdog has issued a major warning to online shoppers over several 'ghost stores', which are luring shoppers to buy heavily discounted products from scam websites. 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. 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. 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. The ACCC issued a public warning to notify consumers of four websites currently in operation including and 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. 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. Ms 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. '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.'
SBS Australia
a day ago
- 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.
The Guardian
a day ago
- Business
- The Guardian
Australian consumer watchdog issues public warning about ‘ghost stores' and urges Meta and Shopify to crack down
Australia's consumer regulator has put Shopify and Meta on notice, urging the e-commerce and social media platforms to take action against online 'ghost stores' pretending to be local businesses in order to dupe shoppers. The Australian Competition and Consumer Commission (ACCC) on Thursday issued a public warning about ghost stores and announced it had written to Shopify and Meta after an investigation by Guardian Australia identified more than 140 of these sites. Consumer experts had previously urged Shopify and Meta to take responsibility for enabling these sites and allowing them to run false advertising, which is often about fake closing-down sales and accompanied by AI-generated images. The ACCC deputy chair Catriona Lowe said the regulator had urged the online platforms to scrutinise this type of activity on their platforms and take appropriate actions against the operators. 'We are hopeful that by focusing on that part of the transaction, it will actually mean that we can reduce or stop the number of these [sites] getting to consumers in the first place,' Lowe told Guardian Australia on Thursday. She said the ACCC believed this would be more effective than traditional enforcement, given the 'significant practical limitations' of identifying the ghost store operators. Sign up for Guardian Australia's breaking news email 'Typically, the people behind these websites are based overseas, and of course it is all too easy to shut down one website and pop up another one, potentially within minutes,' Lowe said. Lowe on Thursday said the letters the ACCC sent to Shopify and Meta this week marked the first time the regulator had engaged with the platforms on the ghost stores issue. 'We think the ball is firmly in the courts of the owner of these platforms to come and speak to us about actions that they can take,' she said. The sites, which are based overseas, include those drop-shipping poor quality clothing and counterfeit labels, while others take customers' money and fail to deliver anything at all. Some have imitated genuine Australian labels. Lowe said despite the difficulty in identifying those behind the sites, the ACCC had 'some leads' as to where some of the operators were based. 'Theoretically, we could expend what would be a very, very significant amount of time and resource to bring an enforcement action against an overseas entity,' she said. 'But … we just don't see that that's likely to be an effective way of tackling the problem.' Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion The ACCC issued public warning notices about four ghost stores and said it had received at least 360 reports about 60 online retailers since the start of the year, when it began investigating the problem. The ACCC said it was concerned this type of conduct appeared to be widespread and that it was also aware of complaints about ghost stores refusing to provide refunds, only offering partial refunds, or not responding to customers at all. The regulator said the sites were known to target consumers through social media ads and also tend to close and rebrand under new names, often using different Australian suburbs, towns or cities in their names to appear local. A spokesperson for Meta said the company did not want scams on its platforms. 'This is an adversarial space where sophisticated and well-funded cyber-criminal networks often change tactics to stay ahead of detection,' they said. 'We are committed to investing in new technology as well as working with government, law enforcement and industry to help prevent this illegal activity.' Shopify has been contacted for comment.
The Guardian
07-06-2025
- Business
- The Guardian
Online ‘ghost stores' are providing fake tracking numbers to dupe payment platforms, Australian shopper says
Online 'ghost stores' falsely claiming to be Australian businesses are providing fake tracking numbers to convince payment platforms they have delivered goods that have never been sent, a disappointed shopper says. Ghost stores are online businesses that only exist in a digital sense and do not have a physical storefront. Guardian Australia has tracked 140 such stores masquerading as local businesses, which include those selling poor quality clothing and counterfeit labels, while others take customers' money and fail to deliver anything at all. Sign up for Guardian Australia's breaking news email A 63-year-old Geelong woman, who asked not to be identified, said she had a 'distressing' and 'disappointing' experience seeking a refund from PayPal after trying to buy items from the Maison Canberra website in April. She said she had been duped by fictitious advertising on Facebook portraying it as a Canberra-based boutique having a sale after making the difficult decision to close. Her clothing and shoe orders never arrived. The customer said the seller had repeatedly submitted false evidence to PayPal of deliveries, and she believed the payment platform was siding with the business despite her 'efforts to provide clear and legitimate proof to the contrary'. Maison Canberra was built using Shopify, a Canadian multinational e-commerce platform. Neither Maison Canberra nor Shopify has responded to Guardian Australia's repeated requests for comment. On 31 March Guardian Australia bought a blouse for $69.95 from Maison Canberra. The site sent an email on 1 April saying the item had been shipped but it was never delivered. The site has since been taken down. The Geelong woman spent $490.90 on two orders of clothing and shoes. After seeing she had been charged international transaction fees of $17.18, researching the site and realising she had potentially been scammed, she lodged a dispute with PayPal requesting a refund. She said she had included 'extensive documentation' including evidence of what she believed were 'fake' tracking numbers. In two separate emails seen by Guardian Australia, Maison Canberra claimed her orders were 'on the way' but sent tracking numbers beginning with 'UK'. Australia Post declined to comment on whether they were valid. Guardian Australia looked up the tracking numbers on three third-party parcel-tracking platforms, all of which said the orders had been processed by a logistics company in China but had not progressed any further. Consumer experts have said Shopify and Meta need to take more responsibility for enabling these sites and allowing them to run false advertising but that payment platforms including PayPal also play a role by allowing these sites to use their services. The Geelong customer said PayPal had denied her claim on 29 April and told her tracking information provided by the seller showed that the items had been delivered. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion The woman filed a formal complaint with PayPal on 11 May. But she said she hadn't receive a refund until 26 May, the day after she told PayPal she would escalate the issue to the Australian Financial Complaints Authority. She said PayPal maintained she had received items from the seller and that her refund had only been granted because they were 'not as described'. The customer said she was 'appalled by this misrepresentation'. 'I strongly believe consumers deserve better protection, and someone must be held accountable,' she said. 'It's so distressing and so disappointing and frustrating.' She said PayPal should have a dedicated fraud or scam category in its claims process to help scam victims seeking redress. PayPal previously said all Australian sellers were verified when applying for an account, before conceding that this may not be the case for online sellers based in countries with different laws and regulations. A PayPal spokesperson said the safety and security of customers was its 'top priority' and it invested 'significant resources' into protecting them. 'Under PayPal's buyer protection policy, we will refund the full purchase price plus the original shipping charges for eligible claims,' they said. The Australian Financial Complaints Authority declined to comment, saying it could not disclose information about individual complaints. The Australian Competition and Consumer Commission, which has previously said it is investigating ghost stores, declined to comment.
