The Australian Competition and Consumer Commission warns against deceptive foreign 'ghost stores' claiming to be high quality local retailers that are 'closing down'
The Australian Competition and Consumer Commission issued public warning notices about four online wesbites that portray themselves as local high-end fashion businesses that are closing down.
Instead, the companies are based overseas, not closing down and are drop-shipping low quality products, according to the ACCC.
Drop-shipping is a practice where a retailer acts as a middleman between a customer and the supplier to sell the item.
The drop-shipper provides the order and shipping details to the supplier who transports the item to the buyer.
The four websites the consumer watchdog warned Aussies about are everly-melbourne.com, willowandgrace-adelaide.com, sophie-claire.com and doublebayboutique.com.
ACCC Deputy Chair Cartiona Lowe said the names of these websites were deliberately designed to mislead consumers into believing the stores were Australian.
'We are warning Australians about the risks of engaging with these four websites specifically, which we allege are not based in Melbourne, Adelaide or Double Bay, nor are they imminently closing down,' Ms Lowe said.
'We further allege that the operators of these websites are supplying products which are not of the advertised quality.'
Ghost stores often use names similar to existing retailers and buy paid advertisements on social media sites to boost their presence.
The prevalence of ghost stores extends greatly beyond these four sites mentioned by the watchdog, the ACCC warned.
It said the conduct appears to be widespread and stressed the need for caution when online shopping.
'We urge all Australians to think twice before clicking on ads they see on social media which claim to be from a boutique business based in a local town or city,' Ms Lowe said.
'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.
'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.'
Both Meta, the parent company of Facebook and Instagram, and e-commerce platform Shopify have been contacted by the ACCC to crack down on the ghost stores.
The consumer watchdog said shoppers should be wary of websites claiming to be located in Australia despite not having a '.com.au' domain.
It also cautioned about fake backstories, the use of AI generated images or listed return addresses outside of Australia.
Shoppers should also be wary of sites without a contact phone number or physical address for the store.
Online retailers that do not provide an ABN or ACN, have a litany of negative online reviews or refer to international laws for the website's privacy policy or terms of service should also be approached with caution.
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