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New York Post
03-07-2025
- Business
- New York Post
Australia issues major warning to locals over ‘ghost stores' scam posing as 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. Advertisement 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 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. Advertisement 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. 3 also had a 'closing sale,' telling customers that due to financial reasons they can no longer stay open. Advertisement 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. Advertisement 3 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.'
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.
