ACCC warns on rise of ghost stores in Australia

Online retailers mislead consumers with false local business claims

ACCC warns on rise of ghost stores in Australia

Cyber

By Roxanne Libatique

The Australian Competition and Consumer Commission (ACCC) has issued public warnings about a group of online retailers alleged to be falsely presenting themselves as local Australian businesses.

The sites in question – everly-melbourne.com, willowandgrace-adelaide.com, sophie-claire.com, and doublebayboutique.com – are said to be operating from overseas while marketing themselves as local outlets facing imminent closure.

According to the ACCC, these businesses are not located in the cities referenced in their names, nor are they winding down operations as advertised.

“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,” said ACCC deputy chair Catriona Lowe.

Lowe added that the products received by consumers often do not match the quality described online.

Growing number of consumer reports

The regulatory action follows a notable increase in complaints from consumers regarding online retailers using deceptive tactics.

Since January 2025, the ACCC has received more than 350 reports involving approximately 60 online stores.

The commission believes the actual number of such sites may be higher, as media coverage suggests many more may be operating under similar pretences.

The ACCC has also received reports of consumers being denied refunds, offered only partial compensation, or receiving no response to complaints about product quality.

These online stores frequently use social media platforms to target Australian shoppers and may change names or rebrand to avoid detection, often adopting the names of Australian suburbs or cities to appear legitimate.

How ghost stores operate

Ghost stores typically use marketing strategies that appeal to consumers’ desire to support local businesses. These sites often claim to be small, independent retailers forced to close due to financial hardship and promote time-limited clearance sales with significant discounts.

The ACCC noted that while these websites may resemble legitimate online stores, customers often report receiving products that are mass-produced, do not match the advertised descriptions, and are sold at inflated prices.

Some of these stores use names similar to established local businesses, which can cause confusion and potential harm to legitimate retailers.

The ACCC has identified that many of these sites rely on paid advertising on platforms such as Facebook and Instagram and frequently use the Shopify platform to operate their online storefronts.

Platform accountability and public awareness

The ACCC has contacted Meta Platforms, which owns Facebook and Instagram, as well as Shopify, requesting that they review and act against operators of ghost stores.

The commission aims to raise awareness among consumers and help them identify and avoid misleading online businesses.

Indicators of a ghost store

The ACCC has outlined several warning signs that may indicate an online retailer is a ghost store:

  • The business name or website includes an Australian location, but the domain ends in “.com” rather than “.com.au.”
  • The site features a narrative about imminent closure, often with emotional appeals.
  • Images of owners or staff may be AI-generated.
  • Return policies require goods to be sent to overseas addresses, despite claims of local operations.
  • Contact information is limited to an email address or web form, with no phone number or physical address.
  • Legal policies reference international rather than Australian laws.
  • The website does not display an ABN or ACN.
  • Independent review sites show negative feedback, while the business’s own site features only positive reviews.
  • Social media pages are newly created and may have negative reactions.
  • Product images may be sourced from other sites and listed at higher prices.

Steps for consumers and industry

The ACCC recommends verifying business names through the Australian Business Register and using reverse image searches to check product photos.

Consumers are also encouraged to consult local business directories and independent review platforms before making purchases. Relying solely on website reviews is discouraged.

If a consumer suspects they have purchased from a ghost store, the ACCC advises contacting their bank or payment provider to attempt to reverse the transaction.

Complaints can also be lodged with social media platforms, Google, the ACCC, or ScamWatch, and negative reviews can be posted on independent sites.

This warning follows recent alerts from the ACCC and the National Anti-Scam Centre regarding scams involving caller ID spoofing and impersonation of ACCC staff. The commission clarified that it does not request sensitive information through unsolicited communications and encourages consumers to verify any suspicious contact directly.

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