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An image of ‘Molly and Peter Smith’ outside a closing down sale, which appears on the Molly-Smith online store. The website says the company has a store in Sydney but no such store exists. | Source: The Guardian
An image of ‘Molly and Peter Smith’ outside a closing down sale, which appears on the Molly-Smith online store. The website says the company has a store in Sydney but no such store exists. | Source: The Guardian

Digital retail fraud: Concerning trend highlighted in special report

A special report has documented increasing concern around ‘ghost stores’ targeting Australian consumers with misleading and deceptive advertising.

The Guardian recently published a report suggesting that more than 140 ghost stores have been identified, with these businesses falsely marketing themselves as Australian.

The Australian Competition and Consumer Commission (ACCC) is investigating this concerning trend after a spike in complaints.

Guardian Australia, aided by consumer experts, has tracked more than 140 online ghost stores, all of which pretend to be local businesses and are often accompanied by a fictitious story telling consumers they are closing down and must get rid of stock,” writes Catie McLeod.

"The analysis shows that the number of misleading sites, and threats to Australian consumers, is far more prevalent than previously known."

“The analysis shows that the number of misleading sites, and threats to Australian consumers, is far more prevalent than previously known.”

The report continues: “The majority of the identified ghost stores – based on analysis by Guardian Australia, evidence from customers, and a running list of sites compiled by the Scam Alerts Australia Facebook group – have been built using the Shopify e-commerce platform.”

Consumer Policy Research Centre’s Erin Turner said online platforms must do more to prevent these businesses from reaching Australian consumers.

“Platforms like Shopify and Instagram are making money as these ghost stores pay for advertising and support,” she said.

“We should call this what it is: digital retail fraud. Without coordinated action from digital platforms and regulators, these fraudsters will keep gaming the system.”

Jeweller’s 2024 State of the Industry Report noted the increasing influence of retailers operating without a traditional storefront, which included ‘showroom’ jewellers.

 

WATCH VIDEO

 

More reading
Grey areas: Jewellers operating without a storefront
State of play in 2025: Australia’s Independent Jewellery Landscape
ACCC encourages retailers to review surcharge policy
Misleading advertising under the microscope
Industry watchdog takes aim at misleading advertising
Watchdog highlights fine print issues among retailers
Membership mystery: ABC Refinery & the Responsible Jewellery Council

 











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