‘Ghost stores’, otherwise known as scam shops, are online retailers that make false misrepresentations about being Australian businesses. These websites tend to feature fake closing down sales and tend to be dropping shipping businesses.
The ACCC has issued a warning about the specific conduct of our websites: everly-melbourne.com, willowandgrace-adelaide.com, sophie-claire.com and doublebayboutique.com. Deputy chair Catriona Lowe said that all consumers need to be vigilant when shopping online.
“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,” Lowe said.
“We further allege that the operators of these websites are supplying products which are not of the advertised quality.”
She added: “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.”
The consumer watchdog estimates it has received at least 360 reports about 60 online retailers this year. Complaints associated with these online retailers include refusing to provide refunds, offering only partial refunds, and inferior product quality compared to what is advertised.
The ACCC acknowledged that beyond the examples provided, there are many more websites of this kind in operation.
“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,” Lowe explained.
“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.”
The ACCC has contacted Facebook, Instagram, and Shopify regarding the conduct of these websites.
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