So-called “ghost store” operators are taking advantage of Christmas and Black Friday to lure shoppers to their websites, as the consumer regulator warns Australians that artificial intelligence is making it even harder to identify deceptive retailers.
The Australian Competition and Consumer Commission (ACCC) considers ghost stores – which falsely market themselves as local brands – to be “scam adjacent”, as some send imitation products from overseas and others fail to deliver anything at all.
Guardian Australia has identified several new examples of ghost stores claiming to offer Black Friday discounts on a variety of products, including jewellery, makeup and children’s toys.
Even though the Facebook owner Meta and the e-commerce platform Shopify have been aware of the broader problem for months, ghost stores not only continue to be set up and run fictitious advertising but are escalating their methods.
In one example, the online makeup retailer Legacare, which is running ads on Meta platforms for a Black Friday sale, claims to have developed a “line of products” from its headquarters in Queensland. It sells a “Biomimic” foundation for mature skin, which it says is the favourite of “42,000+ Happy Women”.
One of the Legacare ads includes an image which appears to be a screenshot of an Australian Women’s Weekly article headlined: “This Australian brand is outselling Sephora bestsellers.”
But the article doesn’t exist.
A spokesperson for Women’s Weekly owner Are Media said the image was not an authentic article and appeared to be an “unauthorised and fabricated” use of its brand to mislead consumers.
“We take the misuse of our brands very seriously,” they said. “We encourage global tech platforms to take stronger steps to prevent fraudulent or deceptive advertising such as this.”
Legacare is not registered in Australia, nor does it have an Australian business number (ABN), according to searches of official records. Its domain name was registered less than one year ago.
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The ACCC wrote to Meta and Shopify in July, urging the tech companies to scrutinise this type of activity more closely and take action against the operators.
In September, Meta announced plans to expand its anti-scam efforts in the Asia-Pacific region.
The company continues to use AI to assess user reports of scams, which are not always reviewed by a human.
When Guardian Australia visited the Legacare website last week, it introduced its “founder” with the text “Hi, I’m Ruby!” next to an image of a smiling blond woman holding a bottle of foundation.
The image appeared to be AI-generated and its URL showed it was created by the Replo content delivery network, which allows users to build Shopify pages with artificial intelligence.
Legacare’s website contained a disclaimer that said it would help customers…
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