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 “stay safe when shopping online” by warning them of “counterfeit ‘Legacare’ products and imitation listings appearing on third-party marketplaces”.
The ACCC has urged people to check if online retailers were genuine by doing reverse image searches of product photos to see if they had been taken from another site.
Using this method, Guardian Australia reviewed Amazon last week and found five almost identical products to Legacare’s which are also called “biomimic” foundations.
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These products had been available for sale since September 2024, well before the legacareofficial.com domain name was registered on 2 January.
Guardian Australia sent detailed questions to Legacare, including whether it was trying to ward off any customer concerns it was drop-shipping cheap products to Australian customers at an inflated price.
In an email, Legacare responded: “We are an Australian business, but we work with a trusted overseas supplier who also supplies some of the world’s best skincare brands.
“Our skincare is made with high-quality ingredients and formulated to deliver premium results. If you have any other questions, feel free to ask. We’re happy to help.”
Legacare did not respond to requests for its ABN.
Speaking generally, the ACCC deputy chair, Catriona Lowe, urged consumers to be sceptical about supposed discounts and said even some legitimate retailers were making false or misleading claims to lure in customers.
Lowe said the regulator would like to see all social media platforms taking further action in relation to scams.
“It’s enormously important that platforms are proactively seeking to track what’s occurring on their platforms as well as providing tools to consumers to report to them and get responses in a timely manner,” she said.
She said there was no question artificial intelligence could “help criminals make more realistic scams and make them more difficult to detect”.
Meta declined to comment on specific websites shown to it by Guardian Australia, but said ghost stores and fake ads were an “adversarial space where sophisticated groups often change tactics to stay ahead of detection”.
“We remove violating content when we become aware of it, and Meta encourages users to report pages or ads that appear to be misleading,” it said.
It said the company was committed to helping prevent scams and user reports about scam ads had declined by more than 50% in last 15 months.