Time to read : 5 Minutes
Shopping on our devices, often from the couch, has become one of Australia’s favourite pastimes – it’s cheap, convenient… but increasingly dangerous.
The combination of Aussies tending to buy online, having trust in others, and our loose laws all now see us as being easy targets by overseas scammers.
And the ACCC has just issued a warning about the latest, highly convincing tactic: the so-called ghost store (also known as phantom store).
What is a ghost store?
‘Ghost store’ is the term for sites that misrepresent themselves as local Australian businesses… usually offering enticingly high savings.
Far from being the genuine online stores of authentic brands, they are phantom sites that mask criminal outfits aiming to charge you money for nothing in return. Or worse, gaining access to your accounts or investments.
There are currently reports of four websites fraudulently claiming to be in Melbourne, Adelaide and Sydney, with fears there are more lurking in plain sight.
Often selling fashion, they are typically located in China or other countries that have a very large textile base, like India, Pakistan or Bangladesh.
These sites look the real deal. They commonly use fake ‘provenance’ to give the impression their goods are authentic, making it easier to peddle. For example, they may say Italian shoes or that it’s a French-made product.
And this could be accompanied with claims of quality, such as “Italian leather” or “French cashmere”.
They'll also often ‘back up’ the (fake) authenticity using storytelling. If you go to the ‘about us’ section, there might be a long story about how the business has been in the family for 50 or 60 years. Yes… 60 years. There could even be an AI-generated image of the so-called ‘family’.
Or they could have made up a touching story about their humble beginnings with the business starting in the garage of the family home.
One big giveaway you’re dealing with a ghost store is that they're just about always ‘closing down’ or ‘relocating’, which leads to the massive savings that you can make by buying ‘now’.
Here are some other red flags that can stop them plunging you into the red.
How do you know it's a ghost store?
These are some key characteristics for identifying fake online stores that target Aussie consumers… and once you know the warning signs to look for, it’s relatively easy to steer clear of them:
Location deception
This is a major red flag to look for. Scammers often use Australian city names in their brand or domain to appear local. In reality, they have no actual physical presence here.
Use Google Maps to verify their address. If you can’t find a real address that’s a big giveaway.
Missing contact details
Legitimate businesses want customers to reach them easily, so they'll have phone numbers, proper business addresses and multiple contact methods. If there's only a contact form or generic email, that could be highly suspicious.
No Australian Business Number (ABN)
Not having an ABN is particularly telling for Australian businesses, since most legitimate operations need one.
The ABN Lookup tool on the official government business register is a great place you can verify this. Add it to your favourites – especially if you get tempted with online sales that pop up.
Scamwatch checks are also a smart thing to do – the ACCC's Scamwatch database can reveal if others have already reported a particular site or brand.
Be aware: the Scamwatch website carries the following warning at the moment: “We've had reports of scammers using ACCC phone numbers to contact members of the public. They do this to steal personal information. The ACCC does not make calls from our reception numbers. If you receive a call claiming to be from the ACCC asking for personal information, do not provide this information and hang up. This issue is being investigated.”
Sales that are too-good-to-be true
These sites often steal product images and descriptions from real retailers, then offer suspiciously deep discounts to lure people in. And yes, there may be another elaborate and plausible story here about the business, sadly, having to close.
You might even get pop-up ads about ‘closing down’ with urgency thrown in ‘hurry, don’t miss out’ . One way to combat this is to always navigate to a site from your own browser, rather than clicking on any link provided in an ad, social media post, message or email.
If it’s a well-known brand and the official website has no such sale or closing down information, your due diligence has just paid off.
A lack of complaint handling
These sites rarely have any complaint handling or customer service support. This could be one of the few site-signals you need to look for to know it’s actually a front for fraudsters.
A web address that doesn’t feature ‘s’
It may be one small letter but the ‘s’ in the first part of the URL is vital. The web address should be ‘https’, the ‘s’ stands for secure.
And watch out, too, for payment methods that don't offer buyer protection. Steer clear of requests for direct money transfer, payment in gift cards or via cryptocurrency platforms. Paypal and its like should be safest.
No independent reviews
Check that the site – the official one – rates highly on independent review sites, as those on the site itself could well be fake.
Two reputable sites to check reviews are Product Reviews and Trust Pilot. Check them out and add to your favourites too.
Unprofessional presentation
Traditionally, poor design, grammatical errors and spelling mistakes were giveaways of everything from the Nigerian scam emails to fake charities.
Sadly, the rise of AI has largely removed many of these clues... so you need to be hyper vigilant for the above scam signs.
Bottom line
Scam sites pose dangers… from goods that never arrive to forking out money for inferior quality products, to opening the online ‘door’ to a remote-access scam.
I recently advocated for a highly distressed woman who had bought what she thought was a cheap iPad from a Facebook ad, whose computer later went blank with a “Microsoft error”.
She was called by a ‘helpful Microsoft staffer’ who gave her some instructions on how to fix her computer and advised her not to turn it off.
With automatic log-ins to bank accounts enabled on that computer, in a short time, the fraudsters were able to steal almost $100,000. Her life savings gone.
If you’ve been conned, your first port of call should be your bank, to try and get the payment stopped. That bank should contact the recipient back to try and get it reversed, if it has already been processed.
But, the money is withdrawn very quickly from what are often ‘mule’ accounts owned by locals to which the fraudsters pay a small fee/bribe.
If that’s the case, it’s a matter of complaining to the banks and escalating your complaint to the Australian Financial Complaints Authority (AFCA) – if you’re not satisfied. Its jurisdiction is expanding in scam complaints to include banks (even if you are not a customer of that bank).
Finally, report the con to Scamwatch. It’s the only way to protect as many people as possible from the same financially harmful – and distressing – fate.
Go deeper:
Do you know how to protect your money from data breach scams?
How can you identify real estate scams before it’s too late?
Financial disclaimer
The information contained on this web page is provided by Compare Club Australia Pty Ltd, authorised representative of Alternative Media AFSL number 486326. It is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should consider whether the advice is right for you and refer to the Product Disclosure Statement before making a decision in relation to a financial product.
