ACCC warns AI-powered ‘ghost’ stores make it harder to spot fake businesses online

The ACCC has issued a fresh warning about ‘ghost’ stores — online stores that pretend to be local Australian businesses but are often based overseas and drop-ship low-quality products. Last year, the consumer watchdog cracked down on four such stores, warning shoppers to steer clear of businesses allegedly misleading consumers about their location.

Now, the ACCC says the rise of AI tools is making the problem worse. “The rise of AI tools is making it easier for scammers to create convincing fake websites, advertisements, images and content that appears professional and legitimate,” an ACCC spokesperson told SmartCompany.

The spokesperson said AI can quickly generate professional-looking online stores, product images, customer reviews and marketing material, making it harder for consumers to distinguish genuine businesses from scammers or dodgy operators. “Consumers can no longer rely on appearance alone when deciding whether a business is legitimate,” they added.

The ACCC recommends that shoppers independently verify a business before making a purchase. It advises looking for genuine contact details, checking independent reviews, and searching for the business name alongside the word ‘scam’. If a business claims to be Australian, consumers can verify its details through official sources such as the Australian Business Register.

Why This Matters

Consumers face greater risk of being scammed by fake stores that look professional due to AI-generated content.
Legitimate Australian businesses may suffer reputational damage and lost sales when their brand is impersonated.
The problem is likely to grow as generative AI becomes cheaper and easier to access, putting pressure on regulators to adapt.

Background

Ghost stores are fraudulent online shops that impersonate legitimate Australian businesses, often operating from overseas and selling low-quality or counterfeit products. The ACCC has taken action against such sites in the past, targeting four stores last year. Now, the regulator warns that AI is lowering the cost and skill barrier for scammers, enabling them to produce fake websites, imagery and reviews that look authentic.

Key Perspectives

ACCC (consumer regulator): Emphasises that consumers must independently verify businesses and that appearance is no longer a reliable indicator of legitimacy. The watchdog encourages use of official registers and scam-specific search terms. Consumers: Face a more challenging online shopping environment where fake stores are harder to spot. They must adopt new verification habits to avoid financial loss. Legitimate businesses: Risk having their name and reputation exploited by ghost stores, which may erode customer trust and divert sales.

What to Watch

Further ACCC enforcement actions against specific ghost stores using AI.
Potential calls for stricter verification requirements for online retailers, such as mandatory Australian Business Register checks.
Broader regulatory responses to AI-generated commercial deception, both domestically and internationally.

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