June 26, 2026
mehaniq/Depositphotos.com
As AI-Backed Fake Retailers Pollute the Internet, What Are the Solutions?
Fraudulent business practices and the scam artists behind them may be nothing new in the world of commerce, but a new trend brought about by the advance of technology is: AI-created fake retailers and brands are proliferating across the web and social media, often leveraging consumers’ empathy and emotion to rope unsuspecting victims into a purchase.
Facebook and other similar social media platforms are rife with these sorts of fake retail operations, with Meta’s own late 2024 data suggesting that 10% of its total revenue was derived from scam ads (and Wall Street Journal data suggesting, as of mid-2025, that 70% of new ads on Meta platforms either promoted “scams, poor quality products or illicit goods,” per FOX 59).
In a more recent report issued by Forbes contributor Catherine Erdly, the latest iteration of dishonest retail practices spreading across the internet are so-called “ghost stores,” or e-comm businesses which use AI-created imagery, reviews, testimonials, and websites to misrepresent themselves as small businesses, often local. Erdly set the scene:
“Ready to focus on their new roles as grandparents, a couple shared a heartfelt message with customers as they close their boutique doors with one final sale: ‘It’s with a heavy heart that we share this message with you. After years of love and care poured into this little shop, it’s time for us to close,’” she began.
“At first glance, everything looks genuine. The emotional farewell. The photo of the owners. But on second glance, things don’t add up. Despite the title referencing a local town, the shipping details note that orders are dispatched from their warehouse in Central Asia. A closer look at the photo suggests the smoothness and uniformity of an AI-generated image,” she added.
World Cup scams are already spreading across Europe.
Bitdefender Labs found fake shops impersonating brands like Samsung, Nike, Adidas, ZARA, Amazon, and SHEIN.
Learn how to spot fake ads, fake jerseys, and suspicious shopping links:— Bitdefender (@Bitdefender) June 25, 2026
Fake Retail Scams Powered by AI on Social Media: A Problem Beyond Enforcement?
Other stats and leading perspectives pulled from Erdly’s report:
- Retailers and shoppers are involved in a “trust recession”: Data from Bazaarvoice indicates that ~97% of shoppers now check multiple sources before purchasing, with 60% needing between 2-3 sources before being satisfied and 37% requiring four or more.
- Prevalent or pervasive may be too weak of words to describe the scale: Chris Emmins of KwikChex suggested that such scams are “part of the world we live in now. [They are] absolutely everywhere.” Further, the technological environment — a combination of easy and free AI tools and some shoppers lacking advanced experience in detecting the use thereof — leads to exacerbation of these schemes and their impacts. “It’s just so darned easy and cheap to do these things. They now have AI on their side, which means that a website can go up within an hour,” Emmins said.
- Enforcement is difficult, if it’s possible at all: Curtailing ghost stores or AI-driven retail scams via legal means may be off the table, according to Emmins, who suggests that enforcement is similar to playing “a never-ending game of whack-a-mole.” “The scale is just too large. You have problems with jurisdiction because so many of these stores are based in China, and there are all sorts of issues like that as well,” he added.
This sort of disingenuous play on empathy or other emotions to drum up sales is a common tactic across the board, as ABC News reported.
“ABC News has identified dozens of videos on platforms like YouTube and TikTok where retailers used AI to generate videos showing fake craftspeople making their products. Expert analysis — paired with online detection tools — confirmed they were created with AI technology, and their websites were linked to generic holding companies or companies oversees,” the outlet wrote.
“Many of the videos prey on customers’ emotions by showing interactions that try to create sympathy by showing creators being picked on in public,” ABC News added.
BrainTrust
Mohamed Amer, PhD
Strategy Advisor, CEO & Co-Founder, BridgeCommAI
Neil Saunders
Managing Director, GlobalData
Anil Patel
Founder & CEO, HotWax Commerce
Recent Discussions
Discussion Questions
Do you believe social media platforms are doing enough, within their power, to prevent AI-driven fake retail ads from reaching shoppers? Why or why not?
What solutions would you offer, whether to legislators, platforms, or consumers, to curtail the impact and reach of these bad actors?
How can legitimate retailers and brands reinforce trust with shoppers within the context of a “trust recession” where skepticism is prevalent?
Poll
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Sadly, AI has facilitated a whole wave of fakery and slop – from retailers, to brands, to people using it to write content. This has made the traditional guideline of caveat emptor much more difficult to apply. Ultimately, consumers will adapt their behavior – shifting more purchases to reliable channels and platforms. That gives a huge advantage to the likes of Amazon and Walmart and traditional retailers, whose brands remain trusted and who generally police their marketplaces. But it is, of course, a great shame for genuine sellers who rely on other channels.
Let’s cut to the chase here: the only solution is going to come thru the platforms hosting this fraudulent activity getting off their rich dead a**es and policing it better (or policing it at all, since they seem to do very little at present, disingenuous protests notwithstanding)
But of course they have zero incentive to do so currently since they profit from it but have been pretty much absolved of all responsibility. I think the answer is simple: REPEAL SECTION 230…it’s not a solution, but it’s a damn good start!
REPEAL SECTION 230? How unAmerican!
Yes, I am being sarcastic.
If something seems too good to be true, it probably is, especially for unbelievable retail offers or screaming deals on brands rarely going on sale. Small businesses on Etsy, for example, operate without this issue since they are self-policed by shoppers and operational legitimacy, separating out the legit vs fakes. But with AI-driven fakes now on popular social media sites, we may be where if a small business wants to engage in online commerce, they must prove to be a verified operational entity via state registration or alternative green light status, i.e, the BBB. Hate to push this burden on sole entrepreneurs and start-ups, but can give authentic, small, and growing brands a chance, while helping consumers.
It’s only a matter of time before lawmakers step in to help curb an already bad situation. As an example, I recently received an email from a reputable retailer. It turned out to be fake. I wonder how many people fell for it? For now, and in the future, the customer must take the necessary steps to ensure they are responding to a legitimate promotion.
It’s going to take a unified effort to maintain customer confidence in the online retail world. I’ll be interested to see how brands deal with the trust issue that has nothing to do with their specific brand, but with retail in general.
Social media platforms aren’t failing to stop AI-driven scams. They’re profiting from them. When 10% of Meta’s revenue is attributable to fraudulent ads, the problem isn’t a moderation gap but a misaligned incentive structure. Platforms already possess AI capable of detecting synthetic imagery, fake reviews, and ghost storefronts. They deploy it selectively because the economics of inaction currently beat the economics of enforcement. The only mechanism that resets that calculus is liability: make platforms financially responsible for the fraud their ad systems facilitate, and detection investments follow.
Legitimate retailers are absorbing brand damage from a trust deficit they didn’t create. That externality belongs on the platforms that monetize it. Seller verification mandates and stripped safe harbor protections are the structural levers. Absent liability, platform “solutions” are theater with a business model behind the curtain.
I don’t know how much social media platforms can do to eliminate or even curtail the activity of fake retailers on their platforms. Technically, there may be some things they can do. If so, then they have to be ready, ethically, to forego whatever income they now derive from these nefarious actors. With the advent of the Internet and now Artificial Intelligence, society, like Pandora has literally opened the box that contains so many evils. It may have been mythology up to a few yers ago. Now, it’s reality. The question does not have an easy or ready answer.
AI-generated fake retailers are a reminder that eCommerce trust cannot depend only on how professional a website looks. Shoppers have been trained to associate clean design, reviews, social ads, and fast checkout with legitimacy, but AI now makes all of those signals easier to fake. That creates a much bigger education problem for the industry.
Retailers, marketplaces, payment providers, and social platforms all have a role to play, but customers also need clearer trust signals at the point of purchase. For retailers, the opportunity is to make legitimacy obvious.
A trusted brand should not make customers search for return policies, contact details, store locations, delivery timelines, or social proof. In an AI-driven environment, transparency becomes a competitive advantage, not just a compliance detail.
I love the headline…” As AI-Backed Fake Retailers Pollute the Internet, What Are the Solutions?” Of course, since the world of social media evolved, we would insert just about anything for “AI-Backed Fake Retailers”. Polluting the Internet didn’t start with AI.
The only way to stop it is with the platforms. If , 70% of new ads on Meta platforms either promoted “scams, poor quality products or illicit goods, it is not a secret to META. That is a lot of profits for the bottom line. I am sure they love this sh*t. And why not?
Just imagine the pushback the politicians would get from the platforms if they tried to step in.
AI is not the villain. It is a fantastic tool that I use regularly.
Seems like platform providers and others need to use AI to identify and remove fake stuff. Yes, consumers need to be cautious but good AI can be used to fight bad AI.
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Sadly, AI has facilitated a whole wave of fakery and slop – from retailers, to brands, to people using it to write content. This has made the traditional guideline of caveat emptor much more difficult to apply. Ultimately, consumers will adapt their behavior – shifting more purchases to reliable channels and platforms. That gives a huge advantage to the likes of Amazon and Walmart and traditional retailers, whose brands remain trusted and who generally police their marketplaces. But it is, of course, a great shame for genuine sellers who rely on other channels.
Let’s cut to the chase here: the only solution is going to come thru the platforms hosting this fraudulent activity getting off their rich dead a**es and policing it better (or policing it at all, since they seem to do very little at present, disingenuous protests notwithstanding)
But of course they have zero incentive to do so currently since they profit from it but have been pretty much absolved of all responsibility. I think the answer is simple: REPEAL SECTION 230…it’s not a solution, but it’s a damn good start!
REPEAL SECTION 230? How unAmerican!
Yes, I am being sarcastic.
If something seems too good to be true, it probably is, especially for unbelievable retail offers or screaming deals on brands rarely going on sale. Small businesses on Etsy, for example, operate without this issue since they are self-policed by shoppers and operational legitimacy, separating out the legit vs fakes. But with AI-driven fakes now on popular social media sites, we may be where if a small business wants to engage in online commerce, they must prove to be a verified operational entity via state registration or alternative green light status, i.e, the BBB. Hate to push this burden on sole entrepreneurs and start-ups, but can give authentic, small, and growing brands a chance, while helping consumers.
It’s only a matter of time before lawmakers step in to help curb an already bad situation. As an example, I recently received an email from a reputable retailer. It turned out to be fake. I wonder how many people fell for it? For now, and in the future, the customer must take the necessary steps to ensure they are responding to a legitimate promotion.
It’s going to take a unified effort to maintain customer confidence in the online retail world. I’ll be interested to see how brands deal with the trust issue that has nothing to do with their specific brand, but with retail in general.
Social media platforms aren’t failing to stop AI-driven scams. They’re profiting from them. When 10% of Meta’s revenue is attributable to fraudulent ads, the problem isn’t a moderation gap but a misaligned incentive structure. Platforms already possess AI capable of detecting synthetic imagery, fake reviews, and ghost storefronts. They deploy it selectively because the economics of inaction currently beat the economics of enforcement. The only mechanism that resets that calculus is liability: make platforms financially responsible for the fraud their ad systems facilitate, and detection investments follow.
Legitimate retailers are absorbing brand damage from a trust deficit they didn’t create. That externality belongs on the platforms that monetize it. Seller verification mandates and stripped safe harbor protections are the structural levers. Absent liability, platform “solutions” are theater with a business model behind the curtain.
I don’t know how much social media platforms can do to eliminate or even curtail the activity of fake retailers on their platforms. Technically, there may be some things they can do. If so, then they have to be ready, ethically, to forego whatever income they now derive from these nefarious actors. With the advent of the Internet and now Artificial Intelligence, society, like Pandora has literally opened the box that contains so many evils. It may have been mythology up to a few yers ago. Now, it’s reality. The question does not have an easy or ready answer.
AI-generated fake retailers are a reminder that eCommerce trust cannot depend only on how professional a website looks. Shoppers have been trained to associate clean design, reviews, social ads, and fast checkout with legitimacy, but AI now makes all of those signals easier to fake. That creates a much bigger education problem for the industry.
Retailers, marketplaces, payment providers, and social platforms all have a role to play, but customers also need clearer trust signals at the point of purchase. For retailers, the opportunity is to make legitimacy obvious.
A trusted brand should not make customers search for return policies, contact details, store locations, delivery timelines, or social proof. In an AI-driven environment, transparency becomes a competitive advantage, not just a compliance detail.
I love the headline…” As AI-Backed Fake Retailers Pollute the Internet, What Are the Solutions?” Of course, since the world of social media evolved, we would insert just about anything for “AI-Backed Fake Retailers”. Polluting the Internet didn’t start with AI.
The only way to stop it is with the platforms. If , 70% of new ads on Meta platforms either promoted “scams, poor quality products or illicit goods, it is not a secret to META. That is a lot of profits for the bottom line. I am sure they love this sh*t. And why not?
Just imagine the pushback the politicians would get from the platforms if they tried to step in.
AI is not the villain. It is a fantastic tool that I use regularly.
Seems like platform providers and others need to use AI to identify and remove fake stuff. Yes, consumers need to be cautious but good AI can be used to fight bad AI.