Toronto boutique owner Julie Skirving was confused when she got flooded with complaints from online customers who received poor quality items or didn’t get their orders at all.
Over five hundred and forty people came to her with one common thread: they had seen a sponsored ad on Facebook and ordered from a site called “Logan Toronto.” Skirving’s store is called “Logan and Finley.”
“What I experienced was a lot of people calling, a lot of people stopping by, a lot of people emailing,” Skirving said.
“I have been in business for almost 13 years and when you type ‘Logan’ in Toronto, my store comes up,” said Skirving. “Then I did a little digging and realized that there was what I thought looked like a scam.”
Another website that once led customers to make purchases from “Logan Toronto” is no longer online, instead redirecting to a Shopify page which reads “This store does not exist.” CBC was unable to find any contact details connected to the storefront and Shopify could not be reached for comment.
CBC found dozens of similar Facebook ads and pages announcing an independent fashion retailer is closing, often with a photo of the store or its owners that appeared to be generated by artificial intelligence.
The posts give a backstory for why the store is closing and a link to a site offering steep discounts on what looks like high-end merchandise. For example, a dress on the website for “Laurel Toronto” was marked down from $260 to $69.95 – a discount of almost 75 per cent. The website laureltoronto.com is also no longer active.
After ordering from these online stores, users have posted their negative experiences on Facebook and Reddit — saying the clothing quality was cheap and not as pictured on the website, or they never received their package at all.
When contacting the stores by e-mail to make a return, the store will offer a small refund to keep the items, or ask the customer to pay a return fee.
Joanna Gordon was shocked when she started coming across retail sites through Facebook that looked similar to the website for her store, Resonance, in Stratford, Ont.
“I think they’re using AI to build their entire site. A lot of the scam stores that I looked at had pretty much the same copy everywhere. They just changed the location a little bit,” she said. “The description of the store was virtually the same. And the ads had the same sob story that they can’t compete with the big online stores.”
The Canadian Anti-Fraud Centre (CAFC) called the online retail websites “extremely concerning.”
“It is absolutely a fraud. It’s deceptive marketing,” said Jeff Horncastle, outreach officer with the CAFC.
“Fraudsters know that we’re spending a lot of time on social media and naturally they know that we’re trying to save a bit of money where we can.”
The Canadian Federation Of Independent Business (CFIB) said there is growing concern around fraud and cybersecurity for retailers and consumers. In 2022, they found 45 per cent of small business owners reported that they were targets of random attacks.
“Over time, what we’ve seen is that things are getting much more sophisticated. Certainly I think AI is probably playing a role in that,” said Ryan Mallough, vice president, communications and legislative affairs at CFIB.
Concerned buyers should contact their credit card companies and monitor statements, he said.
“In any time where your information didn’t go to where you were expecting that it would, it’s always good to give your credit card company a call,” Mallough said.
Anyone who bought from the websites should report them to the CAFC to support possible investigations, Horncastle said.
