Fake retailers are damaging e-Commerce. Here’s how to push back.

Marko Maras, CEO of Trustfull, shares his insights on how consumers and e-commerce platforms can fight back against the rising tide of fraudulent online businesses.

E-commerce has a counterfeit problem, and it’s not just about the products.

Both online shoppers and e-commerce platforms are finding it increasingly difficult to detect fake online sellers posing as legitimate businesses.

Last year, it was reported that more than 800,000 people in Europe and the US were duped into sharing card details and other sensitive personal data with a vast network of fake online designer shops apparently operated out of China.

In another recent scam, fraudsters used AI-generated images to craft a compelling story around how various Milanese boutiques had to close down and sell all of their available stock at a heavily discounted price.

In reality, the fraudsters were simply reselling low-cost clothing, readily available elsewhere on the internet for $10 or less.

With criminals increasingly luring shoppers into parting with substantial sums of cash, the question is no longer if this will continue, but what’s enabling it, and why these schemes are spreading so rapidly.

Why fake businesses are flourishing

Between 2022 and 2023 there was a 150% increase in fraud related to fake businesses and this surge is due to a variety of factors. For starters, it’s now easier than ever to look like a legitimate company online.

Thanks to the rapid advancement in digital tools, the barriers to creating a polished and professional presence have all but disappeared. Modern website builders offer pre-designed templates, drag-and-drop functionalities and seamless integration with e-commerce tools, enabling anyone with an internet connection to create a legitimate-looking website in minutes.

Meanwhile, fraudsters are using gen AI tools to create fake product photos, compelling brand stories and convincing customer reviews to build false credibility and drive quick purchases.

Beyond the technology, an entire underground ecosystem now exists to support fake online sellers. Various Telegram groups and dark web vendors now offer ‘business-in-a-box’ kits. These can include everything from fake incorporation documents and disposable phone numbers to fake social media followers.

Another contributing factor is the shift in consumer habits. The globalisation in e-commerce means consumers are now comfortable ordering products online, even from distant countries, as long as the product looks right and the price is low.

This problem is not going away anytime soon, instead it's growing on an industrial scale. It’s time for consumers to become more aware of the risks related to fake online businesses and common deceptive seller tactics.

Additionally, e-commerce platforms need to take a proactive approach to clamping down on fake digital storefronts operating on their sites.

Top online fraud prevention tips

With online scams becoming more sophisticated, consumers need to be just as savvy as fraudsters. Fortunately, there are simple, effective steps for spotting fake businesses online, and most of them don’t require more than a few clicks.

Firstly, consumers should be on the lookout for key digital storefront red flags, by checking the presence - or absence - of the business on social media platforms.

Any legitimate business will likely maintain some form of consistency across their socials, so consumers should look for active and verifiable accounts across Instagram, Facebook and TikTok, and pay attention to when accounts were created and the quality of their posts.

Secondly, simply googling a business before buying a product will show if there’s a registered business address and a history of customer reviews. Checking Google My Business and closely examining reviews on platforms like Trustpilot often helps identify if you're dealing with a scammer ecommerce website.

Additionally, it’s advisable to look for pictures that verify seller legitimacy. Whether it’s StreetView images of the brick & mortar shop’s alleged address or official pictures of the registered address for the online shop, this step can quickly unmask a fraudulent business. If a business claims to operate from a specific location but there’s no visual evidence to support it, or it’s actually an empty lot or registered to another business, then that’s a strong reason to be skeptical.

You can also look at the advertising activity tied to the business’s domain. In Europe, ad transparency tools from companies like Meta and Google allow anyone to view active and historical ads from verified advertisers. If a supposed business is running no ads at all - or their ads link to suspicious pages which until recently were selling something completely different - it’s likely a scam.

Finally, if a deal seems too good to be true, such as luxury items at cheap prices, consumers can try a reverse image search. Scammers often use stolen product images. If the same picture appears across unrelated websites or suspicious listings, it’s likely that you’re dealing with a fake business.

How fraudsters bypass KYB checks on e-commerce platforms

While many of these retail scams will happen on fraudsters’ own websites, some also exploit reputable e-commerce and peer-to peer (P2P) platforms.

Recent research showed a notable increase in social media marketplace scams targeting 18–34-year-olds, with a quarter (25%) reporting encounters with fake profiles advertising non-existent goods in the past 12 months. Once fake businesses are approved as vendors on these platforms, it’s much easier for them to look legitimate and scam more people. And while e-commerce platforms typically perform Know Your Business (KYB) checks on their vendors and merchants, relying solely on traditional methods - such as company registry lookups - can fail to detect businesses that exist only on paper.

The reality is that e-commerce KYB practices are not designed to stop fraud, and often miss the key warning signs of fake or malicious businesses. Key red flags, such as a lack of digital footprint or inconsistencies in online presence, fall outside the scope of traditional KYB processes but can be easily spotted by performing deep online due diligence through automated tools.

Preventing fraud before checkout with deep online due diligence

With the rise of global fraud networks, consumers must be more vigilant than ever, even if they’re shopping on a well-respected e-commerce site. At the same time, e-commerce and P2P platforms must rethink how they look at a business’s validity and risk exposure. This is essential for restoring trust in e-commerce and ensuring ongoing online shopper protection.

Instead of relying solely on static KYB records, it’s now possible for e-commerce platforms to easily analyse the digital footprint of any business globally.

While website metadata can expose newly registered domains or registrants in unexpected locations, a holistic analysis of digital ads, online reviews, website structures and linked profiles on external platforms is also key to unmasking fake businesses. These advanced solutions, now increasingly powered by AI agents, gather real-time insights into a company's online activity, reputation, and authenticity in seconds.

By analysing these risk signals for fake merchants, e-commerce platforms can instantly identify red flags that show fraudsters might be at work, allowing them to intervene before allowing a business to sell goods on their platform.

In the meantime, consumers can’t afford to let their guard down either. Underneath the glossy storefronts and sleek product images, there are often glaring gaps: no real digital footprint, no verifiable online presence and no meaningful history.

From domain ownership to connected social accounts and search engine visibility, real businesses leave real trails. Fake ones don’t.

About Trustfull

Building the Future of Fraud Prevention.

In today’s digital-first world, traditional defenses can't keep up with sophisticated fraud tactics. Trustfull was created to empower businesses with cutting-edge, OSINT-based fraud prevention solutions to build trust globally.

Trustfull is a leading cloud-based digital footprint analysis platform, providing instant access to hundreds of digital signals and ML-powered customer scoring, with a single API.

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