(NEW YORK) — Visual investigation: Scores of online resellers are using AI to fool customers by pretending to be mom-and-pop stores
Scores of online companies are increasingly turning to generative AI technology to deceive consumers, falsely portraying themselves as struggling small businesses to charge a premium for lower quality products, an ABC News visual investigation found.
ABC News has identified dozens of similar online retailers — selling everything from clothing to jewelry to lamps — that used AI images and videos to portray themselves as down-on-their-luck craftsmen or small business owners in need of support.
These kinds of sites have proliferated online and take advantage of consumer trends. Experts warn that by the time others leave reviews or complain about the misleading claims, the sites often go offline or move on to selling another product.
“You can use AI to create very realistic media, right? So you can take and create photos of people who look like someone who might be making handmade goods,” said Marshini Chetty, an associate professor of computer science at the University of Chicago. “You can create reviews at scale. You can create testimonials. And then even when you generate these sites, they already use these kind of manipulative tactics.”
According to Denny Svehla, a musician from Rockford, Illinois, the ad he saw for a retiring craftsman selling flat caps appeared completely normal at first.
“I’ve been making flat caps and newsboy caps by hand since 1973. Closing the workshop next Wednesday and I’ll be honest, I’ve still got way more inventory than I know what to do with — just needs to go,” one slickly produced ad said. “Every cap on that shelf has hours of my work in it — real materials, hand finished, built to outlast the man wearing them. 53 years and not one shortcut.”
For Svehla — a Neil Diamond tribute artist who runs a small business with his wife — the story felt personal, and he wanted to help.
“I get the pressure, so I thought, ‘Man, I am going to buy a cap,'” Svehla told ABC News. “I even gave him a tip.”
According to Svehla, he first became suspicious about the purchase when he got an update showing that the “handmade” hats he bought were being shipped from mainland China. When the hats eventually arrived, he said he was disappointed at their quality and even more annoyed at the deception.
“I’m sitting there thinking I’m trying to help someone,” Svehla said. “He’s going to end up going out of business after 52 years. I’ve been in business for 50 years myself, and I’m looking at, you know, what am I going to do if I can’t go anymore?”
Unbeknownst to Svehla, the website that sold him the hats is one example of a growing trend of sites that use generative AI technology to portray themselves as struggling small businesses. At least three similar sites — George’s Caps, Henry’s Caps, and Walter’s Caps — offered similar pitches to consumers, claiming they are retiring after decades in business and need to offload their inventory.
A representative of George’s Caps, when reached by ABC News, did not address questions regarding whether George is a real person or if claims regarding his retirement are fabricated. They touted the quality of the products they sell, saying, “We are actually well aware that there are some genuinely poor operators in this space. We hear about them directly from our own happy customers who have tried competitors and been disappointed before finding us.” The representative said, “I would also challenge the assumption that foreign made goods are automatically inferior. What matters is the quality standard being maintained and the commitment to the customer.”
Other sites use AI to make emotional appeals. One purportedly New York-based clothing retailer shared an AI-generated image of their damaged storefront — with shattered glass and police tape — to announce their “big sale.”
“Our store has been completely destroyed and after years of love and dedication to our business, we see no other way out. As if we hadn’t fought enough against the big giants with their huge budgets, this has dealt us the final blow,” the ad claimed.
But that store didn’t list an address in New York, and online detection tools suggested the image was made entirely with artificial intelligence.
Another site claimed to be a New York-based lamp company that was closing after two decades in business and now offering customers a massive discount on their remaining inventory.
“It’s not easy to close the doors of something that’s been part of your soul. But the time has come. Aluné, our beloved lamp boutique in New York, is packing up for the very last time,” their post said, showing an image of a middle-aged man and woman laying out their lamps on a sidewalk.
But after weeks online, the site has since been removed, and multiple experts said that the site’s advertising was generated with AI. When ABC News visited their address on one of New York’s priciest streets — between retailers for Chanel and Versace — there was no trace of the company or evidence that it ever existed.
None of these businesses responded to a request for comment from ABC News.
According to Chetty, massive advances in AI technology has made it easier to quickly create convincing sites that can fool even the savviest online shoppers.
“People can do this at scale, create these images, create these websites, put them up quickly, take them down quickly,” she said.
And Chetty noted that those kinds of sites can thrive on social media, where consumers are often distracted and more likely to make a quick purchase. 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.
None of the other retailers who were contacted by ABC News responded to a request for comment.
Many of the videos prey on customers’ emotions by showing interactions that try to create sympathy by showing creators being picked on in public.
“This comment says, ‘You’re a 32-year-old man making Mario lamps for kids in your bedroom, let that sink in,'” one video said, mimicking a video format where creators respond to negative comments.
ABC News identified four nearly identical videos, where different middle-aged men — seemingly in the same garage — spoke the same script.
While Chetty said that AI videos like these might have been easier to spot a few years ago, even experts sometimes struggle to identify what’s real from what’s fake.
“Maybe you’re walking down the street in New York, you’re not thinking too deeply and you’re just clicking away. That’s kind of how they get you, right?” she said. “Because they know that they want you to make a quick decision. They know you’re not paying careful attention. And it’s very easy to kind of take advantage of you at that point.”
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