Seven people were arrested at a house in Nakhon Sawan's Muang district for selling substandard and fake smartphones in an online scam, police said.
The arrests were made following complaints from buyers about an online shop known as "DD Shop" on Facebook.
The buyers claimed they were tricked into believing they were buying genuine smartphones at cheap prices, but they later turned out to be substandard or fake products.
The online shop offered smartphones at low prices ranging from 1,000 to 4,000 baht, police said.
After gathering evidence about the online shop, police found it was operated from a rented house in tambon Wat Sai and obtained a search warrant from the provincial court.
Seized from the house were 679 mobile phones valued at 1.35 million baht, machines used to make product logos and related equipment.
Nattawut Sukkasem, 33, identified as the owner of the shop, was among the suspects. The other six worked for him.
He rented the house as a production and storage facility.
Pol Col Sutthinan Khongchaemdee, a senior investigator in Nakhon Sawan, yesterday advised customers to buy smartphones from authorised agents to avoid being scammed.
He said that instead of saving thousands of baht they could be stuck with substandard or fake phones.
Police, armed with a search warrant, yesterday also searched Mr Nattawut's home for evidence and found an unregistered pistol and 40 rounds of ammunition.
His brother, Pathawee Sukkasem, 29, admitted that he owned the gun and was charged with the illegal possession of a firearm.