The City of Markham is cracking down on clothing donation 'ghost bins' that funnel used clothes to for-profit companies under the guise of giving to charity.

Claudia Marsales, senior manager of waste and environmental management in Markham, told CBC Radio's Metro Morning that the city has removed 50 bins so far this summer.

She said that after receiving numerous complaints from residents, her team did an audit and found about 120 bins scattered in vacant lots across the city, all of which claimed in writing on the sides that clothing donations would go to various charitable causes.

Marsales told Metro Morning that the City of Markham had received a number of complaints about misleading bins before they decided to take action. (CBC)

"We would phone the number, we looked up the charity on them, we really didn't get very far. It would be really difficult for the average citizen to know, is this box I'm going to put my clothing in a real charity," she said.

Marsales estimates that 90 per cent of the bins are run by for-profit companies, who pick up and bundle the clothes before they are "sold by the pound, into the marketplace, [and] end up in Africa, and South America."

Bins are big business

In 2010, Canadian exports of worn clothes were valued at $174 million, with Ontario's share of that coming in at over $132 million.

Marsales said that it's hard to know exactly how much money the individual bins generate, but based on her research, she believes that a bin in a good location in the GTA could yield up to $40,000 a year once the clothes are sorted and sold.

The competition for good locations is fierce, leading to what one industry insider described in 2012 as a "violent" turf war in Ontario.

Marsales has seen instances of companies stealing each other's bins to replace them with one of their own.

"Even with our program of picking up the bins, we literally would pick up a bin on Friday and on Monday there's another bin in its place," she said.

To help break the cycle, Markham has introduced bins of their own, which partner with legitimate charities.

"When you get down to it, people just want to donate their clothes," said Marsales, adding that having a replacement program at the ready is something other cities should consider if they plan to go after ghost bins themselves.

A list of the locations of Markham's new bins can be found here.