"They said 'you've been caught shoplifting, you've been caught on camera putting a wig in your bag as you were walking out of Portmans'," Lobo told the Herald.
"They looked in my bags, and then I kind of go a bit blank, because I was in complete shock."
The mall company says they regret the incident, which was a case of mistaken identity.
Lobo, an Auckland nurse who is married to a doctor, was told to stand outside Glassons with a security guard, while the shop was checked in case the wig was hidden there.
Distraught, she started to cry while other shoppers stared at her.
"It was at least 15 minutes standing there, because they were convinced I'd stashed the wig in Glassons.
"I said to the woman, 'Why are you doing this to me'?'"
Lobo was told she needed to stay where she was until the wig was found. So she demanded to see the footage that had apparently caught her, but was refused.
In a panic, she rang her husband, who told her to put the security guard on the phone.
Her husband asked what authority they were holding Lobo under, only to be told by security that she was free to leave.
"He definitely told me I had to stay," Lobo said.
"But after that conversation, he came over and said, 'Okay you can go now'.
"But they'd made a complete embarrassment of me, everyone was staring, I was crying.
"So finally I left, but I heard them say as I was leaving, 'She is the thief'."
To make matters worse, Lobo's husband runs a doctor's practice nearby. While standing outside the store with security, she feared a patient would recognise her.
Days later, she organised a meeting with mall operator Scentre Group management, but wasn't happy with the response.
In the meeting she was told Portmans staff had made further accusations about her, including that it was the second time she'd stolen a wig from a mannequin.
Later email conversations revealed she'd been identified after a shop assistant said it was a Maori woman who stole the wig.
"Because I was the only dark-skinned person in the shop at the time, they've made an assumption that it was me, and then lied and said they specifically saw me," Lobo said.
"This is a perfect example of the institutional racism that's alive and kicking in New Zealand today.
"When I put this on Facebook, I got so many messages on there from my friends who've had this sort of thing happen to them.
"It needs to stop now, we need to stand up together and stand strong."
Lobo wanted a proper apology and disciplinary action to be taken against the staff member concerned.
An email from Portmans St Lukes to Lobo said they were "very sorry about the mistaken identity".
It included a statement from the woman who had been working at the time, who said she'd seen "a Maori women with bleach blonde hair and low pigtails snatching the wig of our mannequin in store" [sic].
Scentre Group issued a statement saying it was "regretful" that Lobo had a "stressful experience".
"Westfield security staff were called by a retailer to assist them with a suspected theft.
"The guards responded to the callout and visited the store in question.
"As is our standard procedure, the retailer is required to identify the individual. It now appears that the identification of the individual was incorrect, and a case of mistaken identity.
"We have met with the individual to understand the events leading to the situation, and [are] aware that the individual is in dialogue with the retailer concerned."