Coach driver Andy Miller often drives down the 30mph stretch of road, taking tourists to the nearby Lulworth Cove, a popular tourist destination.
He was told about the fake camera through a group on social media where drivers share sightings, but said as soon as he drove past it he realised the camera was not real.
Mr Miller added: “It’s a public road, not a private estate, so it should not be there. Everybody is looking at it as they go past.
“I feel it has been put up to make tourists scared. Cameras are installed for the reason of slowing people down only when there is a need to do so, not to be put up willy nilly by a resident.