Consumer Guides > Online auctionsOnline auctions Content kindly supplied by consumer.org.nz.
Online auctions can be fun, addictive and there are genuine bargains to be found. But you need to take care you don't get ripped off.
Your rights depend on whether you are buying from a private seller or from a professional trader.
Buying from a private seller
Online auctions where you buy from a private seller are regarded as "private sales". You have limited protection, since private sales are not covered by either the Consumer Guarantees Act or Fair Trading Act.
However, contract law does apply: for example, the seller can't refuse to supply, or supply the wrong thing, and buyers must pay up.
You may also have some protection from the Contractual Remedies Act. This Act says if the seller misrepresents the product and you're persuaded to buy it because of that misrepresentation, you can claim damages. If the misrepresentation leaves you seriously out of pocket, you have the right to cancel the deal.
To successfully make a claim, you must be able to prove:
you bought an item based on information provided by the seller, and
that information provided by the seller was wrong, and
the false information provided by the seller meant you have lost money.
The Sale of Goods Act may also provide some comeback if you've bought a product that doesn't match its description. This Act says where goods are "sold by description", they must correspond with that description. If they don't, you can reject them.
"Description" usually means a statement about the kind or class of the good, rather than its condition or quality.
The Act also gives you the right to keep the goods but claim damages for any financial loss resulting from an inaccurate description. The hitch is sellers can contract out of the Act – and if they do, these rights won't apply.
Buying from a professional trader
Professional traders selling on internet sites are required to tell you they’re “in trade” so you know who you’re dealing with.
When you buy everyday goods for personal use from a professional trader, you’re covered by the Consumer Guarantees Act and the Fair Trading Act.
The Consumer Guarantees Act requires goods to be of acceptable quality and fit for purpose.
They must also match the description given and be delivered on time where the trader is responsible for delivery. When no time is agreed, delivery must be within a reasonable time.
You’ve got grounds for a claim against the trader when these requirements aren’t met.
See our guide to the Consumer Guarantees Act for more information.
The Fair Trading Act prohibits traders from making false or misleading claims about the products they sell. This means goods must be accurately described on the listing and in communications with the seller.
Price comparisons must also be valid. Unless the price is clearly GST-exclusive, the seller cannot add GST after the price is agreed.
You have grounds for a claim if the trader has misled you.
See our guide to the Fair Trading Act for more information.
Disputes
What if the seller lets me down? If you don't receive the goods you've paid for, or you have a problem with a sale:
Ask the seller why - there may be a good explanation.
Inform the site administrator (they may not be able to help you, but they could ban the trader).
Post negative feedback against the seller involved.
If the other party lives in New Zealand, you can take them to a Disputes Tribunal.
You may also be able to make a complaint of criminal fraud to the police.
What if I change my mind?
In placing a bid you are making an offer. If the seller accepts, you are in a legally binding contract, and unless the product is faulty, stolen, or has a security registered against it, you will be obliged to complete the purchase.
Likewise, if you are the seller you can't just change your mind after accepting an offer on an item you had for sale.
As with any contractual situation, go into it with your eyes open. Read the terms and conditions, make sure you understand exactly what you are buying and how, use an escrow service to protect your money, and keep in touch with the person you are trading with.
This buying checklist is brought to you by consumer.org.nz. Last reviewed Apr 2017.
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