Online auctions – know your rights when things go wrong (Part 3 of 3)

Bought a lemon through an online auction. What are your rights?

In the first A Word of Advice article on auctions - Online auction tips for sellers - we provided suggestions to help avoid the pitfalls of online auctions. This article provides online auction buyers with information about their remedies if things do go wrong.

Buying from a trader in New Zealand

Traditional auctions are not covered by the Consumer Guarantees Act. In the Ministry’s view online auctions are still auctions, although buyers are not physically present at the auction with other bidders. This means you do not get the same protection as you would if you were buying from a retailer.

But auction website operators and online sellers who are considered to be operating in trade (as compared to private sellers) must comply with the Fair Trading Act. This Act prohibits people in trade from misleading the public about goods or services for sale, or making false representations about those goods or services.

Private sellers in New Zealand

If you are buying from a private seller through an online auction site, you are not covered by the Fair Trading Act. The Act does not apply to private sales. You are also not covered by the Consumer Guarantees Act, as that law only applies to sales by people in trade.

As a buyer, the Contractual Remedies Act may give you some protection when buying from a private seller. However to seek a remedy under this Act you must show that:

• you were persuaded to buy the item by what the seller said about it, and
• what the seller said was untrue, and
• the seller’s false statements have caused you to lose money – eg, by having to pay for repairs when the seller told you the item was in excellent condition.

Buying from an overseas online auction

New Zealand consumer laws will not apply to your transaction. Check for information about your rights and remedies against the seller or auction operator on any overseas online auction website.

If problems occur

• First try to resolve the dispute directly with the other party.
• If the seller is not contactable, follow a site’s dispute resolution process if they provide one.
• Place feedback on the site about the buyer or seller so others are aware. Any feedback should be fair and accurately describe the issue or problem you encountered.
• You may be able to use the Disputes Tribunal if your dispute is with a seller or buyer living in New Zealand. The Tribunal deals with contractual disputes over goods and services.
• If your transaction is with an overseas buyer or seller, you may be able to use an online disputes resolution service to resolve the problem. For more information about these services check out an international e-commerce complaints site.

Want more information?

For more information on online auctions and the Disputes Tribunal visit our website (see the Consumer Information section).