Internet auctions (Part 2 of 2)

Surfing internet auctions websites for odds and ends, or to find the last ceramic turtle for your prestigious collection, has become a pastime for many of us.

In the last edition of Word of Advice we gave you some tips for buying or selling goods by internet auction. Now we take a look at what you can do if things go wrong.

Buying from a trader in New Zealand

Auctions and competitive tenders are not covered by the Consumer Guarantees Act 1993.

This means that if you bid on (and) win that last ceramic turtle in an internet auction, your purchase will not be protected by the provisions set out under the Consumer Guarantees Act.

To confuse the matter slightly, goods bought at the ’buy now’ price in an internet auction are covered by the Consumer Guarantees Act. This is because the ‘buy now’ purchase method is similar to selecting an item from the shelf in a shop and paying the price offered by the seller - there is no negotiation or competition with others as to the price.

Traders who operate on internet auction sites must comply with the Fair Trading Act. The Fair Trading Act prohibits people in trade from making misleading claims or false representations about goods or services for sale. The Commerce Commission investigates breaches of the Fair Trading Act.

In online auctions it can be difficult to determine whether someone is a private seller or a trader. If you are unsure, you should check the seller’s past and present listings. A trader will generally be someone that frequently sells large amounts of goods online, but it doesn’t need to be their main source of income.

Buying from a private seller in New Zealand

Private sales are not covered by the Fair Trading Act or the Consumer Guarantees Act. However, this doesn’t mean that sales from private sellers are without legal protection. You may be able to look into other remedies provided by different laws.

For instance, if you purchased your ceramic turtle because the seller told you something that turned out to be untrue (e.g. the seller told you it was an antique, but there’s a date stamp on it from 2006), you may be able to cancel the contract and/or claim damages under the Contractual Remedies Act.

The Sale of Goods Act may also protect you. This Act provides, among other things, implied conditions as to the quality of goods and their fitness for purpose. If a seller breaches these conditions, you may be entitled to compensation for any associated loss in value of the goods.

If things go wrong

Firstly, try to resolve the dispute directly with the other party concerned. If this is no good, follow the auction site’s dispute resolution process if they have one.

Place feedback on the site about the seller so others are aware. Keep your feedback fair and describe the problem accurately.

If you are unable to resolve the problem, you may need to file a claim in the Disputes Tribunal. Contact your local District Court office for information on how to do this.

If you’ve bought goods from an overseas auction website you may be able to use an online disputes resolution service to resolve the problem.