AA Legal Documents
Law guide

Internet auctions

Contents

Internet auction sites offer a tempting shop window with a wide range of merchandise, ready to buy at the click of a button. For sellers, they offer an easy way to advertise and sell their goods. But before you bid, do you know your rights?

Whilst auction sites seem to be straightforward, they don't operate in the same way as traditional auctioneers, and they don't have the same responsibilities. When you buy something from an internet auction site, you are usually buying from the seller, not the site, so it is the seller you will need to complain to if something goes wrong. The seller could be a private individual, or a business. It is important to know if the seller is a private individual or a business, as this will affect your rights.

As a general rule, you will have more rights if the seller is a business trader than if they are a private individual. For instance, in a private sale, the goods must be as described, but a seller who is not acting as a business isn't covered by the rules on satisfactory quality and fitness for purpose. One of the biggest problems with internet auctions is that it may not always be possible to tell if the seller is a business trader, and if you have a problem, it could be harder to get it put right than if you bought from a shop. Some auction websites offer complaints resolution processes or anti-fraud guarantees. Not all do though, so read the terms and conditions. The obligations which the website has to you are likely to be limited.

Enjoy the flexibility e-shopping gives you, but be sensible and know the risks.

How can you tell if the seller is a business trader?

It's not always possible to tell whether you are buying from a business trader on an internet auction site. A seller who is a business trader should tell you that they're a business trader before the sale is made. However, many traders don't do this and pretend to be private sellers in order to avoid their legal responsibilities towards their customers.

Some things which might tell you that you are buying from a business trader are if:

  • there is a large amount of feedback from buyers
  • there is a large number of similar items for sale
  • the items for sale are mostly new
  • the items are being sold in a 'shop' within the site or have 'power-seller' status on eBay
  • there are links to a business website
  • the photographs of the items for sale are stock photographs, rather than the actual items themselves
  • the user ID is a trading name or includes, for example, 'Ltd'
None of these indications are decisive, as private individuals could easily establish a false "business" front and vice versa.

Dealing with problems

Using the auction site itself

Some internet auction sites have a protection scheme. These schemes can deal with problems such as non-delivery of goods or goods not matching their description. They can be useful if you want to avoid going to court, or the seller is from overseas, so it's worth checking if you can make a claim under one of these schemes.

However, you need to consider the following:

  • you may only have a very short period of time in which to make a claim
  • there may be several types of problem which the scheme doesn't cover
  • the amount of money you can claim on the scheme might be limited
  • the number of claims you can make on the scheme may be limited
  • you may have to try other options for solving your problem first, for example, making a claim through your credit card provider, if you paid by credit card
Payment protection schemes

Many payments for things bought on internet auction sites are now made through special payment services, such as PayPal. Payment services will collect your money and won't release it to the seller until you have received your goods.

These services can be useful, but they do offer very different levels of protection for your money. Look carefully at the terms and conditions to find out what the scheme does or doesn't do. You may have to pay a fee to use a payment protection scheme, so it's important to shop around for the best one.

When you use an online payment service, you may find that your payments are not fully protected in some circumstances, for example, if you are dealing with sellers from overseas. You may also find that you are not protected if:

  • you did not complain within the time limits, which are sometimes very short
  • you entered into a deal with the seller outside the internet site
What to do if you can't trace the seller

If you aren't able to trace the seller, contact the website. The site may be able to give you the seller's details. There is nothing in law which prevents them from doing this. However, they don't have to give you the seller's details if they don't want to.

If the seller appears to operate their own website with their own domain name, it may be possible to find out how to contact them by searching on a 'Who is' search engine, such as Who Is or Nominet (UK domains only).

Top tips:

  • Check the seller's reputation. Most auction sites post feedback ratings of sellers based on comments by other buyers. Be wary, some sellers will make up accounts and post good comments about themselves. Look to see how many transactions the person giving feedback has carried out online; a number next to their name will indicate this. Ask questions before you bid; e.g. what is the returns policy? A good seller will always welcome enquiries.
  • Check the description, type of model and retail price of the goods. Be wary: if the price is too good to be true, it usually is. If it's a collectable item, take steps to confirm it is authentic.
  • Before you bid, find out what form of payment the seller will accept. If it's only cheques or money orders, decide whether you are willing to take the risk of sending your payment before you receive the product. If possible, you should use a credit card (check your details are protected) because it offers the most protection if there's a problem.
  • Know how much you are willing to pay, stick to it, and think whether you are getting value for money. Once a price is accepted, you will be expected to pay.
  • Read the small print. Is postage included in the price? How will the goods be posted? Do you need extra insurance? Is the seller based in the UK? If not, what action can you take if things go wrong?