No other online forum can bring as many buyers and sellers together as an internet auction 'marketplace'.
For buyers, online auctions offer the chance to snap up every possible kind of consumer good, often at bargain prices. It is not surprising that they are an extremely popular way to buy.
There are two main styles of internet auction:
Marketplace internet auctions: The business that runs the website is not directly involved in the auction process. It simply provides a forum and rules for buyers and sellers to deal with each other through a bidding process. Ebay is the best known example.
Traditional auctions: Instead of conducting an auction 'in person', an auction house uses a website to sell goods on behalf of a vendor.
Buying from another person on an auction website is not the same as buying from a business online or a shop. You should be aware of how your rights may differ and what protections are available to you.
Protect yourself and shop sensibly
The popularity of the internet auction marketplace means you need to be cautious about doing business. You may come across inexperienced sellers who are not aware of their responsibilities to you and the law and you also may encounter dishonest traders too. If you take the right precautions and know what to look out for, you can participate more safely in internet auctions.
Read and understand the safe trading guidelines offered to you by the auction website you are using. Follow all their rules and tips for a safer shopping experience.
Find out whether the auction site has any procedures for resolving disputes. Many auction sites have buyer protection policies or complaint handling policies which are designed to help you resolve your concerns. Check for these policies before you make a purchase – there may be terms and conditions which could affect your eligibility, so it is a good idea to know your responsibilities in advance.
If you need to create an account or a login to begin bidding, choose a secure password to protect your personal details.
Learn as much as possible about the seller as you can. If the auction site uses a feedback rating system, check comments left by other buyers and sellers. A seller with a large number of positive comments is more likely to be trustworthy.
Learn as much as possible about the product as you can. Do not be afraid to ask the seller detailed questions or request extra pictures.
Be wary of auctions started by sellers who have no trading history, and that have had several bids from buyers with no history. This could be a warning sign that an auction is not genuine.
Do not agree to do business privately 'outside' the auction site, even if you are offered a better deal. This is a tactic used by scammers and you may not be covered by any fraud protection offered by the website.
Only use payment options recommended by the auction site. Some electronic money transfer services cannot be traced, which makes them more popular with scammers.
Consider using a reputable escrow agent for valuable items. The escrow service is an independent third party who will hold a payment in trust until the buyer receives and accepts the item.
Keep printed and electronic records of all bids, item descriptions, emails and receipts. If there is a dispute, these will be important to prove what happened.
Watch out for scams
Most online auction sites put a lot of effort into spotting scammers, but you need to be careful too.
Stay one step ahead of the scammers. Visit our SCAMwatch website to learn more about online shopping and auction scams and dozens of other scams that target you or your small business. You can also find out more about how scams work and how to protect yourself. You can also report scams to us via SCAMwatch.
If you take the right precautions and know what to look out for, you can greatly reduce the chances of being scammed online.
Explore SCAMwatch for yourself, or follow these quick links to find the SCAMwatch page that you are looking for:
Do I have rights if there is a problem with my purchase?
When you buy goods and services from an online business or in a shop, for example, consumer protection laws give you certain rights. Your protections are not the same when you buy goods at an auction.
Did you bid?
Commonwealth and state and territory consumer protection laws do not normally apply to purchases where the goods have been auctioned privately. This means that if you have bought goods at auction or from an individual seller on an auction website, you may need to seek independent legal advice if you have a problem.
The auction site is usually not a party to the contract and therefore may not be liable for claims made about the goods, non-delivery of the goods or damages resulting from a dispute about the goods.
Most auctions are a case of 'buyer beware' as there are normally no returns or refunds.
Did you buy without bidding?
Some auction sites give you an option to buy a good immediately without having to bid for it (for example, the 'Buy it now' option on ebay). If you are willing to pay the listed price, you can secure the purchase without going through the bidding process. This type of sale is not therefore not an auction so you may have rights under consumer protection laws.
If the seller was a private individual, then you will probably be unable to rely on consumer protection laws to remedy your problem, but if you purchased goods at a price set by a trader or a business, then your purchase may be covered as it would be in ordinary circumstances.
Is there anything I can do if there is a problem with my purchase?
Problems with your purchases are the only downside of shopping at an auction. Although you may find there is not much you can do if you have made a bad purchase, you could try the following:
Step 1
Contact the seller and try to negotiate a resolution. There may be a reasonable explanation for the problem or the seller may want to resolve the problem to avoid negative feedback.
Step 2
If you cannot reach a resolution with the seller, check the auction website for information on dealing with disputes, or whether you are entitled to any compensation under a buyer protection scheme.
Step 3
If the seller is an Australian business operating through the auction site, you could contact the office of fair trading in your state or territory. They will be able to tell you if the transaction is covered under any local laws, and whether there is action you can take. You can search our Consumer & business directory for contact details (see the link in the menu on the left).
The ACCC’s SCAMwatch website provides information on common scams. The website has tips on how to protect yourself from scams and report them to the relevant agencies.
