Facebook – buyer beware

Facebook – buyer beware

11 August 2014

If you’re a regular Facebook user, you might have come across local For Sale, For Free or Wanted groups. These groups are fantastic if you are trying to get rid of unwanted items – or if you’re looking to pick up a bargain. But, there are some risks involved when you buy second hand goods online.

Buying privately
Private sales typically include: buying at a garage sale, from a neighbour, from a classified ad in the paper, online auctions (where the seller isn’t a professional trader), and on social media sites like Facebook.

Generally, when you buy something privately, you do not have the right to cancel the contract and you have only limited rights if something goes wrong. This is a case of ‘buyer beware’.

However, you do have rights when buying privately if the seller has misled you, the seller didn’t have the right to sell the goods, or if the seller sells you a product that does not comply with product safety standards.

The seller has misled you
The Contractual Remedies Act gives you a right to claim compensation if you agreed to the contract based on what the other party told you, that information turns out to be incorrect, and you suffered loss.

The amount of compensation should be sufficient to put you in the position you would have been if the misrepresentation hadn't been made.

For example: John tells Mark that the phone he is buying from him, for the agreed price of $600, is a ‘popular smartphone brand’. Mark finds out a week later that the phone is in fact a counterfeit worth only $150. As Mark was misled he can seek compensation from John through the Disputes Tribunal for the cost of the difference $600 - $150 = $450.

The seller did not have the right to sell the goods
The Sale of Goods Act sets out a buyer’s right to cancel a contract or to claim compensation where, unknown to a buyer, the seller did not have the right to sell the goods, or the goods were being used as security.

The buyer can claim their money back from the seller, if the seller sold something when they did not have the right to.

For example: Elizabeth buys a car from a friend. She’s had the car for two weeks, when she gets a call from a finance company saying that the car was used as security under a consumer credit contract, and they want it back. Elizabeth can take a claim to the Disputes Tribunal [www.consumeraffairs.govt.nz/for-consumers/how-to-complain/disputes-tribunal] to try to recover her money from her friend.

The seller sold you a product that doesn’t comply
Under the Fair Trading Act sellers of certain regulated products must comply with Product Safety Standards and Unsafe Goods Notices including:
• household cots
• baby walkers
• children’s nightwear
• small, high powered magnets, in sets of two or more
• chainsaws without a chain brake.

See the Consumer Affairs website for more information about prohibited goods: www.consumeraffairs.govt.nz/for-consumers/law/fair-trading-act/what-you-need-to-know#prohibits

Check items before you buy them
If you are able to, inspect goods and check the background of sellers carefully before you buy goods.
• Ask questions, and get a written copy of the answers. Email is a good way to do this. If information about the goods turns out not to be true, you may be able to rely on theContractual Remedies Act to get money back.
• Check the online selling history of the seller.
• Check if there is money owing on higher priced items. If the item has money owing on it by previous owners who used it as security, it may be repossessed from you by a finance company. Search the Personal Property and Securities Register [www.ppsr.govt.nz/cms] by number plate (for vehicles) or by the seller’s name.
• For a car, get an independent pre-purchase check by a mechanic.
• Check to see if mechanical or electrical items work, and get them checked out by an expert if you can.
• If the item has a manufacturer’s warranty on it, it may still apply after the sale so make sure you get that off the seller.
• Get a receipt from the seller saying when you bought it and the name and address of the seller.

Seller in trade
People who sell goods online need to be aware of recent changes to the Fair Trading Act. If you are deemed to be in trade, you will need to disclose that you are a trader online.

See the Commerce Commission website for more details: www.comcom.govt.nz/fair-trading/fair-trading-act-fact-sheets/buying-and-selling-online/

Need more information?
• For information on buying second hand goods, visit: www.consumeraffairs.govt.nz
• See the Commerce Commission’s Buying and selling online factsheet [510 KB PDF] http://www.knowyourrights.co.nz/pdf/Buying-and-selling-online-fact-sheet-April-2014-2.pdf

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ENDS

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