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Online Issues: Buying goods off Trade Me

The internet creates a specialised set of problems which cannot always be dealt with in the traditional sense. With the development and increasing use of online trading sites, such as Trade Me, comes a whole new set of practical and legal problems.

At the time of writing this article, Trade Me had over 2.3 million active listings and an average of over 670,000 visitors to the site each day.  Those sorts of figures pose plenty of opportunities for something to go wrong.  When buying and selling on the site, we often have no idea of knowing who we are trading with and in some cases no way of finding out who it really is.  This means that if something does go wrong, the traditional remedies are not always available to us.

Purchasing goods
Let’s say that you purchased a used iPhone off a Trade Me seller.  You paid $500 for it (plus postage) and it is couriered to you from the trader who was listed as being located in Auckland.  A few months down the track your phone stops working and it appears to have been locked.  You make enquiries with your network provider and they tell you that the phone is stolen property.  You then go to the Police and they take the phone from you.  Now what?  You have paid $500 and are left with nothing.  You don’t know the trader’s full name or where he lives.  What remedies do you have against the trader?

It is important to note the distinction between buying from a private trader or a professional trader.   Professional traders are bound to comply with the Consumer Guarantees Act and the Fair Trading Act.  This means that in situations where you buy goods from a professional trader that do not match their description or that do not work properly, the trader will likely have breached one or more of the guarantees or duties set out in those Acts.  This may give you a greater prospect of successfully claiming against them.

If it was a professional trader that sold the stolen iPhone to you, the trader is in breach of the Consumer Guarantees Act in that it had no right to sell the iPhone to you (breach of guarantee as to title).

In terms of a private trader, it is more difficult, particularly if you do not have their full name and contact details.  Under Trade Me’s privacy policy, you can request the trader’s contact details for the sole purpose of making a claim.  You will need to provide Trade Me with a statutory declaration to that effect.  Given the number of requests and complaints that Trade Me is likely faced with each day, it may take some time before the details are provided to you and there is no guarantee that the contact details the trader provided were true or are current.  Once you have the details, you can either instruct a lawyer to contact the trader directly or you can file a claim in the Disputes Tribunal.  The filing fee for claims under $2,000 is $45; between $2,000 and $5,000 is $90; and up to $30,000 is $180.

In relation to the above scenario, you could claim against the private seller for breach of contract – it would be an implied term of the contract for sale and purchase that they had the right to sell the iPhone to you.

Placing feedback
If it is not worth your time and money to pursue a claim formally, or in addition to pursuing such a claim, Trade Me provides you with the option of placing feedback against the trader.  The Trade Me Feedback policy and  Code of Conduct provides that feedback must be relevant to the specific transaction and must be factual.  Resist posting anything defamatory as this can open you up to your own legal issues.

Often, when you have legitimately posted negative feedback, the trader will retaliate with negative feedback against you.  Retaliatory (and unjustified) negative feedback is against Trade Me’s Code of Conduct.  You can report unfair feedback through the Trade Me website and if Trade Me considers your complaint valid, it will remove the offending feedback.  To succeed at this option, we advise providing Trade Me with succinct and relevant details of the dispute and any proof that you have (Police reports etc if it is in relation to something like the above scenario).

If another member posts defamatory statements about you, you are also entitled to pursue legal remedies, but the ends are often outweighed by the means. In these sorts of situations it is usually quicker, cheaper and more effective to look at the practical options over the legal ones.

Give us a call if you would like to discuss the legal and practical remedies available to you in any of your online trading issues.


This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.

For further information

Sarah Rawcliffe - Harkness Henry Partner

Sarah Rawcliffe

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