The same laws apply online
There are no laws in Australia that specifically deal with online shopping. Legally the same requirements exist whether a purchase is conducted over the internet or at a shop. So when you buy goods or services over the internet from an Australian trader, Australian Under the Australian Consumer Law, a person who buys goods or services for less than $40 000 or for personal or home use. protection laws apply.
Consumer protection laws
These are discussed in detail in Section 7: Consumers, contracts, the internet and Property rights over creative works, such as books, music, art, sound recordings, films or broadcasts. Generally only the copyright owner, or someone who has their permission, can reproduce, publish, copy, perform or broadcast the works..
The most significant issues in protecting the rights of an Australian consumer shopping online are:
- Behaviour that takes unfair advantage of a vulnerable person in a contract or other transaction. The vulnerability can be due to factors such as poor education, disability, language difficulties or being affected by alcohol. (see Chapter 7.2: Consumer protection laws);
- Something done by a manufacturer or seller that is unfair, dishonest or likely to mislead a consumer when buying goods or services. and ‘passing off’ (i.e. pretending someone else’s goods or services are yours) (see Chapter 7.2);
- conditions and warranties (see Chapter 7.1 and Chapter 7.3).
Actions you can take if you believe any of these rights have been breached are covered in Chapter 7.4.
Other consumer protection
If you are buying goods and/or services over the internet, other consumer protection laws may also apply, depending on your circumstances.
Consumer A debt that does not have to be paid until some future time. Being allowed to pay later, in the future, for something you are getting now. laws regulate the purchase of goods and/or services by credit; for example, credit cards, home loans, personal loans, associated mortgages and leases.
The ePayments Code regulates consumer electronic payment transactions, including ATM, EFTPOS and credit card transactions, online payments, internet and mobile banking and BPAY.
The ePayments Code replaces the Electronic Funds Transfer Code of Conduct (‘EFT Code’) and provides protections in cases of An intentionally dishonest act, or lack of action, done to deceive someone and bring some advantage over those who have been deceived. and unauthorised transactions.
The Australian Securities and Investments Commission (ASIC) administers the ePayments Code, which includes monitoring compliance and reviewing the ePayments Code regularly.
The Electronic Transactions A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. 1999 (Cth) applies to all laws of the Commonwealth. It provides that if Commonwealth law requires information to be given in writing or with a handwritten signature, this requirement is Treated by the law as if something is the case, even if that is not the reality. For example, children may be deemed to have the same home as their parents, whether they actually live there or not. Or a person may be deemed to have given their consent to something if they hear about it and do not object. Compare rebuttable. to be met if the information is given electronically. Similarly, if written records are required to be kept, an electronic version of the documents satisfies this requirement.
The equivalent state Statutory rules made by parliament or by bodies the parliament delegates power to, for example a local council or a registration authority. See delegated legislation; statute. is the Electronic Transactions (Victoria) Act 2000 (Vic).
Protect yourself when shopping online
Before you buy goods or services online, you should find out the following information.
Who is the trader?
Establish who is selling the goods or services, including details of the trader’s business: their physical address, business registration details (e.g. business name and ACN/ABN), and contact details.
On ASIC’s website (https://asic.gov.au), you can search for registered business names for free. The ACNs and ABNs of Australian organisations are listed at https://asic.gov.au.
What are the transaction details?
Knowing the full details of the transaction before entering into an agreement with a trader A document that sets out what a person wants to happen to their money and other property after they die. help you to know what to expect if you buy the trader’s goods or services. Details you should obtain include:
- a clear description of the goods or services;
- the full cost in Australian dollars of the goods or services being purchased, including The amount charged by a lawyer for legal work. Lawyers can only charge the amount agreed with the client in a costs agreement or the amount stated by a court in its rules. The party who loses a case usually has to pay all their own costs plus most of the costs reasonably incurred by the other side. See also indemnity costs. like delivery, insurance and credit card charges;
- any relevant return, exchange, refund and warranty policy;
- when you will receive the goods or services;
- the terms of any insurance over the goods or services bought (e.g. whether it includes damage during delivery);
- the terms and conditions of the agreement. Read them carefully as they outline what you agree to be bound by. Always print out any terms and conditions that you agree to, because traders may change them subsequently. Keep any correspondence (including emails) between you and the trader, and print out any forms that you fill in and any offers on webpages that you accept, as they will be relevant to your transaction;
- the trader’s policy on handling complaints and resolving disputes.
Are there any privacy and security concerns?
Consumers often use credit cards when shopping online. The nature of the internet means that transmitted information may be intercepted by a third A person or organisation directly involved in a court case. Parties include the plaintiff or applicant, the defendant, and any third party added to the action, but not independent witnesses.. To minimise the risk, make sure that the trader is using a secure system for transferring information during a transaction. The most common method of Money or property promised to be handed over as a guarantee for repayment of a loan, or as a guarantee that a defendant will meet their bail conditions. used in online shopping is the Secure Sockets Layer (SSL) technology. SSL technology encrypts data transmitted to protect the information being sent, including your credit card details.
An unbroken key or padlock at the bottom of a web browser indicates there is a secure connection, and that the information you send will be encrypted. To obtain information about the security used by a website, double-click the unbroken key or padlock.
Consumer protection laws
Through internet auction sites (e.g. eBay), individuals can enter into transactions with each other. These transactions are often referred to as consumer-to-consumer (C2C) transactions.
If the website operator has control over the goods being auctioned it is likely to be a business-to-consumer (B2C) transaction. If the website is acting as a trading centre, it is more likely to be a C2C transaction, provided that the A seller. is not a business using the site to clear stock.
C2C transactions conducted through internet auctions may be regarded as private sales between individuals, and not as trade or commerce, and are therefore not covered by the Competition and Consumer Act 2010 (Cth). This does not mean that the consumer has no rights in this situation, but they have fewer rights than if consumer protection laws applied.
If you buy goods or services through an internet auction and consumer protection laws do apply (because you bought from a business, or in the course of trade or commerce) you may still have lower protection than if you had not bought the item at an auction. This is because some of the implied conditions and warranties do not apply when the goods are purchased at an auction.
The law varies from state to state. For example, in Victoria, according to the Goods Act 1958 (Vic), goods bought at auction should be of Being in good enough condition to be sold. Under Australian consumer protection laws, goods must be of merchantable quality. and match the description given or the sample.
Before bidding at an internet auction
Before bidding at an internet auction, read the auction site’s policies, rules, terms and conditions to understand the Formal delivery of legal documents to a person to tell them there are court proceedings against them which they must defend, or to make sure a witness in a case knows when they have to go to court to give evidence. that the auction site is providing and what to expect. Read what the site says about how they handle frauds and complaints. Some sites The first step in agreeing to make a legally binding agreement. An offer must be accepted before there can be a legally enforceable contract. For example, a person can offer to sell their car for $5000 and a buyer can accept the offer and pay that purchase price. protection to successful bidders in the form of free insurance up to a specified amount if things go wrong (e.g. if the item purchased is not delivered).
Also, before the auction, verify the seller’s identity and contact details and make arrangements with the seller about what to do if there is a problem. If you have any queries, contact the seller for answers. If their answers are unsatisfactory, do not make a bid.Check for any comments or ratings about the seller on the auction website. Comments from previous purchasers will help you decide whether to participate in the auction.
Know the product that interests you. Look at the market or retail price, written descriptions and photographs of the product, and any warranties.
Find out the terms of sale, including: who pays for shipping and handling; whether there is insurance, what it covers, who pays for it and what it costs; whether there is a return policy; and what payment mechanism can be used.
Bidding at an internet auction
Set the maximum price that you are willing to pay for the goods or services, and do not exceed it. The maximum price should include all costs, including insurance, taxes, shipping and handling. Setting a limit on what you are willing to pay helps to prevent you from bidding an excessive amount for an item.
Note that prices can be inflated by fake bids; although they are not allowed by auction websites, fake bids do occur.
A good method of payment when shopping online is to pay the supplier when the product is delivered (i.e. cash on delivery (COD)). If the seller does not agree to such an arrangement, a credit card should be used because of the ‘charge-back’ service that many financial institutions attach to their credit cards (i.e. reversing the (1) A statement giving the details of a crime an accused person is claimed to have committed. (2) A personal property security. (3) A judge’s directions to a jury at the end of a case. if the seller fails to deliver the product).
Sending a bank cheque or money order before you receive the goods or services exposes you to a higher risk of fraud. If a seller will not send the product unless you make such a payment, you have to decide if you are willing to take the risk.
PayPal is an electronic payment system commonly used on auction sites and is an alternative to cheques or money orders. The recipient of a PayPal payment gets a financial transfer from PayPal, which processes payments for a fee.
An alternative is to use an ‘escrow agent’. An escrow agent’s role is to hold the payment for the buyer until they receive the product. Escrow agents are used to protect both parties from fraud. They usually charge the buyer a percentage of the cost of the product. If you use an escrow A person who acts for someone else. They can make decisions, carry out tasks or make agreements for the other person. For example, if you ask someone to bid for you at an auction they will be acting as your agent., familiarise yourself with the terms of the service offered, and check if the agent is reputable.
Always keep records, either by saving or printing details of the transaction, including the product description (a written and photographic description), the seller’s identification, every bid made, all emails between you and the seller, and every receipt or record provided.
Consider using the insurance offered by the auction site (or another organisation) to protect yourself if something goes wrong.
If something goes wrong
Post feedback about the seller on the auction website
Many auction websites allow you to post a comment about and/or ranking for a trader you bought goods or services from. This allows subsequent users to be warned about them, but it will not provide you with any refund or exchange.
Make a claim to the auctioneer
Some auction websites offer free insurance. Check the terms and conditions of the insurance policy on the auction website to see if you can make a claim. You will probably need to first apply to your credit card provider for a ‘charge-back’ (see ‘Bidding at an internet auction’, above) before you can make a claim with the auctioneer.
Complain about the auction website
Although you did not purchase the goods or services from the auction website but from a trader via the website, the auction website might have breached your rights as a consumer.
Case example: Online auctions
Evagora v eBay Australia & NewZealand Pty Ltd  VCAT 49
Few complaints about internet auctions have come before the courts. However, in Evagora v eBay Australia & New Zealand Pty Ltd  VCAT 49, VCAT determined that hosting online auctions is providing a service. This means that a complaint about the provision of this service can be regarded as a consumer and trader dispute under section 184 of the Australian Law and Fair Trading Act 2012 (Vic) (the current version of section 107 of the Fair Trading Act 1999 (Vic)), which was considered in the Evagora case. That section gives a consumer the right to bring a claim at VCAT in respect of a consumer and trader dispute.
For further information, see Section 7: Consumers, contracts, the internet and copyright.
Purchasing from overseas
Consumer protection laws
When you buy goods or services on the internet from an overseas trader, it can be uncertain whether Australian consumer protection laws apply or whether an Australian An independent body that hears legal claims brought by parties and decides between them. Serious cases are heard by a judge and jury, or just a judge. Less-serious cases are heard by a magistrate. has any The authority of a court or tribunal to hear matters brought before it, based on some factor such as area or law, amount of money claimed, or geographic area..
The Competition and Consumer Act 2010 (Cth) applies to overseas traders ‘carrying on business’ (i.e. doing business) in Australia, but it is not clear whether this includes sales made via the internet by overseas traders.
If an overseas internet trader is found to have been carrying on business in Australia, then Australian consumer protection laws apply, even if the An agreement that the law will enforce. states otherwise (e.g. ‘This contract is governed by the laws of California’).
If there is no Australian consumer protection (i.e. the trader is found not to have been carrying on business in Australia), then only the consumer protection laws of the trader’s country (if any) apply. These may provide you less rights than if you had purchased the good or service within Australia.
Even if Australian consumer protection laws apply and an Australian court has jurisdiction over an overseas trader, it may be too difficult and/or too expensive to To make people obey a law or the terms of an agreement, using police powers or court orders. a judgment against a trader who has no assets in Australia.
Australian customs service and GST
When an overseas trader sends goods to a consumer in Australia, the Australian Customs Service (ACS) checks whether the goods should be cleared for entry into Australia.
Prohibited or restricted goods are seized; other goods may require a permit. Imported goods may also be subject to a customs duty. The ACS’s classification of the goods, and the country of origin, is relevant in determining the duty payable by the importer (i.e. the consumer).
In addition, the ACS levies a Goods and Services Tax (GST) on imports above a ‘low value threshold’ (except tobacco and alcohol). The method of ordering (electronic, phone or mail) does not affect whether GST is payable.
Tips for purchasing from overseas
Find out from the ACS whether you can legally import the goods you wish to buy, and whether the goods are subject to GST or other taxes. Goods bought from overseas can have significant delivery expenses, so always check the delivery charges carefully. Also, overseas traders may not list the purchase price in Australian dollars, so you should do the conversion.
Always check the overseas trader’s website for any terms and conditions that state which country’s laws apply, and which country’s courts would be relevant to your bringing an action in case of a dispute. It is common practice for an overseas trader to designate the law and courts as being in the country in which the business is located. However, there is some legal uncertainty in this area.
Fraud occurs online, just as it does in the offline world. Because the internet allows for cross-border transactions, it may be difficult to seek redress if you are the victim of online fraud.
Your options when things go wrong
Contact the trader
Contact the trader/seller via telephone, fax, post or email to try to resolve the dispute. Explain the problem and what you want (e.g. a refund, or return of the goods). Keep records of all your communications with the trader. It is recommended that you write a letter, so there is a record of your complaint, which can be used if further action is taken.
For help in writing a complaint letter, visit the consumer assistance portal on the Australian Competition and Consumer Commission (ACCC) website (www.accc.gov.au/consumers).
Contact your payment provider
If you purchased the goods or services with a payment card (e.g. credit card, debit card or stored value card), there may be protections available. For example, some credit cards have a ‘charge-back’ facility (see ‘Bidding at an internet auction’, above).
Third-party payment services such as PayPal often include dispute resolution mechanisms if there is a dispute in relation to goods and/or services purchased using the service.
Contact an industry body
Many traders are members of an industry body or professional association that follows a Code of Conduct. If the trader belongs to such an organisation, the industry body may be able to help resolve your dispute. The ACCC (www.accc.gov.au/consumers) provides comprehensive information on where to go to make a complaint.
If the trader is based overseas, the relevant consumer protection agency of that country may be able to advise you whether the trader belongs to an appropriate industry organisation.
Contact a consumer protection agency
If the problem is not resolved, contact the consumer affairs agency for the state or territory where the trader is located. If you are in a different state or territory from the trader, you can contact the ACCC. The ACCC may also be able to help you if the trader is overseas. For overseas traders, you can also visit www.econsumer.gov, which is a joint project of consumer protection agencies from around the world that provides information for international consumers and facilitates cross-border complaints.
Take legal action
If your dispute has not been resolved, you can take it to the relevant court or A body set up to hear and decide disputes, usually with less formality and less strict rules of evidence than in a court proceeding.. However, legal action can be costly and may only be worth pursuing if the dispute concerns a significant sum of money.
Legal action against an overseas trader is significantly more expensive than against a local trader, and even if you are successful, a judgment may be too difficult to enforce. Before proceeding, obtain legal advice about your prospects of recovering A court order for money to be paid to someone to compensate them for a loss suffered as a result of a civil wrong or breach of contract. For example, a person who caused a serious permanent injury to another person can be ordered by the court to pay damages that compensate the injured person for their loss of income from being unable to work. See also aggravated damages; compensatory damages; general damages; liquidated damages; nominal damages; special damages. and an estimate of your legal costs.