What do I need to know before buying goods at an auction?

When you buy at an auction, there are certain things that you need to know.

An auction sale is a contract. If you make the final bid and that is accepted by the auctioneer then you have entered into a legal agreement to buy the goods, even though there may be no written agreement yet.

An auction house must make the terms of sale clear to the bidders at the time of the sale or before the auction commences. Terms can include that the goods must be collected on the same day or that payment must be in cash or by bank cheque.

If the seller (on whose behalf the auctioneer is selling consumer goods) is a trader then your purchase is covered by the Consumer Guarantees Act and the Fair Trading Act.

For more information about your rights when buying in an auction read on.

Back to top

What are my rights when buying goods through a registered auctioneer?

A registered auctioneer is someone who sells goods or services by auction on behalf of a seller  and charges a commission or other payment for that service, and is registered under the Auctioneers Act 2013.

From 17 June 2014 and for auctions which take place via a registered auctioneer, your rights include:
  • You can withdraw your bid before the end of the auction.
  • The auctioneer must display a ‘notice of terms’ before the auction and for the duration of it, which tells you whether there is a reserve price, whether the seller or their agent can make bids (called ‘vendor bids’) and whether the vendor is a trader.
  • If the consumer goods you buy are sold on behalf of a trader, then you are generally covered by the Consumer Guarantees Act. If the goods you have bought turn out to be faulty, you can complain to the trader, whose contact details should be on the notice of terms or the auction sale and purchase agreement.

Back to top

Are auctioneers allowed to make vendor bids?

A vendor bid is a bid that is made by the seller or someone acting on their behalf (e.g. an agent or auctioneer).

Vendor bids are allowed if:

  • The notice of auction states that vendor bids are allowed 
  • A reserve price has been set
  • The vendor bid is less than the reserve price
  • The auctioneer clearly identifies each vendor bid when one is made during the auction

Back to top

What are my rights when buying goods in an online auction?

If the auction is run by an auctioneer, read What are my rights when buying goods through a registered auctioneer? to find out what your rights are.

Where an auctioneer is not involved (e.g. if you bid on something in a TradeMe auction), your rights are similar to those you'd have if you buy from a seller without using a bidding process:

Consumer Protection (Ministry of Business, Innovation and Employment) also has information about your rights when you buy from a private seller in an online auction, or at an auction house.

Back to top

How can I tell if I’m buying from a trader?

From 17 June 2014 traders have to identify themselves as such when they offer goods or services for auction, so that consumers will know they are covered by the Fair Trading Act and the Consumer Guarantees Act.

It will be the responsibility of the intermediary (e.g. the online auction site to make sure their participants who are in trade declare themselves as traders. 

If you suspect a seller is a trader but not identifying themselves as such, read the information on our Online sellers page.

Back to top

Who can I complain to if I believe the auctioneer has broken the law relating to the auction process?

You can report them to the Commerce Commission if you think an auctioneer or auction house has breached the law in regard to how the auction has been run. Information about how to do this is on the Commerce Commission website.

If you have suffered financial loss as a result of the auctioneer’s conduct you can take the matter to the Disputes Tribunal.

Under the Auctioneers Act, all auctioneers must be on the Auctioneer’s Register. You can search the Registers to check whether an auctioneer is listed. You can report an unregistered auctioneer to the Commerce Commission, or contact AANZ for advice.