Following changes that came into effect from 17 June 2014, sellers must be clear if they are “in trade” when they sell items online.  This helps consumers know what rights are available to them. If sellers fail to clarify their trader status, they risk being penalised by the Commerce Commission.

Sellers will need to work out whether they are “in trade” or not.

You are probably “in trade” if you:

• Regularly sell;
• Buy things just to sell them; or
• Are GST registered.

If you are a seller who is “in trade”, sites such as TradeMe have introduced new labels which you can set up to appear next to your username so that other users can see that you are a Trader. This makes it easy to comply with the recent changes to consumer laws.

Where a seller is in trade, consumers will have extra rights under the Fair Trading Act (“FTA”) and Consumer Guarantees Act (“CGA”).

The FTA creates rules restricting what traders can say and do when selling goods and services. Traders may not make claims they cannot substantiate. They must also not mislead consumers. Any breach of the FTA is serious – penalties for individual traders are up to $200,000, and for body corporate traders can be as much as $600,000.

Under the CGA, several guarantees are implied by law when goods or services are sold.

Guarantees for goods under the CGA include that goods are:

• Of acceptable quality (do what they are supposed to, look acceptable, are free of defects, are safe and durable);
• Fit for purpose;
• Match their advertised description;
• Match any sample model; and
• Will be owned by the consumer once purchased.

If the CGA applies to services, those must be:

• Performed with reasonable care and skill;
• Fit for purpose; and
• Completed within a reasonable time.

 

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