Sandra Young thought she’d found a bargain when she placed the winning bid on a Dell laptop at online auction website GraysOnline. Her winning bid was $799, to which was added commission, GST and freight – all up Sandra paid $950.

Unfortunately, the laptop died just four days after it was delivered. Taking it to a local computer store for analysis, Sandra was told the motherboard was dead – and that it would cost more than the computer was worth to fix. According to the serial number of the computer, it was only two months old when it died.

Unhappy with paying $950 for four days of computing, Sandra went back to GraysOnline and Dell to see what could be done. Dell simply said: “You don’t have a warranty for the computer.” GraysOnline reminded her that she had had five days from the time of purchase to return the computer and hadn’t done so. It also said the computer didn’t have a warranty and that she had had the option of buying a one-year warranty from Dell at the time of purchase for $283 (incidentally a three-year warranty on a new Dell computer is cheaper at $243).

GraysOnline lists its Dell computers as “new”, “resealed” and “faulty”. The Dell laptop Sandra bought was listed as “resealed”, which GraysOnline describes as “may have been removed from its packaging by the manufacturer for testing or other purposes, or may have been opened and returned by a customer with little or no use”.

Frustrated, Sandra got in touch with us to clarify her consumer rights. But we had to tell her she had few rights – because of this country’s archaic laws on online auctions.

Legal confusion

If Sandra had bought her computer from a store, she’d have protection under the Consumer Guarantees Act (CGA): the computer would have to be fit for purpose and of reasonable quality. Regardless of whether she had a warranty, she would be entitled to a repair, replacement, or full refund. But because Sandra bid for her computer in an online auction, she had none of those protections (see Your rights).

Sandra would be protected by the CGA if she had bought the computer at a fixed price – like a “Buy Now” price – at an online auction site. This is because the transaction is then not an auction; it’s simply an online sale. But by the simple act of bidding, a transaction becomes an auction and so Sandra’s rights go up in smoke … much like the computer she bought.

Sole exception

Since the CGA doesn’t apply to auctions, the only consumer protection is the Fair Trading Act. This says that “all representations must accurately convey the condition or history of the goods being sold”. Or in plain English: the description of the goods mustn’t mislead the customer.

We asked GraysOnline to confirm that the computer Sandra bought wasn’t mislabelled or misrepresented – surely a computer that dies within a week must be faulty and therefore the description must have been misleading?

But GraysOnline says it tests every computer it auctions using an internationally recognised diagnostic tool – and the report came back clean. GraysOnline provided us with a copy of this report and, sure enough, the computer was functional and fault-free at the time of sale. It seems an unfortunate piece of timing that Sandra’s computer failed less than a week later.

The putting right

Now for some good news. GraysOnline has agreed to give Sandra a full refund on the failed computer – something it doesn’t have to do legally. We wish all traders had this attitude to righting wrongs regardless of their legal position.