The Fair Trading Act (FTA) gives you special rights if you buy products or services on layby or by uninvited direct sales, or you buy extended warranties that fall within the FTA's definitions.

In general you have rights to:

  • a written agreement that is clear, able to be read, and in plain language with all the key information required by the FTA. This should be given to you at the time of sale
  • cancel if you change your mind within certain time frames
  • get the seller to collect unwanted items if it’s a direct uninvited sale or unsolicited product.

Know your rights

The FTA gives you special protection for particular consumer sales. These are:

Layby sales are when the agreement states or implies that:

  • the retailer keeps the products until you’ve paid the full price or the agreed part of it
  • you’ll pay the price in at least three instalments or two instalments by agreement (deposit is included)
  • the price is not more than $15,000.

Your rights include:

  • cancellation at any time before you pay the final instalment verbally or in writing. You are entitled to a refund of your money paid to-date less any cancellation charge based on the seller’s reasonable costs related to the layby, eg storage, loss in value, administration costs
  • the seller can’t charge you interest
  • a copy of the dated agreement at the time of sale with the total price owing
  • you can request a statement at any time with the total purchase price, the amount you’ve paid off, what’s left to pay and any cancellation charges to be provided within 5 working days
  • if the layby products are damaged or destroyed in the shop, it is their responsibility to refund you or provide an identical replacement
  • to complete the sale if the trader is going out of business and you have not missed any payments within the last 3 months.

The following information must also be on the front page of the layby agreement:

  • a clear description of the item you’re buying
  • a summary of your right to cancel the sale, any cancellation charge and the cost or how it will be calculated
  • the shop’s name, street address, phone number and email address.


Uninvited direct sales occur when a seller has come uninvited to your home or workplace (or has phoned you uninvited) and the sale is over $100 or the price is not yet fixed.

It will still be an “uninvited” direct sale even if:

  • you had given your name or contact details to the seller for some other reason, eg competition or a survey and later they came to your home or workplace or phoned you to try to sell you something else
  • the sale happens when you ring them back after they tried unsuccessfully to contact you
  • you had earlier bought something from the seller after inviting them to phone you or to come to your home or workplace that previous time.

Your rights include:

  • a copy of the sales agreement in the required form and content as below
  • cancellation by giving notice to the seller within 5 working days after being given the contract or at any time if the seller didn’t comply with the requirements for the content and form of the agreement (but not if it was only minor)
  • to get your money back if you have paid in full or part, once you have cancelled
  • let the seller take the unwanted products from your address as stated in the agreement at any reasonable time that they request.

The uninvited direct sales agreement should have:

  • clear description of what you’re buying
  • a summary of your right to cancel the agreement
  • the seller’s name, street address, phone number and email address
  • your name and street address.

You must take reasonable care of the products for 10 working days after you give notice that you want to cancel otherwise you may have to pay compensation for loss or damage but not if this resulted from circumstances outside your control.

If the seller provided services and you cancel after the other person has already provided these services, they’re not entitled to be paid. If your property has been changed or damaged, you can require them to return your property to its original condition.

See also:


Extended warranties are any agreement between you and a warrantor (may be the retailer or another company) to provide specific warranties or guarantees usually to replace or repair products or services that you have just bought for a set period of time. You buy an extended warranty at the same time.

Your rights include:

  • The warrantor must make sure you get a written dated copy of the warranty at the time that you buy it with the total price and all the terms and conditions of the warranty, eg rights and obligations, duration and expiry date.
  • Before the agreement is entered into, the warrantor must also tell you verbally about your right to cancel the warranty, and about how you go about cancelling, unless this is not reasonably practical to do so
  • You can cancel by giving notice verbally or in writing to the warrantor within 5 working days after you were given a copy of the warranty, or at any time if you weren’t given full or complete disclosure, unless this was minor. They must then repay you the full price.

The following information must also be on the front page of the warranty document:

  • a comparison of the guarantees under the Consumer Guarantees Act and the protections provided under the extended warranty
  • a summary of your rights and remedies under the Consumer Guarantees Act
  • a summary of your right to cancel the warranty
  • the warrantor’s name, street address, phone number and email address.

See also:

The Fair Trading Act (FTA) has rules in place on how an auction will be conducted lawfully by an auctioneer. An auction is defined as:

  • an offer to sell on behalf of a seller
  • by an auctioneer
  • bids are made in real time in person, by telephone or via the internet
  • the property is sold when the auctioneer indicates.

This does not include online bidding processes such as ‘TradeMe’ or ‘eBay’ which are not auctions, as property is sold directly by a seller to a winning bidder and not through an auctioneer.

Auctioneers must:

  • make a notice of the auction terms readily available before the auction, eg on their web site
  • not to accept vendor bids except as set out below
  • account for and pay the auction proceeds to the vendor following a sale by auction within 10 working days after the sale of any products, other than a sale of land.

Vendor bids are any bids by the vendor or any person acting as an agent for the vendor, usually made by the auctioneer. These are not allowed unless:

  • the terms of the auction specify that vendor bids are permitted
  • the auctioneer clearly identifies each vendor bid as it is given
  • a reserve price has been set and the vendor bid is less than the reserve price.

An auction starts when the auctioneer invites the first bid and ends when the auctioneer makes it clear that bidding is closed. Any bid may be withdrawn before the end of the auction for that item.

Dummy or shill bids

Dummy or shill bids are bids that are made by people who appear to be genuine bidders, but are in fact being made on behalf of the vendor to raise genuine bidding. These are illegal except as outlined above.

See also:


Need more help?

Contact us for more guidance.