You have limited rights if products are faulty

When you buy something privately, you enter into a binding sale agreement and you should remember ‘buyer beware’. So examine any items carefully first. You buy second-hand products ‘as seen’, including any flaws or wear and tear. Ask the seller to point out any damage or faults.

You still have limited rights if the products are faulty or not as described, or the seller is not the owner, but it is harder to get a remedy. Private sales include online sales through Trade Me or Facebook, auctions, classified adverts and fairs.

Checklist before you buy

Before you buy, it is a good idea to:

• see if the products have a current manufacturer’s warranty on them that you can take over
• ask the seller questions about the product’s age, any wear and tear or faults (for any items sold online) – keep a copy of their answers
• ask the seller if they kept the original receipt or a copy of it
• get an independent expert to check out any big items (eg a mechanic if it is a vehicle)
• search for money owing on the item on the electronic Personal Property Securities Register (PPSR).

Searching the PPSR

You can search the PPSR by number plate (for vehicles) or by the seller’s name. If there is a valid registered security interest, a finance company could repossess the item from you.

Security interests include credit sales where you buy products on finance (hire purchase agreements), long-term leases over more than a year and loans that have personal property as security, such as car loans. If there is a registered security interest on the PPSR, go back to the seller and get them to pay the money owing to clear the security interest.

Read about Searching the PPSR(external link) on the Companies Office website.

Buying second-hand from a dealer

You have the same rights if you buy second-hand products from an online trader or second-hand dealer as you would buying new, under the Consumer Guarantees Act. However, you can’t expect second-hand products to be of the same standard as new products. Their quality depends on the price you paid and how the products are described. Make sure the item does what you expect it to do.

Read Faulty products to find out more.

Know your rights

Generally, when you buy products or services privately you can’t cancel the contract easily and you have limited legal rights. Private sales aren’t covered by the Consumer Guarantees Act or the Fair Trading Act.

You do have rights if the seller misled you, they don’t have a right to sell the products, or the item is seriously faulty or unsafe.

Remedies under the Contract and Commercial Law Act

You may be able to get a full or partial refund, or compensation under the warranties implied in the Contract and Commercial Law Act (CCLA). Your choice of remedy depends on how serious the problem is.

The product must:

• match either the sample shown or the description given by the seller
• be sold at a reasonable price if this has not been agreed beforehand
• be delivered within a reasonable time if no timeframe was agreed beforehand and delivery is part of the sales contract.

The seller also must have good title, which means the right to sell those products.

If you are entitled to a refund, it should be in cash (not a credit note). You can choose to accept a replacement or repair instead of a refund or compensation.

But, a seller can also state that the CCLA doesn’t apply. They can state this in the contract at the time of sale or in the website terms and conditions. Look out for a written statement that says ‘No other warranties either express or implied by law are made with respect to these products’.

Electrical appliances and other regulated products

Electrical appliances must be safe even when sold second-hand by a private seller under the Electricity Act. Get them checked out by an expert or qualified person if you can.

Also, certain regulated products, even if second-hand, must comply with Product Safety Standards and Unsafe Goods Notices under the Fair Trading Act.

Read Product safety and consumer information standards to find out more.

Making a claim for breach of contract

You may be able to make a claim to the Disputes Tribunal for breach of contract under the common law rules for contracts and obtain compensation.

Read Changing contracts or quotes to find out more.

False or misleading statements by the seller

If a seller makes a false or misleading statement, you can cancel the contract or claim compensation under the CCLA if:

• the false or misleading statement was serious
• you were persuaded to buy the products based on the statement.

Read False and misleading advertising or trading to find out more.

Money owing

If you bought something and the seller still owes money on it, the creditor may be able to repossess the products if:

• the item was worth more than $2,000 when the seller originally bought it or used it as security to take out a loan
• you knew about the security interest when you bought the products.

If the creditor does repossess and sell the products, you may be able to make a claim against the seller for a breach of the CCLA, if you were not told about the security interest.

Buying second-hand from a business

Under the Consumer Guarantees Act (CGA), you have more legal rights if you buy from a second-hand dealer or a charity shop than if you buy from a private seller.  However if you received items from a charitable organisation and the main purpose is for your benefit, then you are not covered by the CGA guarantees.

Anyone in business who deals in second-hand products or scrap metal has to be licensed, apart from charity shops. To find out if a business has a licence, check the public register of the Licensing Authority of Second-hand Dealers and Pawnbrokers(external link) on the Ministry of Justice website.

You can expect any second-hand products to be fit for purpose, safe, free from defects, look acceptable, and last for a reasonable amount of time. But you can’t expect them to be the same as new products. Whether they are of acceptable quality depends on how much you paid for the products, what you were told about them, and their general wear and tear.

If the item turns out to be faulty, you have the right to return it to the shop where you bought it and ask for a replacement, a repair or a refund. You can also claim compensation to cover any reasonable costs you incurred because of a fault or any late delivery, such as the cost of hiring a replacement item.

If you were misled by false information, you also have the right to cancel or vary the contract and claim compensation under the Fair Trading Act.

See also:

• Faulty products
• False and misleading advertising or trading

If you have a problem with any second-hand products, you have different rights depending on whether you bought the products from a private seller or a dealer. You have rights for repairs, replacement or a refund under the Consumer Guarantees Act or compensation under the Fair Trading Act, if you buy from a second-hand dealer. You have rights to cancel the sale and/or get damages under the Contract and Commercial Law Act if you buy privately.

Contact the private seller or second-hand dealer first

If you have a problem with a private seller or second-hand dealer, try to negotiate to cancel the sale or reduce the price if:

• you have been misled
• the products or services are faulty or unsafe
• the seller did not have the right to sell those products.

Read Resolve a problem.

How to search for money owing

You can search online against the seller’s name or a serial number of a vehicle for a very small fee on the Personal Property Security Register on the PPSR website(external link). For motor vehicle searches, you can complete the first stage of your search via your mobile phone using their TXTB4UBUY service(external link).

Next steps

If you are unable to resolve your issue directly with the retailer, manufacturer or service provider, our Resolve It tool has information to help you take the next steps. These may include going to the Disputes Tribunal or District Court.

>  Resolve it: Faulty products and services

Get some advice

Need more help? Contact the Ministry of Business Innovation and Employment (MBIE)’s Consumer helpline.

Common situations

Fake goods

Mark is selling his smartphone on Trade Me and describes it as a popular and expensive brand. Jack buys the phone for $300 but finds out when he gets it that it is in fact a counterfeit brand worth only $100. As Jack was misled, he can cancel the sale and ask for a refund from Mark directly. He can also get assistance from Trade Me to resolve the issue and place feedback on the seller. If he has no success, he can make a claim to the Disputes Tribunal.

Money owing

Aria buys a used Mazda car for $5,000 from a local dealer who is selling on behalf of the private owner. The CIN does not show any money owing. A month later, a repossession agent comes knocking on her door to claim the vehicle on behalf of a finance company. Aria checks the PPSR register and finds out the finance company does have a registered security interest over the car, so they can legally take the car. Aria will have to go back to the dealer to get her money back as dealers are legally responsible for checking the CIN is correct.

Unsafe products from a charity shop

Janet buys an electrical toaster from a charity shop for home. A few weeks later it catches fire. Janet is able to get a refund from the charity shop, as the toaster was unsafe.