Auctions have always been a popular sales technique, used to sell many types of goods from small household items through to cars and houses.
There are many different bidding processes that are referred to as auctions. This guidance only applies to auctions conducted by auctioneers. Auctions such as those on websites like Trade Me are not covered by this guidance. This is because in an online auction, goods are sold directly by a seller to a winning bidder and not through an auctioneer.
See buying online for information about buying from online platforms.
Your consumer rights
You have rights when buying at auction, provided the seller themselves (not the auctioneer) is in trade. A person is in trade if they:
regularly or habitually offer to sell goods or services
make, buy or obtain goods with the intention of selling them
are GST registered
have staff or assistants to help manage their sales
have incorporated a company or set up another type of trading vehicle.
Under the Consumer Guarantees Act, goods must:
be of acceptable quality
be fit for a particular purpose
arrive on time and in good condition
match the description
be supported by available spare parts and repair facilities (by manufacturers).
a notice of auction terms must be available for you to view before and during the auction
the auction starts when the auctioneer invites the first bid and ends when the auctioneer makes it clear the bidding is closed
a bid can be withdrawn at any time before the end of the auction
vendor bidding is allowed in certain situations
an item is considered to be sold at auction if it is unsold at the end of the auction but the auctioneer accepts an offer from a customer who attended the auction within 1 working day of the auction.
Notice of auction terms
The terms of the auction must be readily available to you before and during the auction – this could be a notice at the entrance of an auction room, brochures of the terms available, or on a website.
The notice of auction terms must be in writing and include:
if any reserve price applies
if vendor bids are allowed
if the vendor is in trade (this only applies to property that is usually purchased for personal, domestic or household use).
A vendor bid is a bid made by the seller or any person on their behalf (including an agent or auctioneer). Auctioneers can accept a vendor bid during an auction where:
the notice of auction terms specifies that vendor bids are permitted (for that lot)
a reserve price is set
the vendor bid is below the reserve price
the auctioneer clearly identifies each vendor bid when it is made during the auction.
Auctioneers should clearly identify vendor bids; for example, the “seller is bidding” or “vendor bid”.
If you think that you have been misled at an auction, you can make a complaint to us. Call us on 0800 943 600 or make a complaint online.
The Commission’s role
We enforce the Fair Trading Act which gives consumers rights and sets rules businesses must comply with. The Commission can investigate a business and take enforcement action where the rules have been broken.