What protection do you have if you buy from an online auction site?

If there's one place you're pretty much guaranteed to spot a bargain, it's an online auction site. Ebay is now one of the world's biggest buying and selling portals, with millions of transactions taking place every year. It's the site where you can find the unusual, the essential, and the downright weird, usually at a good price. There are, however, certain risks to take into consideration, which could leave you out of pocket, with sub-standard goods, or even worse, open to online hackers who use sites to access your details.

To protect yourself, you need to exercise a certain amount of caution when buying online, but there are ways that the sites themselves offer a degree of buyer protection too.

What are the risks of online auction sites?

Despite rigorous checks carried out by the sites, there is always the chance that you could be looking at a scam seller. There are organised gangs that try to scam people out of money by offering goods that don't exist, or poor-quality goods that are nothing like the items advertised for sale. Sometimes the buyer doesn't receive anything at all, except a deluge of spam to their email address. And because you're offering a stranger information about you (including payment details), there is always a risk that your identity could be stolen and used by a fraudster.

For sellers, there are also risks that include customers who claim they haven't received the goods and then claim for a refund, being persuaded to end the auction early by a bidder, and unjustified negative feedback that could jeopardise your chances of making future sales.

What are the auction sites doing to stop this?

Let's focus on the daddy of all auction sites, Ebay. With so many transactions flying back and forth every day, Ebay has worked hard to set up a robust policy that should offer a degree of protection to both buyers and sellers using the site. They have what is known as a dispute resolution process', which allows buyers and sellers who have had a bad experience to put forward their case. This is usually as a result of goods that are faulty, poor quality, or don't arrive, and the most usual outcome is that the buyer is refunded.

Originally, this fell under the Buyer Protection policy, but that has since been changed to a Money Back Guarantee policy. Bear in mind, though, that this only applies if you've paid using PayPal into a seller's PayPal account. If you've paid by credit card then you're protected financially, but if you've paid by debit card then you might find it harder to get your money back.

If you want to go down the Money Back Guarantee route then there are stipulations, such as: the problem has to be reported to Ebay within 30 days of receiving the goods (previously you had to wait up to 45 days before you could raise a dispute, so that alone is a step forward).

The Ebay Money Back Guarantee basically reinforces your rights under the Consumer Rights Act to get your money back if the item is broken, does not work in the way described, or is significantly different from the description. Bear in mind, though, that it does not apply to some items such as vehicles.

If you do raise a dispute with Ebay then the seller has up to eight days to respond, and they can either dispute the claim, offer a replacement or refund, or send the original. If nothing is resolved then you can ask Ebay to resolve the issue on your behalf.

Too many complaints against a seller can lead to Ebay withdrawing their account and preventing them from selling, but unfortunately this does not stop that bogus seller from immediately opening a new account under a different name and carrying on.

Using PayPal

One of the best ways to protect yourself (and your money) when buying from online auction sites is to use a PayPal account. This is one of the best ways of protecting your current account and preventing people from skimming your details when you buy online. PayPal is a secure payment site, and as such has a very similar resolution policy as Ebay. Using PayPal means that you can avoid transferring funds directly into someone else's bank account and leaving yourself vulnerable to online fraud.

Our top tips for safe online buying

• Always use strong passwords (random numbers and letters rather than specific words) and never, EVER use the same password for your various accounts. Make sure your PayPal password and Ebay passwords are completely different.
• Always make sure that the link is secure, indicated either by a locked padlock icon, or the web address begins https'. The letter s' stands for secure'.
• Do your research - if a seller has a lot of bad feedback then it may be wise to look elsewhere
• Keep all your online receipts and check your account details after a transaction to make sure your account has been debited (or credited) with the correct amount.
• Never go online without robust antivirus software and a strong firewall in place
• Don't give out any more information about yourself than you absolutely have to.

If you've been the victim of online fraud, you can contact Action Fraud by phone or online. If you have made a purchase or a sale online and are not happy with the way any dispute has been resolved, you should talk to a legal expert who may be able to help you pursue the matter further with either Ebay, PayPal, or the seller/buyer.