What are the risks when buying from a private seller?
1. No consumer law protections
When you buy from a business, the purchase is covered by Australian Consumer Law. There are many guarantees that apply. For example, businesses must not engage in misleading or deceptive conduct. Businesses must ensure that an item sold is fit for purpose and of acceptable quality. When providing services, the service must be provided with due care and skill.
When a person sells items, they are not engaged in a business. When you buy a from a person (known as private seller), you are not protected by consumer law guarantees. The seller is not required to tell you about any problems. Items are generally sold on a “as is” basis. The principle of “buyer beware applies”. This means that the buyer is responsible for doing reasonable checks before making the purchase.
For example, when buying a car, the law expects the buyer to do a pre-purchase check (for example you can get a mechanic to check the car) and to do a PPSR check (to check if a loan has been taken and not repaid).
Even if there are no consumer guarantees, the seller’s promises during the negotiation can form a binding agreement. It is important to keep a record of what the seller promises you about the item.
2. Fraud and scams
It is important to be vigilant because the person that you are contacting on facebook marketplace is a stranger.
Exercise caution if you are being asked to transfer money to a person you have not met to secure an amazing deal. After transferring the money, the other person may disappear, leaving you without your money and the item.
Additionally, it can be difficult to verify if the seller has the right to sell the item.
How can you protect yourself when buying from a private seller?
You can take these steps to reduce the risks and ensure that you have the most legal protection.
- Research the seller thoroughly: Check the seller’s profile for authenticity – look for a well-established account with a history of sales and positive reviews. Use the platform’s messaging system to communicate and avoid moving to less secure channels like SMS or email. Search the seller’s name, email, and phone number online for reports of scams or fraud.
- Inspect the item in person: Arrange to meet the seller in a public place, preferably one monitored by CCTV. Thoroughly inspect the item. For cars, bring a mechanic if possible or arrange for an independent inspection. For electronics, test all functions, check serial numbers, and verify accessories. Ask for original receipts, documentation, warranties, manuals, and proof of ownership.
- Confirm ownership and authenticity: For vehicles, check that the seller’s name matches the registration, verify the Vehicle Identification Number (VIN), and complete a PPSR search. Ensure that a notice of disposal is completed so that you can transfer the registration into your name.
- Document everything: Record your communications with the seller, including all details discussed about the item’s condition, price, and terms of sale. Create a written agreement outlining the item, price, parties’ details, date, and any promises made (such as the item’s working condition). Take photos or videos of the item at the time of purchase to document its condition.
- Be wary of red flags: If the deal sounds too good to be true, it probably is. Be skeptical if the seller is unwilling to meet in person, hurries you to decide, or will not provide proof of ownership or identity. Walk away if anything about the transaction feels off or if the seller refuses to answer reasonable questions.
Can you please provide some example scenarios when buying from a private seller?
Scenario 1
You come across a Facebook ad for a four-year-old car. The seller says that the car is mechanically excellent. You buy the car. The car breaks down the next day. You take a car to the mechanic. The mechanic checks the car and finds that the transmission was already broken when you bought the car.
In this example, the seller can be held accountable for breaking the agreement which is that the car is supposed to be mechanically excellent. You did not have evidence that the seller has made the promise (such as screenshots from the Facebook marketplace ad or communication with the seller). You start court proceedings for breach of contract but the court found that you failed to show that the seller made promises about the condition of the car.
Scenario 2
Jane agreed to exchange tickets to a music festival for an iPhone 12. You meet Jane and give her a copy of your ID (because the tickets are linked to your name).
One month later, you are being contacted by a man named Kamal in Newcastle. He says that you scammed him. You ask him more about it. He says that he paid you $1,000 for Taylor Swift tickets. The person he paid money to appears to have sent him a photo of your licence.
Three months later, police attend your home. Police say that Kamal has reported his iPhone has stolen. Police tracked the stolen iPhone to your address. Police are also asking you questions about a ticket scam. You cannot locate Jane’s profile because it has been deleted. Police seized the stolen iPhone and returned it to Kamal.
In this example, you and the police cannot find Jane. You don’t know if Jane is the person’s actual name. This limits your ability to take legal action against Jane.
Conclusion
By understanding the risks, carrying reasonable checks, using secure payment methods, and documenting the transaction, you can significantly reduce potential pitfalls and ensure you are legally protected. Always remember: it is better to lose a deal than to lose your money or your peace of mind.
If you have are experiencing problems with a private seller, please obtain specific legal advice by clicking on the I need legal advice button on our website.
Information accurate as of 1st September 2025. The information above is not legal advice. If you have a legal issue, please get specific legal advice.
