Establish who is selling the good or service, including details of the trader's business: physical address; business registration details (e.g. business name and/or ACN/ABN number) and contact details.

The Australian Securities & Investments Commission (ASIC) has a free service on its website at www.asic.gov.au allowing users to search for registered business names. ACN and ABN numbers of Australian organisations are located at www.search.asic.gov.au/gns001.html.

Knowing the full details of the transaction before entering into an agreement with the trader will help you to know what to expect if you buy the good or service. Details you should obtain include:

Always check for a privacy policy on the trader's website. The policy should outline why the trader collects your personal information and how that information will be used. Traders might want to use your personal information for marketing purposes or even to sell it to third parties. The trader's privacy policy should tell you if this is so. If there is no privacy policy on the trader's website then you should be concerned, because the trader is not informing you of what will happen to any personal information that you submit.

Consumers often use credit cards when shopping online. This involves having to submit your credit card details over the internet. The nature of the internet means that transmitted information may be intercepted by a third party. In order to minimise the risk, you should make sure that the trader is using a secure system for transferring information during a transaction. The most common method of security used in online shopping is the Secure Sockets Layer (SSL) technology. SSL technology encrypts data transmitted in order to protect the information being sent, including your credit card details.

An unbroken key or padlock at the bottom of your web browser will indicate whether there is a secure connection, and whether the information you will send will be encrypted. To obtain information about the security used by the website, you can double-click on the unbroken key or padlock.

Internet auction sites (e.g. eBay) provide a mechanism for individuals to enter into transactions with each other, often referred to as consumer-to-consumer (C2C) transactions.

If the website operator has control over the goods being auctioned it is likely to be regarded as a business-to-consumer (B2C) transaction. If the website is acting as a trading centre it is more likely to be a C2C transaction provided that the vendor is not a business using the site to clear stock. C2C transactions conducted through internet auctions may be regarded as private sales between individuals, and not as trade or commerce (and therefore not caught by the TPA). This does not mean that the consumer has no rights in this situation, but they have fewer rights than if consumer protection laws applied.

If you buy a good or service through an internet auction and consumer protection laws do apply (because you bought from a business or in the course of trade or commerce) you may still have lower protection than if you had not bought the item at an auction. This is because some of the implied conditions and warranties (as discussed above) do not apply when the goods are purchased at an auction. The specific law varies from state to state. For example, in Victoria, according to the Goods Act 1958 (Vic), goods bought at auction should be of merchantable quality and match the description given or sample shown.

Read the auction site's terms and conditions, policies and rules, to understand the service the auction site is providing and what to expect. If there is a "how to use" tutorial on the auction website, take it in order to familiarise yourself with the services offered. Look at how fraud and complaints are handled by the auction site. Some auction sites offer protection to successful bidders in the form of free insurance of up to a specified amount when things go wrong, e.g. if the item purchased is not delivered. Verify the seller's identity and contact details.

Make arrangements with the seller about what to do if there is a problem. If you have any queries, contact the seller for answers. If their answers are unsatisfactory, do not make a bid.

Check for any feedback comments or ratings about the seller on the internet auction website. Comments from previous purchasers will help you decide whether to participate in the auction.

Know the product that interests you. Look at the market or retail price, written descriptions and any photographs of the product, and any warranties.

Find out the terms of sale, including who pays for shipping and handling; whether there is insurance, what it covers, who pays for it and what it costs; whether there is a return policy; and what payment mechanism can be used.

Set the maximum price that you are willing to pay for the good and do not exceed that price in your bid. The maximum price will include all costs, including items like insurance, taxes, shipping and handling. Setting limits on what you are willing to pay will help to prevent you from bidding excessive amounts for an item where its bidding price has been inflated by fake bids. Although fake bids are not allowed by auction websites, such activities do occur and are a concern.

A good method of payment when shopping online is to pay the supplier when the product has been delivered (cash on delivery). If the seller does not agree to such an arrangement, then a credit card should be used, because of the "charge-back" service that many financial institutions attach to their credit cards (reversing the card charge if the seller fails to deliver the product).

Sending a bank cheque or money order before receiving goods exposes you to higher risks of fraud. If sellers will not send the product unless there is such a payment, then you have to be willing to take the risk.

PayPal is an electronic payment system commonly used on auction sites and is essentially an alternative to cheques or money orders. The recipient of a PayPal payment gets a financial transfer from PayPal, which processes payments for a fee.

An alternative is to use an escrow agent. The escrow agent's role is to hold the payment for the buyer until they receive the product. Escrow agents are used to protect both parties from fraud, and usually charge the buyer a percentage of the cost of the product for the service. If you use an escrow agent you should be familiar with the terms of the service offered, and check to see whether the agent is reputable.

Always keep records, either by saving on your computer or printing out details of the transaction, including the product description (written and photograph), the seller's identification, every bid made, all emails between you and the seller and every receipt/record provided.

Consider using insurance offered by the auction site or another organisation, to protect yourself if something goes wrong.

Relatively few complaints concerning internet auctions have come before the courts. However, in 2001 VCAT previously determined that hosting online auctions is providing a service. This means that a complaint in relation to the provision of this service can be regarded as a fair trading dispute under section 107 of the Fair Trading Act 1999 (Vic) ("FTA") (see Evagora v eBay Australia and New Zealand Pty Ltd [2001] VCAT 49). This decision appears to be precedent for bringing an action at VCAT alleging breaches of the FTA. For further information, see: Chapter 12 Consumers and Contracts.

When you buy a good or service over the internet from an overseas trader, it can be uncertain whether Australian consumer protection laws apply or whether an Australian court has any jurisdiction. The TPA applies to overseas traders carrying on business in Australia, but it is not clear whether this includes sales made over the internet by overseas traders.

If an internet overseas trader is found to have been carrying on business in Australia, then Australian consumer protection laws will apply, even if the contract states otherwise, e.g. "This contract is governed by the laws of California". If there is no Australian consumer protection (i.e. the trader is found not to have been carrying on business in Australia), then only the consumer protection laws of the trader's country (if any) will apply. These may offer you lesser rights than if you had purchased the good or service within Australia.

Note: Even if Australian consumer protection laws apply and an Australian court has jurisdiction over an overseas trader, it may be too difficult and/or too expensive to enforce a judgment against a trader who has no assets in Australia.

When overseas traders supply physical goods to consumers, the Australian Customs Service (ACS) checks the goods in order to decide whether they should be cleared for entry. Imported goods that are prohibited or restricted are seized, and others may require a permit. Imported goods may also be subject to customs duty. The ACS classification of the good, and the country of origin, is relevant in determining the rate of duty payable by the importer (the consumer).

In addition, the ACS levies a Goods and Services Tax (GST) on imports. Low value thresholds apply. The method of ordering (electronic, phone or mail) does not affect whether GST is payable.

Find out from the ACS whether you can legally import the good you wish to buy, and whether it is subject to GST or any other taxes.

Goods bought from overseas can have significant delivery expenses, so always check the delivery charges carefully.

Overseas traders may not list the purchase price in Australian dollars, so you should do the conversion.

Always check the overseas trader's website for any terms and conditions that state which country's laws apply, and which country's courts would be relevant to your bringing an action in case of dispute. It is common practice for an overseas trader to designate the law and courts as being in the country in which the business is located. However, as noted earlier, there is some legal uncertainty in this area.

Contact the trader (in internet auction purchases, the seller) to try to resolve the dispute, via telephone, fax, post or email. Explain the problem and what you want (e.g. a refund, or return of the goods). Keep records of all your communications with the trader. It is recommended that you write a letter so that there is a record of your complaint, which can be used if further action is taken.

For help in writing a complaint letter, follow the "How to make a complaint or solve a consumer problem" link (from the consumer assistance portal) on the Australian Competition and Consumer Commission (ACCC) website at www.accc.gov.au.

If you purchased the good or service with a payment card (e.g. credit card, debit card, stored value card), there may be protections available for you. For example, some credit cards have a "charge-back" facility (see: "Bidding at an internet auction", above).

Many traders are members of an industry body or association that follows a code of conduct. If the trader at issue belongs, that organisation may be able to help resolve your dispute.

The ACCC's Consumer and Business Directory (CBD) (available by going to www.accc.gov.au) allows you to search for the contact details of community and government organisations that offer consumer and business complaint-handling services and includes industry associations, businesses, government agencies and independent mediation services. (The CBD incorporates contacts previously listed in the Australian Consumer Handbook Online).

If the trader is based overseas, the relevant consumer protection agency of that country may be able to advise you whether the trader belongs to an appropriate organisation.

If the problem is not resolved, contact the Consumer Affairs/Fair Trading agency for the state or territory where the trader is located (see: "Further information", below). If you are in a different state or territory from the trader, you can also contact the ACCC. The ACCC may also be able to help you if the trader is overseas. When dealing with overseas traders you can also visit www.econsumer.gov, a joint project of consumer protection agencies from around the world that provides information for international consumers and facilitates cross-border complaints.

If your dispute has not been resolved, you may want to take your matter to the relevant court or tribunal. However, legal action can be costly and may only be worth pursuing if the dispute concerns a significant sum of money. Legal action against an overseas trader is significantly more expensive than against a local trader, and even if you are successful a judgment may be too difficult to enforce.

Before proceeding with legal action obtain specific advice as to your prospects of recovering damages and a likely estimate of your legal costs.