Consumer Protection Laws
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 ACL 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.
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.
Australian Customs Service and GST
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.
Further Tips When Purchasing from Overseas
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.
The internet is subject to fraud just like the offline world. Because the internet allows for cross-border transactions it may be difficult to seek redress if you suffer an online fraud. When shopping online, it is wise to be particularly alert to potential scams.
Your options when things go wrong
Contact the Trader
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.
Contact your Payment Card Provider
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).
Contact and Industry Body or Professional Association
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) 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.
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.
Seek Help from a Consumer Protection Agency
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.
Take Legal Action
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 toenforce.
Before proceeding with legal action obtain specific advice as to your prospects of recovering damages and a likely estimate of your legal costs.