Consumers are to be better informed of their rights when using internet auction websites.

The Office of Fair Trading (OFT) has persuaded a number of sites, including Ebay and Ebid, to make consumers and businesses more aware of their rights or obligations under UK consumer statutory laws.

A study conducted by the OFT in June this year found that some traders using online auctions were failing to identify themselves as businesses and buyers were unable to get redress under consumer law.

This is partly because many of the individuals who either buy in goods or make them to sell on such sites do not realise they are considered to be 'sole traders'.

Sellers and some small businesses often have no idea they are also bound by consumer laws such as the Sale of Goods Act (SoG) and the Distance Selling Regulations (DSRs), or simply refuse to abide by them.

Another problem for both buyers and sellers is that the rights consumers have vary because of the different types of sale available, such as instant sales and auctions.

As well as giving more information about consumer rights, the auction websites have also agreed to inform businesses that operate through them of their legal obligations under the Electronic Commerce Regulations from which UK consumer law is taken.

Steve Lisseter, head of the internet shopping study team at the OFT, said: " We welcome the efforts made by these online auction sites to raise awareness of consumers’ rights, and we are also very encouraged by the work they are doing to ensure that businesses using their sites are fully aware of their legal obligations."

A consumer's rights vary depending on the type of sale at an online auction site. If the 'Buy-it-now' on Ebay or 'instant sales' feature is used, even during an auction, the sale isn't considered to be part of an auction.

For these sales the SoG applies; goods must match the description, be of satisfactory quality, and fit for purpose. If the goods do not meet these standards, the shopper has every right to return them for a repair, replacement or refund.

The DSRs also apply so the shopper has the right to cancel for any reason. When a sale has involved bidding for an item it is classified as an auction. With these sales the SoG also applies whether the goods are second-hand or new.

However, if there is a problem with second-hand goods you do need to take into account the price you paid, shouldn't necessarily expect the goods to be of perfect quality and tailor your expectations of performance accordingly.

Consumers are warned that the DSRs do not apply to online auctions. The Department for Business, Enterprise and Regulatory Reform (DBERR) consider that the DSRs do not apply to internet auctions of the type considered here. However, as yet, there is no UK case law to confirm this position.

Advice for consumers on their rights when shopping online, and for help when buying from online auction sites, can be obtained from Consumer Direct on 08454 040506 or at its website.

Tips in discerning if a seller is a sole trader or business include looking at the amount of feedback, if they are a Powerseller and for links to a 'shop' within the website.

Sellers can get advice on sole trader status by visiting Her Majesty's Revenue and Customs website. The OFT has published advice for businesses on DSRs and other laws which apply to internet selling.