The Business Software Alliance (BSA) has warned consumers that buying software online from unauthorised dealers could seriously damage the health of their computers.

In the run up to Christmas, the BSA said that it has received increasing reports of apparently legitimate software being sold by online auction sites and small software vendors.

Such software is often pirated, bug ridden and may even contain viruses or spyware designed to harvest financial information from users, the industry group warned.

Deanna Slocum, anti-piracy director for Macromedia in Europe, and BSA UK committee member, said: "We are regularly contacted by unhappy consumers who have innocently bought illegal Macromedia products from an auction site or web retailer, and are not therefore eligible for our support services.

"Frequently they have paid nearly the full price for a counterfeit product that is full of bugs that damage their hard drives."

Christmas is traditionally one of the busiest times for online sales of software and other PC products as shoppers seek to avoid high street congestion and save money on gifts.

Research carried out by IDC in July found that 29 per cent of all software used in the UK is pirated.

This is one of the lowest rates in Europe but is still estimated to cost the software industry nearly £1bn a year in lost revenue.

The BSA is sponsored by the major software vendors and aims to crack down on pirated or unlicensed software. It offers rewards of up to £20,000 for reports of legal infractions and prosecutes vendors of illegal software.