When buying from a trader you have the same rights as when buying from a shop – goods must be of satisfactory quality, fit for purpose, and as described (see Buying Rights for more). So if there's an undisclosed fault, you can send it back for a full refund. If a fault has been disclosed though – eg, "showing signs of wear" – then so long as that's a fair description you can't get a refund.
Having said that, thanks to the Consumer Contracts Regulations, when buying online from a trader you have 14 days to cancel your purchase and a further 14 days to return it, at your own expense, if you change your mind for any reason (though this doesn't apply if you bought on eBay in a bidding-style auction).
One other source of protection is Section 75 of the Consumer Credit Act 1974. If you pay directly for even part of the phone on a credit card and it cost more than £100, your card provider's equally liable if something goes wrong – useful extra protection especially with smaller firms. PayPal purchases aren't covered though, even if the money comes directly from a credit card linked to your PayPal account.