Consumer Council Urges Enactment of Consumer Protection Statutes
(January 31, 2012)
The call for the enactment of statutes to
safeguard a free market competition and to regulate the sales of
first-hand properties is high on the agenda of the Consumer Council
this year.
Competition
Bill
The Consumer Council urges Legislators to
support the enactment of Competition Bill to safeguard and foster
competition, and to combat anti-competitive practices in the
market.
"Over the years, the Council has been
advocating legislations to enhance consumer protection," said Prof.
Anthony Cheung Bing-leung, Chairman of the Council, "With a
competition law in place, anti-competitive behaviour in Hong Kong
will be prohibited and consumers will benefit from better prices,
wider choices of quality goods and improved services. We hope the
Competition Bill will be passed within this legislative
session."
In the past year, the Council continued its
effort to reach out to the public and the trade to explain the
significance of a competition law to consumers at large, as well as
to small and medium enterprises (SMEs). A forum for the SMEs was
held in December 2011.
Legislation on first-hand sales of
residential properties
Speaking at the year-end review, Prof.
Cheung also commented on the government's recent White Bill on the
regulation of the sales of first-hand residential
properties.
Prof. Cheung said the Consumer Council
welcomed the Government's move in introducing the White Bill for
public consultation on the subject, which was a significant move to
step up measures to protect the interest of prospective buyers of
residential flats. The Council has been a strong advocate of such
regulation over the past several years.
The Council appreciates the positive
aspects of the proposed legislation which forbids misrepresentation
and dissemination of false or misleading information in the sale of
properties, and considers that transparency, fairness and orderly
sales arrangements should be basic considerations in regulating the
first-hand residential property market.
Prof. Cheung stressed, "The paramount goal
of the proposed statue is to protect consumers who are making what
is likely to be the single most expensive purchase in their
life."
Consumer complaints down in some
major sectors
The Council's annual review on the
complaint statistics in 2011 showed that a total of 27,541 cases
were recorded, a slight decrease of 5% in comparison with the
previous year. This is an encouraging sign. However, certain
sectors remain areas of concern.
Complaints on telecommunication services
(7,233 cases) and on broadcasting services (1,338 cases) both
recorded a double-digit decrease. The former mainly involved
charges and contract disputes while the latter concerned largely
pay TV, going down by 20% and 28% respectively.
Commenting on the downfall in both
complaint categories, Prof. Cheung affirmed that the continuous
effort of the Council on consumer education with concerted actions
taken by the regulatory authorities and the trades had proved to be
effective in reducing undesirable sale practices.
The implementation of Industry Code of
Practice for Telecommunications Service Contracts in mid 2011, in
response to the Council's studies on service contracts of mobile
services and roaming charges, as well as the effort of the
regulatory authority, has also provided better protection to
consumers when they subscribe to telecommunications services. "It
is a positive result after long discussions among relevant
parties," said Prof. Cheung.
Also on the decline in the top 5 categories
were complaints about telecommunication equipment (1,724 cases,
down 13%) and electrical appliances (1,511 cases, down
14%).
Overall tourist complaints - which
accounted for 8.5% of total complaints - recorded an increase of
15% to 2,342 cases. Although complaints from Mainland tourists went
up by 20% to 1,698 cases on one hand, a sharp decrease by 82% to
only 49 cases was registered in complaints lodged by Mainland group
travelers on the other. Disputes often involved sales practices,
prices and quality of goods.
Dramatic increase in infant
formulas complaints
The year also saw a dramatic increase in
complaints related to infant formulas, which rose sharply to 194
cases, a 173% increase compared with 71 cases in 2010. 70% of the
complaints (138 cases) were concerned with price disputes, supplies
being out-of-stock and the quality of products.
Frustrated by the surge in price and
out-of-stock situation of infant formulas, parents lodged 123
complaints to the Council in the first quarter of the year 2011.
Among those complaints, 42 cases concerned with supply. The Council
had responded swiftly by urging formula suppliers to ensure
adequate supply to local consumers and to set up designated
customer hotlines. As a result, the number of complaints on
out-of-stock situation was down to 7 for the rest of the
year.
Another category that recorded sharp
increase was medical services, which increased by 38% to 239 cases
from the 173 cases in 2010. Complaints in this category included
price disputes over maternity packages in hospitals.
Rise in complaints about online
purchases alarming
The surge of complaint cases on online
purchase has drawn much concern of the Council. In the year 2011,
the Council recorded an 89% increase in online purchase complaints,
from 439 cases in 2010 to 829 cases in 2011, in which 548 concerned
group purchase.
Comparing with 2 cases in 2010 and only 1
case in 2009, the rise on complaints related to group purchase was
alarming. Complaints on online group purchase ranged from those
about beauty treatments, medical services, dinning, to cosmetics
and fashion products.
For group purchase, most of the complaints
were about non-delivery (32%), quality of goods/services (20%) and
shop closure (13%).
Online group purchase often offers big
bargain for goods and services, but such purchase also involves
risks. The level of services, product warranty or quality assurance
may vary from the standard price items. The Council urges the sales
portals to carefully scrutinize the merchant partners and to state
clearly the terms and conditions about the sales on their websites
for consumers' reference.
Consumers are reminded to be careful when
purchasing online and to think twice before purchase and to
evaluate the reliability and credibility of the website before
signing up.
Unfair sales tactics a major
concern
Of significant concern to the Council is
the gross unfairness and injustice which consumers suffer when they
fall prey to unscrupulous traders. The Council will continue its
effort in naming those shops engaging in unfair and undesirable
sales tactics that hurt consumers' interests.
During the past year, the Council has
conducted a study on unfair terms in standard form consumer
contracts. As the standard form contracts are drafted by suppliers,
it is not uncommon to find the terms and conditions are inherently
one-sided. The study will be concluded with a report, coupled with
a set of guidelines on drafting standard form consumer contracts
and a sample contract.
Prof. Cheung said, "The proposed
guidelines, if adopted by the industries, will enhance the
protection to consumers and help minimize unnecessary
disputes."
