Council calls for greater disclosure on credit card transactions in foreign currencies
The Consumer Council has completed a survey on the levy of a surcharge on credit card transactions in foreign currencies.
Cardholders are generally unaware of such a surcharge as it is not readily disclosed by most card issuers.
Typically, card issuers simply state, in respect of the exchange rate used, "the prevailing rate as determined by the Bank on the day of the conversion".
There is no disclosure that a fee, on top of the exchange rate applied by the card network operator, will be levied to cover handling and operating costs.
In general, card network operators (e.g. Visa, MasterCard, AE) levy a conversion charge - from foreign currencies into the USD and then the HKD - of 1% to 1.1%, to cover exchange risk and operating costs.
But on top of this conversion charge, according to the Council's survey on 26 credit card issuers, all but 9 issuers also imposed a levy on overseas transactions in foreign currencies. Such a levy could vary from card to card, ranging from 0.2% to 1%.
Together this conversion mechanism effectively means cardholders are required to bear a total surcharge of up to 2% for their purchases conducted in foreign currencies. For every HK$10,000 worthy of purchase, cardholders pay an extra of up to HK$200.
Given that conversions are made at the posting dates rather than at the dates of transaction and due to the fluctuation in foreign exchanges, it is quite impossible for cardholders to estimate, with any accuracy, the exact cost of their credit card spending abroad, which is further complicated by the present lack of transparency of card issuers in the provision of this service.
Since January 2001, the Consumer Council has received a total of 10 consumer complaints related to allegedly excessive exchange rates on credit card transactions.
The number of complaints aside, as a matter of good business practice, card issuers should make every effort to enhance the transparency of the mechanism through which exchange rates are determined. This will help avoid misunderstanding and potential disputes of consumers.
Specifically, card issuers are urged to disclose the total cost (i.e. the card network operator's and the local issuer's margins) borne by consumers over fair interbank exchange rates on credit card foreign currency transactions. The situation is expected to improve as the industry moves to ensure greater disclosure in this aspect.
For full findings of the survey, consumers can consult this (March) issue of the Council's monthly magazine CHOICE.
Council detects room for improvement in washing machines
A Consumer Council test has revealed areas for improvement in the safety design of a number of washing machines.
In a comprehensive test report on 17 samples of this household consumer durable, the Council has drawn attention to these areas of safety concern:
First, the design in the prevention of overheating of some samples needs to be improved.
The samples concerned (3) were found to use a water-pressure-sensing system in place of a non-self-resetting thermal cutout as a safety device to prevent overheating in abnormal condition.
The Council is of the opinion that the pipe of the sensing system can become blocked - by scale, undissolved detergent, or fabric fibres - causing the device inoperable.
Though a non-self-resetting thermal cutout is not an explicit requirement of the International Electrotechnical Commission (IEC) standard, the Council believes that this readily available and inexpensive component (used by all other samples) is more reliable than a water-pressure-sensing system.
Second, special child safety design should be considered in some impeller/agitator (as opposed to the drum type) models.
The concern arises from drowning accidents of young children in the past involving this type of washing machines.
Although according to IEC standard, the impeller models were not required to have the automatic door lock, it may pose risk of the door being opened while in operation. Moreover, the doors for this type of washing machines were light and easy for children to open.
To avoid drowning accidents, children should not be left unattended and water should not be stowed in the tub of the machine.
2 of the impeller models, however, were designed with a "Child Safety Mode" which operates as follows: when the door is opened while the washer is in operation, a buzzer will sound to raise the alarm. The machine will stop automatically, and after 5 to 10 seconds, the water in the tub will also be drained to prevent drowning.
The report rated the performance of the 17 samples - 12 drum type comprising 5 front loaders and 7 top loaders, and 5 impeller type. Highlights of the report include:
- For stain removal ability, the samples fared very similar in washing cotton; but displayed significant differences in synthetic and even more substantial variations in wool. Generally speaking, impeller types performed less well than drum types.
- For the environmentally conscious, the report revealed that impeller type consumed less electricity while drum type consumed less water. For example, in cotton washing programme, a drum type consumed at least 1.5 times more electricity than an impeller. Two extreme examples were found to differ by over 6 times, approximately 50 cents more costly per wash for a 5 kg load.
Little joy in fee concessions for children on outbound package tours
Should children on outbound package tours pay the same amount of tour price and tips as adults?
The issue has long been a source of consumer dissatisfaction over travel tour operators.
The Consumer Council has undertaken a survey on tour price for children of 3 popular outbound packages to: Tokyo, Japan; Seoul, Korea and Sydney, Australia.
Accordingly to the survey, it appears that the crucial factor in determining children's tour price depends on the cost of hotel accommodation - whether or not extra beds are needed for them.
If no extra beds are required, the tour price could be reduced by some 18% to as little as only 5%. The savings are generally more for the Australia tours, from some 17% to 14%.
On the other hand, if accommodation requires the provision of extra beds for children, the majority (some 80%) of tour packages to Japan and Korea (7 out of 9 and 11 out of 14 respectively) would charge the same level of tour price regardless of adults or children.
Again, tour packages to Australia fared better. Only 1 out of 10 packages was priced the same for both adults and children.
Some travel agents claimed their ability to reduce children's tour price depends largely on the airfares. Promotional airfares often do not offer discount for minors or senior citizens. Nonetheless, some travel agents still offer fee concession for children.
Another area of dissent by consumers concerns the compulsory nature of payment of tips by adults and children alike.
The Council's survey found that children, in fact, paid a higher ratio of tip payment to tour price: 5.8% to 17.2% for children (of no bed charge), compared with 5% to 15.7% for adults.
The Consumer Council is of the view that the collection of tips should not, in any way, be compulsory nor set uniformly regardless of adults or children or the age of the children.
Tipping to tour guides should be an incentive to better service, and as such the payment should be voluntary and the amount decided individually by consumers.
Consumers are urged to shop around, not only on tour prices, but also the collection and amount of tips per head.
Everything that you need to know about after-sales service of personal computers
Few household electronic appliances are as complicated as personal computers. After-sales service is therefore as important a factor to consider as the appliance itself.
In the first 2 months of this year, the Consumer Council has received 85 consumer complaints related to computer issues. The yearly figures for 2001 and 2000 were 805 and 741 respectively.
Some of these complaints arose precisely because the after-sales services and/or the products provided by the agents did not live up to the expectation of the consumers.
Greater disclosure of information on all aspects of the product and after-sales service on the part of the agents will clearly help minimise such consumer dissatisfaction.
The Consumer Council has collected information from 16 agents of brand computers comprising 13 desktop and 13 notebook computers.
The survey indicated that for desktop computers, most agents provide on-site and carry-in services, and spare parts free for 1 year as stipulated in the warranty.
For notebook computers, in most cases, only carry-in services are free during the warranty period (from 1 to 3 years).
As is common these days, many computers are pre-installed with software. While all agents provide telephone enquiry services, none but only a few provide free on-site or carry-in services within the warranty period. Consumers are advised to take note of this practice.
Most warranties do not include the upgrading of computer hardware, though a users' experience survey revealed that half of the users had in fact upgraded their computer hardware in the past, such as adding RAM or Hard Disk.
Most agents, however, conceded that unless the upgrading has caused damage to the computer, it should not affect the warranty.
Agents offer different plans for consumers to extend or upgrade the warranties. Before joining those long-term warranties (e.g. extended up to the fourth year), consumers should consider whether they are likely to change to a new model during the period.
Great variations exist in the service charges per call, according to the survey. For desktop PC models, the on-site service charges range from $450 to $1,200. For notebook PC models, the carry-in service charges range from $250 to $700.
Also different are the charging methods - whether per visit, per job or per hour. For the hourly-rated plans, some may require a minimum charge of 2 hours.
Dehumidifying agents rated for effectiveness
It's time of the year when humidity sets in and dehumidifying agents are out in force.
To assist consumers in their choice of household dehumidifying agents available in the market, the Consumer Council has tested 17 models of this product - comprising 11 of the tank type (with calcium chloride as the main ingredient) and 6 bag type (3 calcium chloride and 3 non-calcium chloride).
The test results on their effectiveness are quite an eye-opener to consumers:
Under standard testing condition - 25°C and relative humidity 80% for 31 days - the tank models which had the most amount of dehumidifying agents among these samples, were measured to have the best dehumidifying capacity of 112.2 to 192.6 ml in 31 days.
This was followed by the smaller calcium chloride bag type, which ranged from 22.5 to 45.4 ml in 31 days. The non-calcium chloride bag type was a distant third with only 0.09 to 0.21 ml .
The rate of dehumidification depends on factors such as the amount of dehumidifying agents, permeability and size of the membrane, ambient temperature and humidity etc., and becomes slower over the increase in time.
The samples were also subjected to leakage and drop tests. 5 tank models were found to leak solution when turned upside down after use while 3 to have cracks after the drop test.
To use dehumidifying agents effectively, consumers are advised to use them in smaller containers and to keep the containers as airtight as possible, and to reduce the frequency and time of opening and closing.