Amid a new wave of epidemic outbreak, a large number of posts promoting or selling anti-epidemic items have emerged on media social platforms and many consumers have made prepayments to purchase these items. In the first 3 months of this year, the Consumer Council (or the “Council”) has received over 760 complaints relating to these transactions, including late deliveries and refund disputes. Some consumers complained that the vendors disappeared after receiving payments, and they were helpless in retrieving their money. Let´s go through this article to learn more and stay alert.
Case 1: Vendor disappeared after receiving payment
In early February, Miss Lee, in urgent need of some face masks, browsed through a social media platform and found a post by a purchasing website selling Japanese face masks. She contacted the vendor via the platform and the vendor replied saying that the face masks would cost $300 per box and would be available in mid-February. The vendor also provided Miss Lee with a QR code to facilitate payment via a mobile payment platform. 1 week later, Miss Lee enquired about the order status, and was told that the masks would arrive by 20 February. Incognizant of a possible scam, Miss Lee kept waiting. In late February, Miss Lee discovered that the vendor’s social media page was no longer updating its posts, and her attempts to send messages to the vendor also failed. The vendor´s account was later deleted altogether from the platform. Miss Lee realized that she might be a victim of a scam and turned to the Council for assistance.
Follow up actions
After reviewing the communication records, the Council noticed that apart from the vendor’s account name on the social media platform, no other information relating to its business or contact details could be found. Furthermore, the payment was made to a personal bank account via a mobile payment platform. The Council told Miss Lee that this would be deemed as a personal transaction and hence difficult to have conciliation through the Council. Miss Lee understood that it would be difficult in retrieving her money, but she was also worried that the vendor might repeat similar scams using other account names, and thus agreed to report her case to the Hong Kong Police Force Police (the “Police”) for further investigation.
Case 2: Items that were marked as “currently-in-stock” were not delivered on time
In early February, Miss Yeung, who needed some pocket size hand sanitizers, saw a post by Company B selling Japanese alcohol-based sanitizers on a social media platform. The items were labelled as “currently in-stock” and could be delivered in 3 to 5 days. She ordered 4 bottles and paid $385 (including delivery fee). However, Miss Yeung did not receive any update on her order status for nearly 2 weeks and there was no other news on vendor´s social media page. She tried various means to contact Company B but was not successful. Moreover, she found that other people who had purchased the items had also left comments on vendor´s page regarding similar issues. Even though the sum was small, Miss Yeung was wary of a possible scam after waiting for almost a month. She then lodged a complaint with the Council about Company B’s failure in delivering the “currently-in-stock” items within the timeframe as promised.
Follow up actions
The Council was not successful in reaching Company B by phone. However, the company subsequently sent an email to the Council and apologized explaining that the delay was due to the recent surge in orders coupled with inadequate manpower. Upon receipt of the Council’s letter, Company B had immediately delivered the items to Miss Yeung and the case was resolved.
Case 3: Delivery was delayed and a handling fee was incurred in the refund
In mid-January, Mr. Cheung saw a post on a social media platform selling face masks and the arrival date was estimated to be around 2nd half of February. Mr. Cheung followed the instructions and logged onto Company C´s website, and purchased 6 boxes of Korean face masks and paid $468 by credit card. As there was a shortage of supply, Mr. Cheung tracked closely the order / delivery status. In early February, the company reiterated in a post stating that the face masks were expected to arrive in 2nd half of February and if customers did not want to wait for that long, they could apply for a refund before 14 February. After that, if the company still failed to deliver the masks, a refund (less of a 3% handling fee) would be made after 15 March.
Mr. Cheung chose to wait for the face masks and did not apply for the refund. In late February, Company C explained in a post that due to a tight supply in Korea, the face masks were unlikely to arrive in Hong Kong before March, but claimed that the company would try to find other suppliers. Mr. Cheung felt quite helpless upon reading the post as he had not chased his order repeatedly because of his trust in the company. The company had not been able to provide any record or evidence showing that it had actually ordered the products from the suppliers, and no one would know when the face masks would arrive eventually. Mr. Cheung found that a number of other customers were also chasing their orders and he was not hopeful that he would receive the goods in the end. Although Company C had already mentioned a 3% handling fee on refund, Mr. Cheung found it unreasonable to ask the customers (who didn´t receive the goods) to bear this cost. After all, the customers did not cancel the orders deliberately, but it was the company who failed to deliver the goods as promised. He therefore lodged a complaint with the Council.
Follow up actions
In its email response, Company C emphasized that the deduction of a 3% handling fee had been stated clearly on the sales post back in mid-January. The company said that it had also stipulated the refund arrangement afterwards, and it was busy handling a large number of refund requests (which were made prior to the deadline). As Mr. Cheung did not send a refund request before the deadline, his refund would only be processed after 15 March.
The epidemic has brought opportunities to certain businesses, but the surge in demand can be a challenge for some business operators. Small-scale traders, in particular, should evaluate their manpower and stability of supplies before accepting a large number of orders, and should also take into consideration issues such as logistics, customer enquiries and refund mechanisms, etc. If vendors cannot deliver the goods on time and fail to make a timely response, consumers will inevitably feel dissatisfied. On the subject of “handling fees” in the refund process, it depends on the actual terms and conditions stipulated at the time of the transaction. However, passing transaction fees to the customers is not a desirable approach.
Selling on social media platforms is easy with low operating costs, so nowadays everyone can become a vendor. However, some scammers may pose as vendors and set up social media accounts without the actual intention of selling goods, and will disappear after receiving the payments. Such acts may constitute criminal offences such as “fraud” or “deception”. Depending on the actual situation, the Consumer Council will refer such cases to the Police for investigation. On the other hand, if a vendor does not have reasonable grounds to believe that the goods can be delivered within the specified time when accepting a payment, it may have committed an offence of “wrongly accepting payment”. Even if the goods are sold via social media platforms, vendors must still make sure that statements or representations made on the products and sales are clear and accurate. Otherwise, they may violate the Trade Descriptions Ordinance. Depending on the circumstances, the Consumer Council may refer certain cases to the Customs and Excise Department for further investigation.
The Police urges the public to choose reliable and reputable online merchants. The Consumer Council also reminds consumers to check whether the vendors’ business addresses and contact details are disclosed on the social media platforms. In the event of disputes, payments made between personal accounts can be difficult to trace. Such cases would most likely be handed over to law enforcement departments for further investigation and retrieval of money can be difficult.
- Evaluate the pros and cons of various payment methods: Although mobile payment services are convenient as you can make payments anytime and anywhere through, e.g., a registered mobile phone number or QR code. However, consumers may not be able to ascertain whether they are transferring to a business or personal account. On the contrary, consumers choosing bank transfer will know the account number and name of the transferee. Credit cards and some payment platforms also provide complaint and refund mechanisms. If vendors fail to deliver the goods, consumers may have a chance of getting the money back through the above mechanisms. Therefore, consumers should not just choose a payment method based on convenience, but also consider protection and security issues.
- Take notes of business information and previous ratings: Check if a vendor´s social media page contains information such as its trading name, business address and contact details. It is less risky to choose a vendor with a physical store. Consumers should also browse through the vendor´s previous posts and ratings / reviews to gauge its credibility. Consumers should watch out if a vendor has only opened an account recently without providing any address or contact details, and only uses mobile payment services.
- Consider carefully the arrival date of pre-ordered goods: Vendors should clearly state whether the goods they are selling are "currently-in-stock” or need to be "pre-ordered". While the former category can generally be delivered within a short time, the delivery of pre-ordered goods will depend on the estimated arrival date of those goods, which can be affected by factors such as transportation and customs clearance, etc. Therefore, consumers should be mentally prepared to a possible delay in the delivery time and regularly check their order status. If the items are needed for emergency purposes, consumers should consider whether they could afford the wait before making the purchases.
- Pay attention to the terms and conditions and keep the screenshots: Read the product descriptions and the terms and conditions of sales carefully. For pre-ordered items, check if there is any information on the estimated arrival date, handling fees, and the refund mechanism if the goods are not delivered on time. Vendors should also provide regular updates on the order / supply status to lessen customers’ anxieties. Consumers are advised to keep screenshots of relevant posts as proof when needed. If a vendor fails in delivering the goods or disappears, in addition to the Consumer Council, consumers can also report the cases to the Customs and Excise Department or the Police. The Police has set up the Anti-Deception Coordination Centre (ADCC), and consumers can call the “Anti-Scam Helpline 18222”, if necessary.