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Submission to the Commerce and Economic Development Bureau regarding Consultation Paper on Real-name Registration Programme for SIM Cards
- The Consumer Council (the Council) is pleased to submit views to the Commerce and Economic Development Bureau in relation to the proposed Real-name Registration Programme for SIM Cards (the Programme). The Council sets out below its views on the proposals raised in the related consultation paper and suggestions for protection of consumer interests.
- On the whole, the Council supports in principle to the Programme as an important step towards the aim of interdicting criminal offences by making real-name registration of pre-paid SIM (PPS) services mandatory. The Council is of the view that implementation of the Programme may facilitate its effective handling of consumer complaints in terms of identifying the traders under complained and resolving complaint cases. According to the Council’s complaint statistics, the number of non-pursuable or unresolved online shopping cases involving late/non-delivery of goods was 65 cases last year, which is a drastic increase by 364% from 14 cases in 2019. In these cases, the traders concerned were unreachable for settlement.
- As recognised in paragraph 2.2 of the consultation paper, the use of PPS services “have benefited local users and visitors looking for affordable, flexible and convenient mobile services usage”. The Council is of the view that prior to the implementation of the Programme, the welfare of consumers has to be carefully considered and well taken care of, so that the aforesaid benefits, which a significant number of mobile service subscribers (11.7 million or 56% of total mobile subscribers in Hong Kong) are enjoying now, will not be undermined.
- Bearing these consumer benefits in mind, the Council considers that attention should be given to any possible impact the Programme could have on the current market structure of the telecommunication industry. For instance, small mobile service providers that might not have the competency and capability to comply with the new requirements under the Programme may exit or consolidate in the market due to the business risk involved and the increase in compliance cost (e.g. to implement registration and verification systems), hence resulting in a more consolidated market structure with less competition in the long run. Under such change, consumer welfare on product choice, price and quality of service may inevitably be affected. Therefore, the Council hopes that with the benefits of modern technology, the registration and verification systems could be kept as simple as possible so that the potential cost to the industry and consumers during the transition and as a result of the change could be minimized, while meeting the legislation objective of the Programme.
- While appreciating that the Government will work with the licensees and relevant non-governmental organisations in providing assistance to the elderly and some needy groups, the Council would like to add that digital literacy shall be a factor for consideration for vulnerable groups such as the elderly, low-income and needy, especially when a new and unfamiliar online registration process would be implemented. Adequate education and support should be provided to facilitate safe and efficient transition.
- To strengthen consumer confidence in the implementation and running of the Programme, the Council considers it important that measures should be in place to deter and tackle “identity theft” issues. While licensees abide by the Personal Data (Privacy) Ordinance that data subjects should be granted the right to request access to and correction of their own personal data, the Council considers that facilitation of access by consumers to view their own personal particulars as collected and kept with respective licensees handily warrants attention, considering there might be cases that consumers suspect that their identity-related documents are being used by unauthorised persons to register PPS cards.
Comments for respective proposals
- The following sets out the views of the Council on selected proposals in the consultation paper which might have impact on consumers for consideration of the Government.
Proposal 1 – Scope
- As reflected in Proposal 1 of the consultation paper, the Programme will cover visitors who shall provide identity information and document for registration of SIM cards. This being the case, the Council urges that clear communications and publicity efforts should be in place to inform the overseas tourists and overseas citizens working in Hong Kong about the change, so that they can make an informed choice whether they are willing to provide personal particulars to licensees if they opt to purchase PPS cards for use during their stay in Hong Kong.
- The Council is of the view that the licensees should also be reminded to watch out for the possible need to comply with international privacy policies such as the European Union’s General Data Protection Regulation when offering goods or services to overseas visitors and collecting personal data from them.
Proposal 2 – Number of PPS cards
- It is noted in Proposal 2 that consumers, company and corporate users are allowed to register no more than three PPS cards with each licensee. The Council suggests that the proposed quota should be reviewed from time to time so as to ensure that such quota would continue to be appropriate in meeting the needs of consumers.
- Furthermore, the Council is of the view that appropriate flexibility and exemption might need to be considered to cope with, while imposing a cap to limit the number of PPS cards that can be registered by each consumer or corporate. The Council considers that companies/industries which are at present using a large number of SIM cards, such as logistics and courier companies, the taxi industry, car hailing industry, App developers, etc., may incur extra administration costs to handle such registration and verification process if the Programme is in place. Under the present economic condition, it would exert financial pressure on consumers who may have to bear the transfer costs from these companies eventually. In addition, the Council is also concerned if there would be impact on the quality of services for some companies, e.g. corporates using WhatsApp business accounts to communicate with consumers. In finalising the Programme without compromising the need to deter criminal offences, the views of business stakeholders on the practicality and mitigation measures should be considered to avoid giving in the service quality and low price that consumers currently enjoy in PPS cards.
Proposal 3 – Registration for users below the age of 16
- For clarity purpose, the Council considers the term “relative” unclear as strangers could claim that they are distant relatives and could still register a SSP or PPS card for users below the age of 16. A more precise definition for the term “relative” should be specified in the relevant regulation.
Proposal 4 – Checking and registration system
- The Council is concerned as to whether small mobile service providers, especially those having a customer base of less than 10,000 subscriptions (referred to as “CLOTS” licensees under the Telecommunications Ordinance), will have the capability to establish a secured system to safekeep consumer data, and to clarify and verify the information provided by consumers. In light of the implication on consumers, the Council advised that, in the hope of the general public has full confidence in the Programme, the licensees should be reminded of the need to comply with the Personal Data (Privacy) Ordinance, and the Authorities involved shall have the power to inspect the security system of the licensees as and when necessary.
- As to the licensee’s power to “deregister” the SIM card of a particular user, the Council considers that the licensees should provide information or feedback procedure to allow the concerned user (consumer) to respond in case of the possibility of wrongful rejection or deregistration, when licensees refuse to provide service for consumers.
Proposal 6 – Implementation by phase
- To ensure a seamless transition and to ensure consumer rights are protected, the Council urges the Government to provide more information about the Programme details. For instance, (i) explanations on what and how the required consumer information shall be collected and stored by the licensees; (ii) service support schemes for companies and service providers, if any; (iii) guidelines for consumers to dispose of their PPS cards if they are holding more than three PPS cards now; and (iv) steps to be followed to deregister PPS cards and report lost PPS cards in the future.
- As stated in Proposal 6, SIM cards that have not completed registration can no longer be used on the 361st day after the date of commencement of the regulation. The Council suggests that the transition period be extended and a reactivation procedure be introduced as provided in Macau, to cater for the practical situations where some PPS card users, especially those travelling/staying between Hong Kong and overseas, or the elderly not knowing how to register, might not be able to register within the proposed period.
- In relation to the new registration system, the Council is concerned if the increase in handling costs from licensees for setting up new registration and verification systems, collecting unsold PPS cards from their agents and retail outlets, deactivating unregistered PPS cards, reprinting and replacing packaging, and redistributing the new PPS cards etc, would be passed on to consumers.
- The Council sees the need of mobile service providers to reprint and replace all packaging of PPS cards with activation instructions (para.3.11) and foresees assistance might be required by the elderly and those who are not digitally literate (if on-line registration and activation would be implemented). To safeguard consumer’s right to know, the Council is of the view that licensees should be required to properly inform consumers about the terms of service and activation instructions when purchasing or switching to new PPS cards. In addition, licensees should continue to abide by the requirements under the Personal Data (Privacy) Ordinance (PDPO) and the best practices recommended by the Privacy Commissioner, such as informing consumers about their privacy policies, the purpose of data collection, data retention and disposal policies, and consumer access rights. Special assistance might be necessary for the elderly and needy groups on such information.
- The Council also urges that clear rules in the practicing code should be set to ensure the licensees offer consumers a free choice of services that fit their needs, but not to engage in any market malpractices such as luring consumers to make unnecessary purchase of new PPS cards during the transition of the Programme. Appropriate market surveillance work might be necessary.
Proposal 9 – Registration of CLOTS licensees
- The Council supports and welcomes that all CLOTS licensees offering SIM services would be required to register with the Communications Authority. For consumer protection, the Council considers appropriate check and support should be given to the CLOTS. For example, to find out if they have the capability to provide adequate after-sales services to consumers, and build a secured system to comply with the PDPO and overseas regulations if applicable.
- Taking as a whole, the Council considers consumer education necessary to inform consumers about the details of arrangement under the Programme, in particular to: (i) the registration process of the PPS cards; (ii) safeguarding personal particulars and avoiding unauthorised persons to register PPS cards on behalf of oneself; (iii) the consequences of allowing others to use their identity to register the PPS cards or providing false information for registration, as mentioned in para.3.16; (iv) the disposal of PPS cards; and (v) the channel for complaints and enquiries.
- To conclude, the Council recommends the Government to take necessary steps to foster a fair marketplace for both consumers and industry players to optimise free choice of licensees and to facilitate the development of the telecommunications industry, while meeting the security objective as stated in the consultation paper. Complementary education should also be provided to empower consumers to protect themselves against fraud.
- Last but not least, the Council appreciates the opportunity to be consulted on the Programme implementation details and related rules when ready.