The Consumer Council is urging telecommunications service providers to improve provisions in customer contracts to enhance customer satisfaction and reduce consumer complaints.
In the first eight months of this year, the Council received 6,087 complaints concerning telecommunications services, of which more than 10% (644 cases) were related to contracts and changes of service address.
In one of the four cases highlighted in this month's CHOICE magazine, a telecommunications company automatically renewed a contract without the prior consent of the affected customer.
The complainant wished to change her fixed line service provider after using the service for 4 years. She enquired about the procedures for terminating the contract at a branch of the telecommunications company, and later filled in a service termination form as instructed by a staff of the branch office.
But shortly after the switch of service provider, the complainant received a bill from the former telecommunications company demanding an early termination fee of HK$500. She then discovered that the company had automatically renewed her contract for another year after her first two-year contract had expired.
The company claimed that a written notification was sent to the complainant every year to inform her of the renewal but the complainant insisted that she had never received any notice of contract renewal.
In February this year, the Office of the Telecommunications Authority (OFTA) issued a voluntary Code of Practice for Communications Service Contracts (the Code). According to the Code, renewal of contract should not be automatic without specific prior consent of the customer. In addition, the service provider should notify customer of the impending expiry of the contract term, no more than 60 days and no less than 30 days before the contract expires, or make available reasonable means for the customers to check the contract expiry date.
In two of the other cases highlighted, consumers complained about unilateral changes to contract provisions by service providers.
One of the complainants was a long-term subscriber of a sports data interactive service using a designated black and white display handset. Upon the expiry of the contract, the complainant renewed for another year. After six months, he received a demand from the service provider to purchase a colour handset and pay an extra HK$238 to enjoy the service for the remaining contract period.
The complainant refused the arrangement and requested the company to honour the original contract. The company explained that its system had been upgraded and it no longer supported old handsets. Eventually the company agreed that the complainant could choose between a refund or having his handset upgraded to a colour one free of charge, and continue to receive the service until the contract expired.
Another complaint concerned a "fair usage policy" imposed by the service provider for its mobile broadband service.
The complainant subscribed to a two-year unlimited mobile broadband service plan but encountered connection problems continuously for almost a year. When he reported the problems to the service provider in January this year, he was told that the company has changed the policy which limited the connection speed for users whose downloads exceeded a certain size. The complainant was advised to upgrade to a more expensive plan.
The case was subsequently investigated by the OFTA. The service provider was found in breach of Telecommunication Ordinance for misleading or deceptive behaviour. The company was fined HK$130,000, and the usage limitation was abolished a month later.
Service providers have a general responsibility to render the agreed services during the contract period. If changes are made, companies should offer reasonable solutions or special arrangements to existing customers. According to the Code issued by OFTA, the customer may terminate the contract if the service provider unilaterally varies the contract terms/conditions and such variation will likely result in material change to the service quality or increase in price.
When choosing telecommunications services, consumers are advised to pay close heed to the terms and conditions of the contract, especially arrangements for contract renewal/extension and the company's rights to change contract provisions unilaterally. Service providers, on the other hand, are urged to adopt OFTA's Code and take the interests of customer at heart.
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