Overall Consumer Complaints Down 12% amidst Travel Complaints Rising 41%

2 February 2016
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The Consumer Council received a total of 27,378 complaint cases in 2015, representing a drop of 12% from 31,048 cases in 2014.  The complaints were evenly distributed between goods and services at 48% and 52% respectively.  While the complaints have come down in number, they have nevertheless become increasingly more complicated in nature.

In particular, the Council is concerned about rising travel complaints involving local residents in purchase of air tickets and hotel accommodation, and visiting tourists purchasing ginseng and dried seafood, jewellery and watches.  The upsurge has sounded an alarm knell for the industry: that if no remedial action is taken immediately, the situation will continue to deteriorate, bringing long-term detriment to the tourism industry. 

Top 5 Complaint Categories

For 16 consecutive years, telecommunication services remained at the very top of all complaint categories, with 3,779 cases in 2015 which is a new low in recent years falling by 37% compared with that of 2014.  The significant reduction (by more than a thousand cases) was attributed mainly to improved billings and clarity by telecoms providers, reflecting also the positive effect of telecoms providers responding to the call of their stakeholders, including the Council which has for many years urged the industry for improvement in service quality and trade practices.

The issue remains in question stemmed from the practice adopted by some providers in billing consumers upon contract termination.  This is because regardless of the contract termination date, the final monthly bill is automatically computed up to the very end of the month, instead of charging proportionally the actual days of usage upon service termination, resulting in allegations of overcharging.  The Council has called on the service providers to respond and improve in the resolution of the subsequent consumer complaints.

Following second on the top five were complaints relating to travel matters, with 2,642 cases surging sharply by 41% over 2014.  Of these cases, over 70% were against air tickets and airline services, and the remainder 30% hotel booking, tours, hotel and air ticket package, etc.

Complaints about furniture and fixtures came a close third with 2,395 cases, a substantial jump of 87% over 2014.  Over half (1,265 cases) were generated by one large furniture/electrical appliance chain due to business closure – discounting this particular case, the complaint figure in this category would have been actually 12% less than the year before.

Fourth on the list were electrical appliances with 1,691 cases, a slight 2% decrease over 2014.  TV sets and maintenance of air-conditioners were the most complained items.  Telecommunication equipment ranked fifth with 1,673 cases, a 60% drop over 2014 – due mainly to the absence of the chaos in the sales created by the launch of a certain new smartphone on the market in the previous year.

Service Quality

In respect of complaint nature, among the top 5 categories, price/charges dispute led all others.  There was a general decline this year in the categories concerning sales practices, quality of goods, and late/non-delivery/loss, ranking from third to fifth.  Second in place was the only category with an increase of 5%; it concerned quality of services, which is a reflection of a growing consumer demand for higher service quality, and possibly a general decline in the service quality of some traders.

In this age of globalization, consumers have come to expect better goods and services in terms of price, product quality, word-of-mouth, service attitude, efficiency and accuracy which can all come readily for comparison with those in the outside world.  Coupled with the popularity of internet shopping, offering ever more consumer choices, businesses must strive continually to innovate and move forward in keeping with the growing consumer expectation.

Travel Matters

Tourism is one of the most important pillars of the Hong Kong economy.  But the Council's 2015 complaint statistics indicated a worrying rising trend of tourism-related complaints by 41% to 2,642 cases.  Complaints levelled against air tickets and airlines escalated by 63% and 36% respectively – together they alone accounted for more than 70% of all travel matters complaints.

In recent years, budget airlines have proliferated rapidly – one of the main reasons why the complaints in this area have been on the rise.  In 2015, complaints in relation to budget airlines jumped a hefty 57% to 1,197 cases over 2014.  Consumers were largely dissatisfied with the way budget airlines handled price disputes, flight alterations or cancellations, and customer service.  Because budget airlines offer comparatively cheaper airfare, the scope of service they provide may necessarily be curtailed and differ from that of the traditional airlines.  Such shortfall existing between consumer expectation and actual service provision easily led to disputes and complaints.

The outbreak of the Middle East Respiratory Syndrome and the bomb explosion in Bangkok, Thailand, last year prompted a rush of consumers with purchased air-tickets seeking to alter their itinerary but airlines failed to respond and manage the requests properly – another reason for increased complaints in this category. 

Further, complaints relating to hotel booking also rose 44% to 155 cases – with 140 cases or over 90% from online hotel booking involving mainly misleading advertising such as "free advance booking cancellation", "low price guaranteed", or the like as well as the actual facilities of the hotel failing to correspond with the online descriptions.

The Council has long been concerned with travel matters.  In CHOICE last year study report on online travel service portals selling air-tickets was published, revealing to an unwary travel public such potential pitfalls as the online practice of "drip pricing" or pre-setting and inclusion of chargeable items for consumers, etc.  Also published were reports to advise the public on budget airlines and redemption of flight mileage awards. 

Tourist Complaints

Besides travel complaints involving local residents, complaints from overseas tourists were also noteworthy.  In 2015, the overall tourist complaints fell by 8% to 2,507 cases.  Mainland tourists accounted for about 80% of complaints; with the number of visitors from the Mainland falling, Mainland tourist complaints were also reduced by nearly 9% to 2,018 cases.

But what is important is the increase in Mainland tourist complaints in the purchase of ginseng and dried seafood and jewellery and watches – by 11% and 21% to 438 cases and 425 cases respectively.  In August last year, in view of rising tourist complaints of sales deception by drugstores and medicine shops, the Council named 7 drugstores for malpractices, in a bid to alert the public and issue a stern criticism that such undesirable trading practices risk destroying Hong Kong's reputation as a "shopping paradise", and ultimately undermining the entire sector and the whole retail industry.

Complaints from non-Mainland tourists also recorded a 3% dip to 489 cases.  Among them were 77 cases involving air-ticket and hotel matters, 12% more than the preceding year.

Fitness and Beauty

Increases in complaints were levelled against both beauty services and recreation/health clubs – the former up by 21% to 1,378 cases, and the latter 11% to 577 cases last year.  Although the figures are as high as those of telecommunication services, the situation cannot be ignored. For instance, complaints against beauty treatment therapies involving large sums of over $100,000 rose sharply from 49 cases in 2014 to 78 cases in 2015.  Last year also saw both beauty centres and fitness centres allegedly in violation of the Trade Descriptions Ordinance came under prosecution of the Customs and Excise Department and subsequent court conviction, with most complaints involving the use of coercive tactics to force consumers into purchasing highly-priced treatment service.  This is indicative of a community and its law enforcement agencies in resolutely prohibiting unfair trade practices against consumers.

In addition to its reconciliation efforts in consumer complaints, the Council will continue to maintain a close tie with the law enforcement agencies in assisting vigorous enforcement and proposing related enhancement measures to ensure the safeguard of consumer rights.

Looking Back and Ahead

The past year has seen the Council most actively engaged in all endeavours in safeguarding consumer rights and interests.  In July, in collaboration with the Laundry Association of Hong Kong, the Council launched a Code of Practice for the trade in implementing voluntary self-discipline.  The Code aims to enhance service quality, promote good trade practice and uphold consumer rights.  The Council will continue to be in partnership with different trade sectors in the promotion and development of voluntary codes of practice beneficial to consumers.

In support of the Consumers International, the Council has launched a campaign against the abusive use of antibiotics.  It has written to 9 fast food restaurant chains asking them to cease the use of food ingredients containing antibiotics.  This will form one of the main tasks of the Council in this year. 

Another issue of concern is about the development of the electricity market in Hong Kong.  In view of the approaching expiry of the Scheme of Control Agreement between the Government and the two electricity companies, the Council submitted its views in response to the Government consultancy paper on this subject, and co-organised with the Competition Commission a symposium, with experts from the local and abroad, on the issue of introducing competition into the electricity market. 

After close to 20 years of continual lobbying, the Competition Ordinance finally came into effect at the end of last year.  Together with the enforcement of the Trade Descriptions Ordinance in 2013, consumer legislative protection has no doubt greatly increased. The Council will continue to advocate for improvement in the legislations to foster consumer protection in future years.

Technological advances have brought consumers convenience but also led to emerging consumer issues, from online shopping and purchase to the more recent sharing economy and big data.  The Council will continue to defend, as a matter of priority, the rights and interests of consumers, through in-depth studies and research, CHOICE publications and website, to disseminate to the public timely consumer advice, product testing reports as well as through consumer education to promote consumer empowerment and protection to various strata of the community.