The introduction of a new proposed statute to regulate various forms of unfair, misleading and deceptive trade practices is high on the agenda of the Consumer Council in the year ahead.
The proposal for legislative reform is now in its final stage of completion for submission to Government before the end of next month.
These measures were announced today (January 21) by the Council's Chairman, Prof. Anthony CHEUNG Bing-leung, in his year-end press briefing as he revealed a new record high of complaint statistics for the year 2007.
The year recorded a total of 38,521 complaint cases relating to goods (13,732 cases) and services (24,789 cases), representing an increase of 7% or 2,559 cases over the preceding 2006.
The number, the highest on record, may signal a resurgence of rising consumer dissatisfaction over the purchase of goods and services. In 2006 was recorded a slight drop of 2%, the first in 7 years since 1999.
Review of consumer complaints
A review of the latest annual statistics showed that among the top 5 complaint categories, steep increases were recorded for Pay TV (5,231 cases up 80%) and further education services (2,037 up 179%) - together, these 2 categories alone accounted an extra 3,638 cases over 2006.
Complaints on Pay TV rose sharply during the first half of the year 2007, reaching a high of 1,067 cases in June, but have since come down steadily to only 141 in December following intervention of the Council with the operators concerned.
The rise in further education service was due largely to the sudden closure of a language tuition centre (1,106 cases) affecting many on Continuing Educational Fund subsidy.
Telecom services continued to draw the most complaints totaling 10,382 cases - internet (3,752), fixed line/fax (2,435), and mobile telephone services (2,344). The number, however, has been on a downward trend since 2005 (12,029 cases) at the peak of consumer dissatisfaction over this rapidly expanding service sector.
It is understood that OFTA is working on pilot studies for a Customer Complaint Settlement Scheme (CCSS) aimed at resolving contractual disputes between communications operators and their customers. CCSS will be independent of OFTA, and operators will take part on a voluntary basis.
Also on the decline among the top 5 categories were electrical appliances (2,051 cases down 6%), and telecom equipment (1,677 down 5%).
Other major categories of complaints in the 4-digit bracket were: furniture and fixtures (1,563 cases up 9%); computer (1,177 down 4%); photographic equipment (1,106 down 4%); food and drinks (1,051 up 30%); clothings and apparels (1,014 up 1%); and travel agents (1,002 down 9%).
Other notable increases of concern included: health clubs (713 cases up 108%, largely due to business closures of health clubs and disputes involving yoga clubs); baby products (154 up 54%, largely due to unsafe toys and the US product recalls); money changers and guest houses (68 up 66%, and 36 up 89% respectively, mainly involving mainland visitors).
Decreases, on the other hand, were recorded, notably, in medical services (208 cases down 50%), hotel/dining clubs (109 down 38%), and modeling/talent hunt (30 down 74%).
Overall tourist complaints rose by 33% to 2,812 cases in 2007. Of these complaints, 1,912 cases came from mainland visitors - 1,225 (up 32%) on individual tours while 687 (up 27%) on group tours.
Despite the increase on group tours, complaints have fallen remarkably from 154 cases in April to only 28 in December following concerted efforts by the Council, Police, and Customs and Excise Department.
Proposed trade practices statute
Of significance and concern to the Council are the gross unfairness and injustice which consumers have to suffer in the hands of unscrupulous traders. These cover in various forms deceptive, misleading, unconscionable, and aggressive trade practices.
The number of complaints involving unfair trade practices has been on a consistently high level - with over 5,000 cases in 2007 deemed to fall within this description.
The long-term solution, said the Council's Chairman Prof. Anthony CHEUNG, must therefore to introduce a comprehensive trade practices statute to regulate such undesirable practices detrimental to the consumers.
Stressed the Chairman: "Ridding the economy of unfair trade practices will, on the one hand, increase the confidence of consumers in the marketplace to the ultimate benefit of legitimate traders and, on the other, protect the interests of the traders from the unfair competition that arises from such practices".
"For the honest traders, it is a win-win situation." he said adding that maintenance of consumers' confidence and fairness in the marketplace contributes to economic prosperity and Hong Kong's international image and reputation as a shopper's paradise.
Prof. CHEUNG pointed out that the current legal regime is failing to address some long-standing unfair trade practices and to keep up with the rapid changes taking place in the market.
Similar unfair practices also exist, to varying degrees, in other advanced economies and, to tackle the problem, many have already enacted comprehensive trade practices statutes for improved consumer protection.
Accordingly, the Consumer Council takes the view that serious consideration should be given to establishing a set of baselines and uniform trading standards for the economy as a whole, through the enactment of a comprehensive trade practices statute, with the law administered by a competent enforcement authority.
The proposed statute aims to provide a consistent, coherent and comprehensive legislative framework for both consumer protection and business compliance, covering the following conduct:
- Misleading or deceptive acts or omissions (e.g. misleading claims in advertisements regarding, inter alia, the nature or effect of products, business connection of trader);
- Aggressive practices (e.g. coercion and harassment);
- Other improper or unfair trade practices and the above by a trader directly connected with (i) the promotion, sale or supply of a product (goods, services or real estate) to consumers; or (ii) the buy-back of goods such as goldwares and secondhand cars from consumers.
It is also proposed that the statute will cover unfair trade practices before, during and after transaction, including unfair tactics used in pre-sale marketing, advertising and selling, and post-sale relationship found on commitment made during transaction (e.g. inhibiting consumers to exercise contractual right, failure to honour undertaking on replacement and maintenance).
Enhanced service to mainland visitors
With Chinese New Year just around the comer, the Consumer Council is gearing up its pre-shopping information and advice service to mainland visitors through its new dedicated website " 
" www.consumer.org.hk/shopsmart .
In addition to the current five categories of purchase popular with mainland visitors - gold ornaments and jewellery, watches, audio visual consumer electronics, Chinese dried seafood, cosmetics and medicinal products - a new category on selected service sectors comprising insurance, rental and purchase of property, and beauty service, has also been added to enhance its content.
To further promote the website to mainland visitors, the Council has now launched a new round of online marketing of the website - via baidu.com search marketing and banner advertising for internet users in Beijing, Shanghai and Guangdong.
The China National Tourism Administration and many mainland consumer bodies including the China Consumers Association have made hyperlink arrangement with the Council's website for easy access of consumers in the mainland.
A flyer promoting the website will also be distributed in Lowu and Hong Kong International Airport to mainland visitor arrivals before and during the Lunar New Year.
Issued by
Consumer Council
21 January 2008