Yearender briefing: consumer complaints reaching new 40,000 threshold
Consumer complaints surpassed the 40,000 threshold, for the first time, in 2008.
A total of 42,050 cases, representing an increase of 9% over 2007, was brought to the Consumer Council for mediation in a year of consumer woes amidst rising inflationary prices and the current financial crisis.
Totting up this new record was a phenomenal upsurge in complaints against financial services, by a more than tenfold increase, to 9,296 cases. The Lehman Brothers minibonds alone accounted for some 8,274 cases.
And as the year drew to a close, complaints involving business closure, notably in the travel (the bankrupt Oasis Airline in particular) and beauty saloon sectors, also rose rapidly with a 31% increase to a total of 2,349 cases.
While the outlook appears daunting, the latest complaint statistics, however, do bear out some hope that this upsurge may not continue in the year ahead.
Complaints down in major sectors
As indicated in the 2008 complaints, consumers may actually be less dissatisfied with their purchases in many types of goods and services during the year than before.
For instance, complaints against the telecom sector involving mainly internet and mobile service, though continuing to top the list at 9,759 cases, were down by 6% over 2007.
Similarly, complaints on broadcasting services concerning largely pay TV, went down by a significant 71% to 1,507 cases, in stark contrast to the escalation of complaints of the past years culminating in 5,253 cases in 2007.
The declining trend in these two categories of complaints followed a steady drop in the number of sales practices and contract disputes between the consumers and the operators.
Other notable reductions in the major categories of complaints included: telecom equipment 1,612 cases (-4%), computers 1,102 cases (-7%), and clothing and apparel 961 cases (-5%).
Tourists have fewer complaints, too.
Local consumers were not the only beneficiaries, visiting tourists also had less cause for complaints.
The year saw a drop of 27% in tourist complaints to 2,065 cases of which 1,291 cases were by visitors from the mainland.
Of significance is the sharp decrease of 75% to only 174 cases in complaints by mainland group travellers.
Likewise, complaints by mainland individual travellers also fell by 9% to 1,117 cases.
Consistent with this decline pattern was the drop in consumer complaints relating to some of the most frequent purchases by mainland visitors shopping in Hong Kong: watches 347 cases (-41%); jewellery 203 cases (-28%); photographic equipment 792 cases (-28%); drugs and Chinese herbal medicines 397 cases (-15%).
The fall in tourist complaints could be attributed to a number of measures introduced in 2007, that set up a tripartite complaint handling mechanism between the Police, the Customs and Excise Department and the Consumer Council, and a 6-month refund guarantee for group travellers taken to designated shopping outlets.
Together with the launch of the Councils Shopsmart Website to provide easy access by mainland visitors for comprehensive information and advice on shopping and related matters in Hong Kong, the measures have contributed to better consumer protection for the visiting tourists.
Streamlining complaint handling process
In an effort to streamline complaint handling in the face of the global financial crisis, the Consumer Council, in prior arrangement with the Hong Kong Monetary Authority, will now refer the public to approach the HKMA directly for complaints about financial products and services of banks and financial institutions under its jurisdiction.
On the Lehman Brothers minibond complaints, the Council has received, up to January 16, a total of 8,530 cases. The Council has referred the great majority of cases to both the Hong Kong Monetary Authority and banks for follow-up action.
The Council has subsequently received replies from seven banks in 477 cases of which 280 cases involving investment amount from $30,000 to $1.5 million were settled and 197 cases declined settlement.
Presently the Council is in the process of vetting and selecting cases for consideration of the Consumer Legal Action Fund (CLAF) for financial assistance in litigation action. So far, it has received 45 applications for CLAF assistance, three of which were subsequently withdrawn and one withheld pending the complainants decision to proceed.
Further, in light of the large number of complaints due to business closure, the Council has drawn up guidelines in the provision of advice to affected members of the public. Such cases will henceforth be handled, in most circumstances, by the provision of an advisory service rather than as complaints requiring mediation and redress.
Consumers are strongly advised to minimise prepayment consumption to avoid financial loss in the event of business default.
Pricewatch on food and daily necessities
During the year under review, in addition to regular comparative product testing and research for publication in its monthly CHOICE, the Council has launched a series of four initiatives on price information surveillance of food and daily necessities in the retail market across Hong Kong.
The exercise comprises: a weekly price survey at major supermarket chains vis-?-vis other retail outlets; a daily online supermarket price-watch; a daily (Monday to Friday) wet market price report on fresh produce; and a weekly survey of gasoline prices and sale incentives.
To facilitate motorists in searching online for a cheaper deal in fuel cost, the Council will launch an interactive Calculator device on its gasoline pricewatch website, expected to be operational next month.
The web-based Calculator will enable consumers to easily work out a range of options in order of price levels, in response to the individual needs and requirements of consumers in the purchase of petrol and diesel at the pump stations.
The total effect of these four regular surveys has greatly enhanced the price transparency of these essential commodities, and consumer awareness of the value of price comparison in times of inflation.
35th Anniversary to promote fair trade
As the Council enters its 35th anniversary year, as well as the 10th Anniversary of the Consumer Culture Study Award, one priority the Council will focus on will be promoting the culture of consumer awareness and fair trade practices.
The report in which the Council has proposed for the enactment of a Fair Trade Practice Statute, is currently under active consideration of the government by the Commerce and Economic Development Bureau.
As the main scheduled event, a Special 35th Anniversary Seminar under the theme (in Chinese) of ʮOvqAŴơ is being organized which is expected to be well attended by guests and participants from a wide cross-section of the community, as well as delegates from consumer and related bodies in the mainland and abroad.
A slogan competition is currently open to members of the public as part of the anniversary programme this year. Amongst others, a newspaper supplement and roving exhibition are also in the pipeline.