The Consumer Council yearly statistics showed that last year the complaint figure recorded a drop of 15%, from a total of 34,114 cases in 2009 to 29,048 cases in 2010.
The Council believes that public education together with actions taken by the regulatory authorities proved to be effective in combating misconducts in trade.
A notable reduction of cases concerning complaints in relation to time sharing scheme was recorded, with a drop of 70% to 76 cases in 2010, compared with 251 cases in 2009. The joint efforts of the Council and Hong Kong Police Force in alerting the consumers against undesirable sales activities attributed to the decline.
Another big fall was found in the category of banking and financial services. A total of 742 cases were received, representing a decrease of 85% from 2009 (4,968 cases). If all Lehman-related cases in 2009 (3,881 cases) and 2010 (31 cases) were excluded in the statistics, the drop was 35%.
However, there was a significant increase of 68% in complaints concerning health & Yoga clubs (862 cases), compared to 2009 (514 cases). This might be caused by the successive closure of yoga centres in the past year. A total of 350 cases were received due to club closure last year compared to 6 cases in 2009.
Overall tourist complaints which accounted for nearly 7% of total complaints, recorded an increase of 8% to 2,033 cases. Complaints from Mainland tourists edged up by 9% to 1,420 cases. Disputes often involved purchase of photographic and electronic equipment, jewellery and watches.
Top 5 consumer complaints categories
The top 5 services / products categories under complaint accounted for a total of 16,003 cases or 55% of all complaints in 2010.
Though on a downward trend, complaints about telecommunication services (9,054 cases) remained the top category while complaints concerning telecommunication equipment (1,987 cases) increased 48% after a double-digit decrease in 2009. Cases on broadcasting services (1,857 cases) rose by 22%, where almost 60% of them pointed to the sales practices and disputes over charges.
Complaints concerning electrical appliances (1,750 cases) dropped 23%, while those about furniture and fixtures (1,355 cases) increased slightly by 6%.
Complaints related to telecommunication services
With the growing popularity of smartphones and PDAs, consumer disputes over bill charges remained high with 4,925 cases (54%) in 2010, mainly concerning mobile data usage and roaming services.
Complaints about service quality (e.g. usage cap, slow transmission or connection failure) also accounted for 2,578 cases (28%) and allegation concerning auto-renewal of service contracts was recorded in 346 cases.
Mobile handset was one of the focal points of complaints in telecommunication equipment (1,804 cases). The sharp rise (57%) in the number of mobile handsets was probably caused by the launch of a popular smartphone in the second half of the year. Complaints about late or non-delivery of mobile handset (358 cases) increased over 23 times from 15 cases in 2009. Moreover, 60% of the complaints related to quality, repair and maintenance of the mobile handsets.
Competition Bill
The Consumer Council has been advocating the introduction of a competition law for more than a decade. Over the years, the Council has urged for a comprehensive competition policy and statutory regime to ensure free competition in the market to facilitate economic efficiency and benefit consumers.
More than 100 economies around the world have in place a competition law with provisions against price-fixing and abuse of market dominance. The Council believes that enacting the legislation on competition can eliminate the artificial barriers to market entry, prohibit price-fixing, market division and other anti-competitive practices distorting free competition. We are therefore pleased that the Government has finally moved a Competition Bill which is now being examined in the Legislative Council.
Competition benefits consumers in terms of choice, quality of service, price and product innovation. Examples could be found in the liberalisation of fixed telephone network in 1995 which marked a turning point in the development of the telecommunications market, leading to lower prices and improved services. The elimination of interest rate agreement in 2001 also brought forth competitive rates among banks. The ending of an industry-wide price increase recommendation of noodle trades a few years ago also restrained the retail prices of noodles.
The Council has set up a working group to study the Competition Bill and will submit its views to the relevant Bills Committee of the Legislative Council. The Council will continue its effort to reach out to the public and the trade to explain why a competition law is so crucial to consumers at large.
Strategic review of CLAF completed
The operation of the Consumer Legal Action Fund (CLAF) was extensively reviewed by its Management Committee during the year, which sought to examine the Fund's positioning during the changing environment. The Task Force responsible for conducting the review recommended that existing guidelines and operational procedures of CLAF should be continued with some refinements. In addition, the Task Force also addressed the impacts of the Civil Justice Reform regarding encouraging and facilitating settlement on CLAF.
A Practice Direction on mediation (PD 31), issued by the Judiciary and coming into effect early last year, encourages settlement of disputes through alternative dispute resolution procedure such as mediation.
While it has always been the policy of CLAF that an application for assistance is considered only after all other means of dispute resolution have been exhausted and that genuine and reasonable attempts of mediation should be made before the applications are considered by CLAF, we take the view that sometimes for the purpose of establishing clear legal rulings on pertinent matters concerning consumer interests, litigation will still be proceeded with, and the court be informed of CLAF's stance at the earliest possible opportunity.
Up to the end of last year, CLAF had considered 159 consumer incidents comprising 1184 applications. Assistance was granted to 678 applications involving 36 consumer incidents of significant consumer interest, concerning complaints arising from misrepresentation, breach of contract, and unfair trade tactics, etc. 3 cases involving Lehman Brothers mini-bond have started litigation procedure.