The call for the enactment of statutes to safeguard a free market competition and to regulate the sales of first-hand properties is high on the agenda of the Consumer Council this year.
Competition Bill
The Consumer Council urges Legislators to support the enactment of Competition Bill to safeguard and foster competition, and to combat anti-competitive practices in the market.
"Over the years, the Council has been advocating legislations to enhance consumer protection," said Prof. Anthony Cheung Bing-leung, Chairman of the Council, "With a competition law in place, anti-competitive behaviour in Hong Kong will be prohibited and consumers will benefit from better prices, wider choices of quality goods and improved services. We hope the Competition Bill will be passed within this legislative session."
In the past year, the Council continued its effort to reach out to the public and the trade to explain the significance of a competition law to consumers at large, as well as to small and medium enterprises (SMEs). A forum for the SMEs was held in December 2011.
Legislation on first-hand sales of residential properties
Speaking at the year-end review, Prof. Cheung also commented on the government's recent White Bill on the regulation of the sales of first-hand residential properties.
Prof. Cheung said the Consumer Council welcomed the Government's move in introducing the White Bill for public consultation on the subject, which was a significant move to step up measures to protect the interest of prospective buyers of residential flats. The Council has been a strong advocate of such regulation over the past several years.
The Council appreciates the positive aspects of the proposed legislation which forbids misrepresentation and dissemination of false or misleading information in the sale of properties, and considers that transparency, fairness and orderly sales arrangements should be basic considerations in regulating the first-hand residential property market.
Prof. Cheung stressed, "The paramount goal of the proposed statue is to protect consumers who are making what is likely to be the single most expensive purchase in their life."
Consumer complaints down in some major sectors
The Council's annual review on the complaint statistics in 2011 showed that a total of 27,541 cases were recorded, a slight decrease of 5% in comparison with the previous year. This is an encouraging sign. However, certain sectors remain areas of concern.
Complaints on telecommunication services (7,233 cases) and on broadcasting services (1,338 cases) both recorded a double-digit decrease. The former mainly involved charges and contract disputes while the latter concerned largely pay TV, going down by 20% and 28% respectively.
Commenting on the downfall in both complaint categories, Prof. Cheung affirmed that the continuous effort of the Council on consumer education with concerted actions taken by the regulatory authorities and the trades had proved to be effective in reducing undesirable sale practices.
The implementation of Industry Code of Practice for Telecommunications Service Contracts in mid 2011, in response to the Council's studies on service contracts of mobile services and roaming charges, as well as the effort of the regulatory authority, has also provided better protection to consumers when they subscribe to telecommunications services. "It is a positive result after long discussions among relevant parties," said Prof. Cheung.
Also on the decline in the top 5 categories were complaints about telecommunication equipment (1,724 cases, down 13%) and electrical appliances (1,511 cases, down 14%).
Overall tourist complaints - which accounted for 8.5% of total complaints - recorded an increase of 15% to 2,342 cases. Although complaints from Mainland tourists went up by 20% to 1,698 cases on one hand, a sharp decrease by 82% to only 49 cases was registered in complaints lodged by Mainland group travelers on the other. Disputes often involved sales practices, prices and quality of goods.
Dramatic increase in infant formulas complaints
The year also saw a dramatic increase in complaints related to infant formulas, which rose sharply to 194 cases, a 173% increase compared with 71 cases in 2010. 70% of the complaints (138 cases) were concerned with price disputes, supplies being out-of-stock and the quality of products.
Frustrated by the surge in price and out-of-stock situation of infant formulas, parents lodged 123 complaints to the Council in the first quarter of the year 2011. Among those complaints, 42 cases concerned with supply. The Council had responded swiftly by urging formula suppliers to ensure adequate supply to local consumers and to set up designated customer hotlines. As a result, the number of complaints on out-of-stock situation was down to 7 for the rest of the year.
Another category that recorded sharp increase was medical services, which increased by 38% to 239 cases from the 173 cases in 2010. Complaints in this category included price disputes over maternity packages in hospitals.
Rise in complaints about online purchases alarming
The surge of complaint cases on online purchase has drawn much concern of the Council. In the year 2011, the Council recorded an 89% increase in online purchase complaints, from 439 cases in 2010 to 829 cases in 2011, in which 548 concerned group purchase.
Comparing with 2 cases in 2010 and only 1 case in 2009, the rise on complaints related to group purchase was alarming. Complaints on online group purchase ranged from those about beauty treatments, medical services, dinning, to cosmetics and fashion products.
For group purchase, most of the complaints were about non-delivery (32%), quality of goods/services (20%) and shop closure (13%).
Online group purchase often offers big bargain for goods and services, but such purchase also involves risks. The level of services, product warranty or quality assurance may vary from the standard price items. The Council urges the sales portals to carefully scrutinize the merchant partners and to state clearly the terms and conditions about the sales on their websites for consumers' reference.
Consumers are reminded to be careful when purchasing online and to think twice before purchase and to evaluate the reliability and credibility of the website before signing up.
Unfair sales tactics a major concern
Of significant concern to the Council is the gross unfairness and injustice which consumers suffer when they fall prey to unscrupulous traders. The Council will continue its effort in naming those shops engaging in unfair and undesirable sales tactics that hurt consumers' interests.
During the past year, the Council has conducted a study on unfair terms in standard form consumer contracts. As the standard form contracts are drafted by suppliers, it is not uncommon to find the terms and conditions are inherently one-sided. The study will be concluded with a report, coupled with a set of guidelines on drafting standard form consumer contracts and a sample contract.
Prof. Cheung said, "The proposed guidelines, if adopted by the industries, will enhance the protection to consumers and help minimize unnecessary disputes."