Online second-hand platforms are indeed a great way to declutter, allowing consumers to reduce waste by sorting then selling or giving away unwanted items to those in need, and allowing those in need to purchase items they like at a more affordable price, thus promoting sustainable consumption. These trading platforms may seem simple and easy to use, but it is not uncommon to come across goods that do not match their description after transaction. Even worse, there have been occasional cases of scams, whereas it is also not easy to return purchases or seek redress. The Consumer Council surveyed 7 online second-hand platforms operating in Hong Kong and found that the rights and responsibilities of the platforms, sellers and buyers were unclear, providing limited protection to consumers. Most platforms even stated that they only served as a trading venue provider and would neither intervene in the transaction process nor bear liability for the quality and authenticity of items traded. Therefore, regulation would rely mainly on basic measures such as a list of prohibited items, reporting functions, as well as buyers’ vigilance and sellers’ self-regulation. The Council urges platforms to reinforce their corporate responsibility, strengthen research and improve transaction protection measures, such as exploring the feasibility of checking for counterfeit goods and introducing a return mechanism, so as to provide a safer, fairer and more transparent trading environment for consumers.
From March to May this year, Council staff conducted mystery shopping by posing as general consumers and surveyed 7 online second-hand platforms operating in Hong Kong. Service information was obtained from operators’ websites or apps to examine the use of these platforms and potential consumer risks. The information gathered was confirmed and verified by 5 platforms, while the remaining 2 platforms did not reply before the deadline.
Individual Platform May Cause Consumers to Disclose Unnecessarily Large Amounts of Personal Data
The surveyed platforms had different approaches to account registration, with over half (4 platforms) having no restriction on the number of accounts held by the same user, while individual platforms only required users not to register additional accounts to circumvent trading restrictions, or not to post the same item under multiple accounts. As for the use of personal data, 1 platform indicated that it would not use members’ information for marketing or promotion purposes, another platform would do so according to users’ preferences, while the remaining 5 platforms stated that users’ information would be used for marketing purposes. The survey also found that 1 platform indiscriminately required all sellers to first link their accounts to another account of theirs with a designated third-party payment company, upload proof of address and a copy of their identity card, and then undergo “selfie” identity verification to process payments made on the platform. However, this second-hand platform had ceased to support its payment function way back in June 2021, which, to sellers who only use the basic functions of the Hong Kong website, registering an account with a third-party payment company is both redundant and may lead to unnecessary disclosure of large amounts of personal information. The Council urges the platform concerned to take immediate improvement measures.
In terms of fees, there is generally no handling or listing charges unless users required additional services, such as adding a subheading to the listing or listing extra items after exceeding the seller’s quota. If users wish to increase exposure of their listings, 2 platforms offered paid advertising services, with charges depending on the type of promotion, coverage, number of days, etc. However, the survey found the pricing information on 1 platform to be confusing while the information given by customer service staff was also inconsistent, making it difficult for users to understand the actual charging method. It is the trader’s basic responsibility to clearly explain their latest charging methods and service details, and this practice is in dire need for improvement.
Platform Not Responsible for Quality and Authenticity of Items Traded
The versatile offerings available on trading platforms range from everyday items and clothing to real estate, cars and antiques, and some even list services such as the transfer of broadband services. Nevertheless, not everything can be traded on these platforms. All platforms had a list of prohibited items, such as goods and services that are banned or regulated by law, and items prohibited by the platforms. For example, 2 platforms prohibited the trading of all alcoholic beverages, and 1 platform prohibited the buying and selling of event tickets such as concert tickets.
Aside from items on the prohibited list, all platforms basically allowed users to upload items for sale freely, but most platforms only provided basic transaction protection measures such as account verification, user reviews, and reporting functions. Nearly half (3) of the platforms displayed transaction safety information on the payment or product pages, yet none of the platforms implemented counterfeit check mechanisms or return safeguards. Only 2 platforms had a dispute resolution mechanism, which could help users resolve disputes and take necessary disciplinary measures against users concerned, including comment bans or even permanent suspension. Some platforms (3) also used third-party tools, IP addresses, or scanning and analysis of user messages to detect fraudulent behaviour, with a view to intercepting fraud at an earlier stage.
At present, most transactional protection measures provided are voluntarily imposed by the platforms themselves, with most platforms even stating in their terms of use that they only provide a trading venue for users, and will not intervene in the transaction process, or assume any responsibility for the quality and authenticity of items traded. There is also no clear definition of their liability under current legislations. The Council recommends that the community explore and study the need and feasibility of regulation, and that platforms should strengthen and review relevant measures, such as introducing a return mechanism to Hong Kong users and exploring the possibility of authentication of counterfeit goods, in order to reduce transactional disputes and protect consumer rights.
Sellers Should Comply with Relevant Legislation When Placing Articles for Sale
Under section 7(1)(a) of the Trade Description Ordinance, it is an offence for a person to apply a false trade description to any goods in the course of trade or business; or to supply or offer to supply any goods to which a false trade description is applied. The Ordinance also makes it an offence for a person to possess for sale or for any purpose of trade or manufacture any goods to which a false trade description is applied. However, the Ordinance may not necessarily apply to transactions between consumers, and whether a seller would be regarded as a “trader” depends on a variety of factors. If a seller sells counterfeit goods online, he or she is in breach of section 9(2) of the Trade Descriptions Ordinance, which also regulates transactions between consumers.
If a seller knows that an article is stolen goods upon receipt, he or she may commit an offence under section 24 of the Theft Ordinance. If a seller knows or believes that an article is stolen but still sells it through an online platform, he or she may have committed an offence under section 25 of the Organized and Serious Crimes Ordinance. In addition, the Council is aware that some users may sell real estate on the platform. Under the Estate Agents Ordinance, it is a criminal offence to engage in estate agency work without a licence, and users without a licence should not sell properties on such platforms for third parties, so as to avoid committing a crime inadvertently.
A Buyer Who Knowingly Purchases Stolen Goods Commits an Offence
Owing to the limited liability of platforms and sellers’ self-regulation on the quality and authenticity of goods, buyers must be vigilant at all times when trading on online platforms. If a buyer receives or purchases an item and continues to complete the transaction despite knowing or believing it to be stolen, or if they handle stolen goods, they will also be committing an offence under the Theft Ordinance. The Council reminds consumers that while existing laws provide individual protection for different consumer activities, due to the wide variety of items available on online platforms, the difficulty in knowing the true identity of the seller and the authenticity of the goods traded, consumers should pay extra heed for high-value transactions. For instance, if a piece of antique catches one’s eye, ask the seller for relevant proof or seek expert advice to protect their own consumer rights.
Despite the good intention of online second-hand platforms, given their convenience and the possibility to resell goods to those in need, there is currently insufficient consumer safeguard for transactions on online platforms while the rights and responsibilities are unclear. In the event of a dispute, consumers may not be able to obtain appropriate assistance from platforms, and may have difficulty in recovering their losses. When using these platforms, consumers should be mindful of the following:
- Review the other party’s user profile before performing a transaction. If the account has a poor rating or is completely new, assess the risk of the transaction;
- Some fraudsters may claim or request the use of the platform’s secure transaction function to obtain credit card information from victims. Consumers should neither open nor fill in any information when they receive an unverified web link, and should immediately cease transaction and notify the platform to prevent data theft;
- Protect your privacy and do not disclose your personal, financial, or credit card information to third parties lightly;
- Keep records of transactions and conversations, which can be used as evidence in the event of a transaction dispute;
- If suspicious of a user or the origin of an item, make use of the platform’s reporting function to assist staff investigation, no matter whether the transaction is a sale, a barter, or even a gift.
Download the article (Chinese only): https://ccchoice.org/560secondhand
Consumer Council reserves all its right (including copyright) in respect of CHOICE magazine and Online CHOICE.