Despite the numerous publications issued by the Consumer Council as well as the effort put into driving public policies,the role of the Consumer Council has been criticised for lacking law enforcement power,ineffectiveness,and weak coordination with other government departments.
Limited services
According to critics,the service provided by the Consumer Council is rather limited. The duties of the council are limited to mediating disputes,providing information about products and industries,providing views to the government,etc. However,the council's impact on government decisions is rather indirect. For instance,the theme of World Consumer Rights Day 2021 is on tackling plastic pollution, [79] encouraging consumers around the world to adopt a more sustainable way of consumption. All the Consumer Council can do for World Consumer Rights Day was to promote the message or to encourage the government and commercial sector to be more sustainable. Yet,when it comes to what policies would be implemented to promote sustainable consumption and plastic reduction,the Consumer Council hardly has a stake in policy formulations. [80]
In terms of protecting Consumer rights,the Consumer Council receives consumer complaints involving the violation of Trade Descriptions Ordinance and Consumer Goods Safety Ordinance. Critics pointed out that the law enforcement for the violation of the two ordinances is mostly done by the Customs and Excise Department. The Consumer Council plays no more than a mediating role. When complaint cases have to be resolved in court,the Consumer Council actually lacks the power to initiate proceedings. This leads to difficulties for consumers to gather evidence and bring proceedings as consumers are mostly laymen without much legal knowledge. [81] Although the council is willing to assist in the mediation of consumer complaints,in its 2008 study report,it was pointed out that criminal sanctions by public agencies are difficult to achieve. As a result,aggrieved consumers are faced with the daunting task of taking civil action on their own as the only redress option;apart from seeking the assistance of the council for mediation. [82]
There are also criticisms on the limited power of Hong Kong's Consumer Council. Critics compare the Consumer Council with Australian Competition and Consumer Commission,a statutory authority whose role is to enforce the Competition and Consumer Act 2010 (CCA). [83] Contrasting to Hong Kong's Consumer Council,the commission is given investigatory and law enforcement power whenever there are possible contraventions of the CCA and Australian Consumer Law. The Australian courts have upheld the CCA powers for a range of investigative purposes,including the power to provide the commission with evidence and to initiate proceedings on behalf of the consumers,which reduces consumers’time and expenses engaged in legal proceedings. [84]
Back in 2001,the Consumer Council suggested amending the Consumer Council Ordinance,which proposed to give the council the right to bring proceedings in court on behalf of consumers. [85] In the Consumer Council Ordinance Review submitted by the Consumer Council,it was found out that the Council relied on the co-operation of the parties concerned to supply them with the necessary information to investigate complaints relating to competition as it does not have the power to ‘demand’information. It made a proposal of amending the Ordinance to confer on it the power to sue on behalf of customers.
However,such proposed amendments were not made. Its mediating role was still emphasised. Furthermore,the government considered that the Customs and Excise Department has appropriate investigation powers,including the power to authorise the search of premises,seize goods or require the testing of products. As such,the suggestion of granting the Consumer Council statutory power to order the provision of information by persons concerned in consumer complaints was also found not necessary by the government. [86]
Limited effectiveness
In 2010,the Chinese University of Hong Kong conducted the very first public opinion survey on behalf of the Consumer Council. Among 3,120 respondents interviewed,when they face problems with the products they bought or dissatisfaction with the service received,only 37% are willing to seek help from the Consumer Council. Anthony Cheung,the Chairman of the Consumer Council back then acknowledged the lack of law enforcement power of the Consumer Council. Yet,he mentioned that an average of 70-80% of the complaints could be resolved by mediation. Cheung also mentioned if prosecuting power is included in Consumer Council's duties,it may affect the mediation work of the council.
Still,criticisms revolving around the Council being a toothless tiger are prevalent. Former Legislative Councillor James To Kun-sun commented that the biggest power of the council was to defame poor-quality shops. However,the shops can still change their names and do business again. [87] Eddy Chan,the Convenor of the Lehman Brothers Minibond Sufferers criticised that they had sought help from the Consumer Council for their investment loss from minibonds. At last,their case was referred to government departments for mediation. He criticised that the lack of law enforcement power will only make the Consumer Council a toothless tiger,which is unable to protect consumers effectively.
Areas of improvement identified by the Audit Commission
In 2018,the Director of Audit’s letter to the President of the Legislative Council published an audit on “Consumer protection against unfair trade practices,unsafe goods,and short weights and measures”. The director concluded the following inadequacies:
(1) Inadequacies in taking follow-up actions on complaints
(2) Inadequate monitoring of long-outstanding complaint cases
(3) Need to enhance the computer system to support the identification of traders with repeated undesirable trade practices
(4) Need to take forward the revamp project of CHOICE magazine [88]
In a sample check of 30 complaint cases received from April 2013 to September 2017,it was revealed that there were omissions in issuing reminder letters to traders which did not respond to the Consumer Council's inquiry letters and delays in issuing reminders. There were inadequate follow-up actions with the traders who did not respond to the reminder letters and in some cases,the complainants were only informed of the case's progress more than 30 days after the traders had not responded to the reminder letters.
According to the Consumer Council's operational manual,after a case is concluded,the case officer should submit the case in the CCMS to the supervisor for review and approval for case closure. After approval,a final reply letter will be sent to notify the complainant of the closure of the case. It was found that 16% of the cases had been outstanding for almost three years or more due to errors in the council's computer system.
Although the Consumer Council's computer system could generate reports showing traders/industries with the highest numbers of complaints in every month,there was no laid-down procedure to identify traders with repeated undesirable trade practices. There is no analysis of whether the complaints are related to their undesirable trade practices which are one of the factors for considering naming and public reprimand action. Moreover,the lack of data mining capability of the system makes it difficult to extract other useful information such as dispute resolution rates of traders for analysis. As such,there is a risk that some serious cases of undesirable trade practices may not have been brought up by the system for considering further actions.
The CHOICE magazine has played an important role in helping consumers to make informed purchases since its introduction. Until 2017,findings of around 1,300 product tests,2,280 in-depth studies,and 580 market surveys have been released. However,as online media takes over printed news,the sale of CHOICE magazine had dropped by 23% from an average of 27,428 copies a month in 2009–10 to 21,033 a month in 2016–17. There is a need for the Consumer Council to create content that can adapt to changing audience profiles and preferences in receiving information.
In addition to the four main problems identified,the report also identified the problem of low usage of a voluntary mediation scheme implemented by the Office of the Communications Authority (OFCA). To address issues of billing disputes in the telecommunications services,OFCA has implemented a voluntary mediation scheme,namely the Customer Complaint Settlement Scheme (CCSS) to help resolve billing disputes in deadlock between the telecommunications service providers and their customers. The CCSS's handling capacity is 400 cases a year. However,the number of cases referred to the CCSS from November 2012 to October 2017 averaged only 74 cases a year,representing a utilisation rate of about 18.5%.
Furthermore,there are also inadequacies in the information exchange and case referral between the enforcement agencies and Consumer Council. For instance,the computer systems of the Consumer Council and the Customs and Excise Department (C&ED) are not able to receive information from each other. According to the C&ED,further system enhancements were required for referring cases to the CC for conciliation. The report also noted that OFCA was not involved in setting up the electronic platform for information exchange and case referral.
In regards to the Consumer Legal Action Fund (CLAF), [27] which is designed to “provide consumers easier access to legal remedies by providing them financial and legal assistance in meritorious cases,particularly those where a number of complaints have similar grievances”, [89] it was found out by the Law Reform Commission of Hong Kong that the fund is grossly underutilised. On average,there were only two to three successful applications per year between 1995 and 2012 for the CLAF. [90] Since its establishment and up until the year under review,the CLAF has received a total of 1,406 applications and has granted assistance to 718 applications. [91]
Besides,there are numerous disincentives for citizens to apply for CLAF. Firstly,there is a non-refundable application fee payable at the time of application. If the applicant's case is to be tried in the Small Claims Tribunal,the application fee is HK$100. For cases to be tried in the District Court or other higher courts,the application fee is HK$1,000. The application fee is non-refundable even if the application is rejected. [92] Secondly,applicants are made liable for “all losses,costs,expenses,claims,damages and liabilities”in the event that the claim is unsuccessful due to the applicant not providing true and accurate information,presumably even if such omission was committed unwittingly. [93] Thirdly,assistance from the Fund can be terminated “at any time”, [94] which may hinder citizens’interests in applying CLAF since it is uncertain whether they can have sufficient monetary support to pursue their claims.
