Speeches and Presentations



LCQ15: Complaints on billing of telecommunications services

Following is a question by the Hon Albert Chan and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, at the Legislative Council meeting today (November 2):

Question:

In reply to my question on December 8, 2010 on the issue of excessive service fee-charging by telecommunications service providers, the Government said that when there was evidence to indicate that a service provider might breach the Telecommunications Ordinance (Cap. 106) or the licensing conditions, the Office of the Telecommunications Authority (OFTA) would carry out investigation and penalise the service providers in substantiated cases. Yet, I have still received complaints recently from a number of members of the public that they were charged by telecommunications service providers for services they did not apply for. In addition, some members of the public pointed out that the service charges of the telecommunications service providers were much higher than what they should actually pay, thus causing them to suffer huge losses. In this connection, will the Government inform this Council:

(a) whether it knows the number of complaints, received in the past 12 months by OFTA and the Consumer Council respectively, which involved excessive fee-charging by telecommunications service providers and the names of the service providers concerned, broken down by the type of telecommunications services (e.g. fixed-line telephones, mobile phones, external telecommunications and broadband Internet access, etc.) and the nature of complaints;

(b) whether it knows, among the cases in (a), the number of those in which the complainants sought compensation successfully, as well as the names of the telecommunications service providers which were prosecuted and the number of prosecutions instituted against them; and

(c) apart from continuing to implement the existing measures to regulate telecommunications service providers, whether the authorities will adopt new regulatory measures to better protect consumers' interests; if they will, of the details; if not, the reasons for that?

Reply:

President,

Hong Kong's telecommunications market has been developing rapidly. Fixed, mobile and broadband services are highly pervasive and competitive. At present, there are about 21 million users of telecommunications services in Hong Kong. The Office of the Telecommunications Authority (OFTA) and the Consumer Council (CC) receive complaints in respect of the billing of telecommunications services from time to time. Normally, such complaints will be referred to the service operators concerned direct for follow-up action. OFTA is empowered by the Telecommunications Ordinance (TO) to regulate the telecommunications sector. When there is evidence indicating that an operator may have breached TO or the licensing conditions, OFTA will conduct an investigation and penalise the operator if the case is substantiated.

My reply to the question is as follows:

(a) Since it takes time to process the relevant data, the Administration is unable to provide the number of complaints on billing disputes received in October 2011. The number of complaints on billing disputes (Note) received by OFTA from October 2010 to September 2011, broken down by the type of services, is set out below:

October 2010 to
September 2011
Fixed services 115
Mobile services 1 122
Internet access services 113
Others (e.g. external
communications services)
32
Total 1 382

The number of complaints on billing disputes (Note) received by CC from October 2010 to September 2011, broken down by the type of services, is set out below:

October 2010 to
September 2011
Fixed services 354
Mobile services 1 214
Internet access services 774
Others (e.g. external
communications services)
1 512
Total 3 854

Not all complaints are substantiated and some of them may be service enquiries only. Moreover, the numbers of complaints against individual operators may be affected by their customer bases. Therefore, in line with the established practice of handling consumer complaints, OFTA and CC will not disclose the names of the telecommunications service operators involved in the complaints.

(b) As most complaints in respect of billing disputes are contractual disputes between individual consumers and operators, OFTA and CC do not have the right to intervene directly in such cases. However, OFTA and CC have always endeavoured to help resolve contractual and billing disputes between consumers and operators through mediation. Among the complaints set out in part (a), OFTA referred to the operators and mediated in 1 100 cases with the consent of the complainants, and 578 (53%) of them have been settled. CC referred to the operators and mediated in 3 441 cases with the consent of the complainants, and 2 564 (75%) of them have been settled. For the remaining cases, OFTA and CC have requested the operators to handle them properly. In the past year, insofar as complaints on billing disputes are concerned, OFTA did not find any substantiated breaches of TO or licensing conditions on which the imposition of a penalty or fine was required.

(c) At present, licences issued by OFTA to the telecommunications service operators include conditions for protecting consumers. For instance, the licensee is required to ensure the accuracy and reliability of its metering equipment and billing system related to service usage. In addition, section 7M of TO expressly provides that a licensee shall not engage in misleading or deceptive conduct in providing telecommunications services, including promoting, marketing or advertising such services. If there is evidence indicating that an operator is in breach of TO or the licensing conditions, OFTA will commence investigation and penalise the operator if the case is substantiated.

OFTA has been closely monitoring the market situation by analysing consumer complaints and media coverage of telecommunications services, so as to understand public concerns and formulate timely measures for consumer protection. In June 2010, OFTA requested mobile network operators to implement a series of measures, including allowing customers to opt out of mobile data services and setting a charge ceiling and a usage cap, to prevent "bill shock" caused by unintentional or inadvertent use of mobile data services. As regards telecommunications service contracts into which consumers enter, OFTA has been in active discussion with the telecommunications industry on measures to improve such contracts. In July 2011, the industry formally implemented the Industry Code of Practice for Telecommunications Service Contracts (Industry Code) issued by the Communications Association of Hong Kong, an industry organisation, in collaboration with the major telecommunications service operators. The Industry Code provides guidelines on drawing up telecommunications service contracts for personal or residential users, and introduces improvements in such aspects as contract details and arrangements for contract termination and renewal.

The above measures have proved to be effective. From January to September this year, the numbers of complaints on billing disputes received by OFTA and CC have dropped substantially by nearly 30% and by around 29% respectively as compared to the same period of last year. So far, OFTA has not found any breaches of the Industry Code since its implementation.

In addition, to enhance the transparency of pricing in respect of chargeable items in telecommunications services, OFTA issued in October this year the Code of Practice in Relation to Billing Information and Payment Collection for Telecommunications Services, which provides guidelines on the information to be included in bills and on the arrangements for payment collection, for compliance by operators on a voluntary basis.

OFTA will closely monitor the implementation and effectiveness of the above measures, and consider enhanced or new measures to protect consumers, in the light of operators' experience and consumers' views. OFTA will continue to actively monitor the market situation with a view to identifying problems and formulating corresponding strategies in a timely manner.

Overall, the Administration attaches great importance to enhancing consumer protection. To tackle unfair trade practices more effectively, the Administration intends to amend the Trade Descriptions Ordinance (Cap.362) to prohibit commonly found unfair trade practices in consumer transactions, including false trade descriptions of services, misleading omissions, aggressive practices and bait-and-switch tactics. The amended provisions will be applicable to telecommunications services. We are now pressing ahead with the relevant law drafting work. (Note) While some complaints on billing disputes involve overcharging, some may involve other billing disputes such as consumers not being clear about the details of their tariff plans. As such, the figures in part (a) are not limited to complaints about overcharging. Neither OFTA nor CC further categorises complaints on billing disputes received.

Wednesday, November 2, 2011