Speeches and Presentations



LCQ15: Sales practices of subscription television services

Following is a question by the Hon Wong Kwok-hing and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, at the Legislative Council meeting today (October 26):

Question:

I have previously received complaints alleging that some salespersons of domestic subscription television (TV) companies paid visits to the complainants' homes, entered their flats to repair TV sets or install TV set-top boxes using the excuse of facilitating members of the public to watch high definition TV programmes, and then induced them to sign service contracts. The complainants indicated that some of the salespersons had not mentioned that payment would be required when they were selling the service, or said that no payment would be required, but after the service contracts were signed, they then told the complainants that they were required to sign contracts of a long duration and pay the contract fees; when the customers requested to terminate the service, the procedure is very complicated, or they even needed to lodge complaints in order to cancel the contract. In this connection, will the Government inform this Council:

(a) whether it knows the number of complaints concerning subscription TV companies' sales practices of paying visits to residential units received or handled by the Consumer Council and relevant law enforcement departments in each of the past three years, as well as the details, amounts involved, and the outcome of such complaints;

(b) given that section 7M of the existing Telecommunications Ordinance (Cap 106) has expressly prohibited telecommunications service providers from engaging in sales practices which are misleading or deceptive, yet the sales practices of subscription TV are not subject to similar regulation, whether the authorities will consider amending the relevant ordinance to similarly regulate the sales practices of subscription TV; if they will, of the details and timetable; if not, the reasons for that;

(c) whether the authorities will, upon vetting and approving applications for or the renewal of subscription TV broadcasting licences, introduce relevant licence terms to expressly require the relevant companies to monitor strictly the sales practices adopted by their staff, so as to protect consumers' rights; if they will, of the details; if not, the reasons for that; and

(d) whether the authorities will carry out relevant publicity work to educate members of the public how to reject the aforesaid improper sales practices to avoid being deceived; if they will, of the details; if not, the reasons for that?

Reply:

President,

Regarding the questions raised by the Hon Wong Kwok-hing, my reply is as follows:

(a) The number of complaints received by the Consumer Council relating to the sales practices of subscription television (TV) service providers (mainly involving misrepresentation) in the past three years, as well as the amount involved and the number of cases settled through mediation are set out in the following table:

2008 2009 2010 2011
(January to
September)
Number of
complaints
207 396 546 346
Amount
involved ($)
79,860 198,867 236,771 188,765
Number of
cases settled
through mediation
154 251 379 212

The Customs and Excise Department, being the relevant law enforcement department, did not receive any relevant complaint in the past three years.

(b) and (c) The Telecommunications Ordinance (TO) (Chapter 106) regulates telecommunications matters, but it does not cover television services. It is therefore not feasible to prohibit subscription TV licensees from engaging in sales practices that are misleading or involve misrepresentation by expanding the scope of TO through legislative amendment.

On the other hand, the Broadcasting Ordinance (BO) (Cap 562) regulates broadcasting matters, but it does not empower the Broadcasting Authority (BA) to regulate the sales practices of subscription TV licensees. As the sales activities of such licensees are not subject to the regulation of BO or the BA, it is not feasible to incorporate relevant regulatory provisions into their licences. Nevertheless, when the BA receives complaints relating to the sales of subscription TV services, it will, with the consent of the complainants, refer the cases to the subscription TV licensees concerned for investigation and follow-up action. Past experience indicates that most cases can be settled through mediation.

To tackle unfair trade practices and protect consumers' interests, we plan to amend the Trade Descriptions Ordinance (Chapter 362) to prohibit unfair trade practices commonly found in different sectors, including false trade descriptions of services, misleading omissions, aggressive practices and bait-and-switch. The amended provisions will be applicable to the sales of subscription TV services. We are now pressing ahead with the relevant law drafting work.

(d) We have been in partnership with the Consumer Council in launching publicity and public education programmes to raise consumers' awareness. In respect of the sales practices of subscription TV service providers, the Consumer Council published in the May 2010 issue of its CHOICE magazine a feature article on the relevant complaints received and points to note for consumers.

Wednesday, October 26, 2011