Speeches and Presentations



LCQ16: Complaints relating to online purchases

Following is a question by the Hon Starry Lee and a written reply by the Acting Secretary for Financial Services and the Treasury, Ms Julia Leung, (in the absence of the Secretary for Commerce and Economic Development) in the Legislative Council today (May 16):

Question:

As pointed out by the Consumer Council, there were a total of 829 complaint cases involving online purchases last year, representing a significant increase of 89 per cent over the figure in 2010; among these complaints, the number of those involving group purchases increased from only two cases in 2010 to 548 last year. Such complaints mainly involved beauty treatments, medical services, dining, cosmetics and fashion products, etc., and 32 per cent of the cases complained about not being able to receive discount coupons or make advance booking for services after payment, and those concerning dissatisfaction with the quality of goods or services as well as shop closure accounted for 20 per cent and 13 per cent respectively. In this connection, will the Government inform this Council:

(a) given that quite a number of group purchase web sites contain disclaimers of liabilities for any defect in goods or services, whether it has assessed if such disclaimers have any legal effect; of the assessment result; whether the authorities will study now, in the light of the relevant problem, restrictions should be imposed on the posting of such disclaimers on group purchase web sites;

(b) whether the authorities will in the future study in detail the liabilities of the intermediaries vis-a-vis those of the final providers of services/goods in the contracts for online group purchases, so as to clarify their respective liabilities and plug the loopholes in the existing legislation; and

(c) whether the existing legislation imposes any restriction (e.g. imposing specific regulations on pharmaceutical and food products sold online with a view to safeguarding consumers' safety and health) on the types of goods to be sold online; if so, of the details; if not, whether the authorities will consider amending the legislation, with a view to stepping up efforts in safeguarding the interest of consumers making purchases online?

Reply:

President,

My reply to the various parts of the question is as follows:

(a) Existing legislation already imposes controls on contracts relating to consumer transactions. It applies to both traditional face-to-face transactions and online business. The Control of Exemption Clauses Ordinance (Cap. 71) prohibits traders from evading certain types of civil liability by means of contract terms or other means. The Ordinance also regulates exemption clauses that might be incorporated in contracts for the sale of goods to consumers. For instance, section 11 of the Ordinance provides that when a trader is dealing with a consumer, he cannot exclude or restrict, by reference to any contract term, the liability for breach of obligations arising from section 15, 16 or 17 of the Sale of Goods Ordinance (Cap. 26) (i.e. seller's implied undertakings as to conformity of goods with description or sample, or as to their quality or fitness for a particular purpose). The Supply of Services (Implied Terms) Ordinance (Cap. 457) imposes similar requirements on consumer contracts in relation to services. In addition, the Unconscionable Contracts Ordinance (Cap. 458) empowers the court to determine if a contract (or part of it) is unconscionable, and provides for a range of relief measures for aggrieved consumers who enter into unconscionable contracts.

(b) The liability and role of parties involved in a contract depend on the actual contents of the contract. Aggrieved consumers may lodge claims under the law of contract and/or the common law according to the actual circumstances (including contract terms) of the case concerned. Furthermore, the Trade Descriptions (Unfair Trade Practices) (Amendment) Bill 2012, which has been submitted to this Council for scrutiny, contains provisions which deal with the liability of traders and their agents as well as principal officers of bodies corporate involved. In their investigation, enforcement agencies will take into account all relevant evidence and circumstances and ascertain the liability of persons who are suspected to have engaged in unfair trade practices.

(c) The Toys and Children's Products Safety Ordinance (Cap. 424) and the Consumer Goods Safety Ordinance (Cap. 456) regulate the safety of products available in our market. Pursuant to these two Ordinances, toys, designated children's products and other general consumer goods manufactured in, imported to or supplied in Hong Kong must comply with specified safety requirements or standards. The quality and sale of pharmaceutical and food products are subject to the control of the Public Health and Municipal Services Ordinance (Cap. 132), the Food Safety Ordinance (Cap. 612), the Pharmacy and Poisons Ordinance (Cap. 138), the Antibiotics Ordinance (Cap. 137) and the Dangerous Drugs Ordinance (Cap. 134). These pieces of legislation are applicable to traditional face-to-face sales and online transactions.

Relevant enforcement agencies, including the Customs and Excise Department, the Department of Health and the Centre for Food Safety of the Food and Environmental Hygiene Department, will continue to deploy manpower to patrol the Internet in accordance with actual needs.

Wednesday, May 16, 2012