Speeches and Presentations



LCQ19: Telecommunications services billing disputes

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 28):

Question:

In reply to my question on November 2, 2011 on the issue of telecommunications service operators (TSOs) overcharging service fees, the Government said that when there was evidence indicating that a TSO might have breached the Telecommunications Ordinance (Cap.106) or the licensing conditions, the Office of the Telecommunications Authority (OFTA) (replaced by the Office of the Communications Authority (OFCA) since April 1, 2012) would carry out an investigation and penalise the TSO if the case was substantiated. Yet, I have still received complaints recently from a number of members of the public that TSOs had charged them for services that they had not applied for, or overcharged telecommunications service fees, thus causing them to suffer huge losses. In this connection, will the Government inform this Council:

(a) whether it knows the numbers of complaints received in the past 12 months by the former OFTA/OFCA and the Consumer Council respectively, which involved overcharging by TSOs and the names of TSOs in substantiated cases, broken down by type of telecommunications services (e.g. fixed-line phones, mobile phones, external telecommunications and broadband Internet access, etc.) and nature of the complaints;

(b) whether it knows, among the cases in (a), the number of those in which the complainants succeeded in getting compensation, as well as the names of TSOs which were prosecuted and the number of times such TSOs had been prosecuted; and

(c) apart from continuing to implement the existing measures to regulate TSOs, 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,

The telecommunications market in Hong Kong has been developing rapidly. The telecommunications services are pervasive and competitive. The Office of the Communications Authority (OFCA) (Note 1) 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. The Communications Authority (CA) (Note 1) is empowered by the Telecommunications Ordinance (TO) to regulate the telecommunications sector. When there is evidence indicating that an operator may have breached the TO or the licensing conditions, the CA will conduct an investigation and penalise the operator if there is sufficient evidence to substantiate the case.

The Government's reply to the member's question is as follows:

(a) The number of complaints on billing disputes (Note 2) received by OFCA from November 2011 to October 2012, broken down by the type of services, is set out below:

November 2011 to
October 2012
Fixed services87
Mobile services872
Internet access services105
Others (e.g. external communications services) 24
--------------------------------------------------------------
Total 1088

The number of complaints on billing disputes (Note 2) received by CC from November 2011 to October 2012, broken down by the type of services, is set out below:

November 2011 to
October 2012
Fixed services271
Mobile telephone services964
Mobile data services712
Internet access services 663
Others (e.g. external communications services) 583
--------------------------------------------------------------
Total3193

Not all complaint cases 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, OFCA 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, OFCA and CC do not have the right to intervene directly in such cases. However, OFCA 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), OFCA referred to the operators and mediated in 901 cases with the consent of the complainants, and 496 (55%) of them have been settled. CC referred to the operators and mediated in 2 849 cases with the consent of the complainants, and 2 157 (76%) of them have been settled. For the remaining cases, OFCA and CC have requested the operators to handle them properly. In the past year, insofar as complaints on billing disputes are concerned, OFCA did not find any substantiated breaches of the TO or licensing conditions by the operators on which the imposition of a penalty or fine was required.

(c) At present, licences issued by the CA to the telecommunications service operators include provisions 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 the 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 the TO or the licensing conditions, the CA will commence investigation and penalise the operator if there is sufficient evidence to substantiate the case.

OFCA 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. As regards telecommunications service contracts into which consumers enter, OFCA has been in active discussion with the telecommunications industry. 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 consumers, and introduces improvements in such aspects as contract details and arrangements for contract termination and renewal. So far, OFCA 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, the CA issued in October 2011 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. Effective from July 1, 2012, seven local fixed and five mobile network operators have pledged compliance with the Code of Practice.

The above measures have proved to be effective. For the period of the past 12 months ending October this year, the numbers of complaints on billing disputes received by OFCA and CC have dropped by nearly 17% and by around 14% respectively as compared to the same period of last year.

Moreover, as regards the billing disputes between the customers and telecommunications service providers, OFCA has been in active discussion with the Communications Association of Hong Kong. A two-year pilot run of the Customer Complaint Settlement Scheme (CCSS) was officially launched in November 2012 to resolve billing disputes in deadlock between the telecommunications service providers and their customers through mediation.

OFCA will closely monitor the implementation and effectiveness of the above measures, and consider enhanced or new measures to protect the right and interest of consumers, in the light of operators' experience and consumers' views. The Administration 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. In July 2012, the Legislative Council enacted the Trade Description (Unfair Trade Practices) (Amendment) Ordinance 2012 (Amendment Ordinance) which aims to tackle unfair trade practices more effectively. The Amendment Ordinance expands the scope of the Trade Description Ordinance (Cap. 362) to cover services, and prohibit commonly found unfair trade practices including false trade descriptions of services, misleading omissions, aggressive commercial practices, bait advertising, bait-and-switch and wrongly accepting payment. The amendments will be applicable to telecommunications services. The enforcement power has been conferred on the CA in respect of the telecommunications services. The current plan of the Administration is to commence the Amendment Ordinance in 2013.

(Note 1) Pursuant to the Communications Authority Ordinance (Cap 616), with effect from April 1, 2012, all duties and powers of the Telecommunications Authority are conferred on the Communications Authority (CA), and all duties and powers of the Office of the Telecommunications Authority are conferred on the Office of the Communications Authority, the executive arm of the CA.

(Note 2) 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 OFCA nor CC further categorises complaints on billing disputes received.

Wednesday, November 28, 2012