Major Speeches, Presentations and Press Releases



LCQ20: Billing disputes in relation to 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, in the Legislative Council today (November 20):

Question:

    In reply to my question on November 27, 2013 on the issue of telecommunications service operators (TSOs) overcharging service fees, the Government said that where there was evidence indicating that a TSO might have breached the Telecommunications Ordinance (Cap. 106) or the licence conditions, the Communications Authority would conduct an investigation and penalize 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:

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

(2) whether it knows, among the cases in (1), 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 they had been prosecuted; and

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

Reply:

President,

     The Communications Authority (CA) is an independent statutory body. It was established on April 1, 2012 under the Communications Authority Ordinance (Cap. 616) as the unified regulator of the telecommunications and broadcasting sectors in Hong Kong in accordance with, inter alia, the Telecommunications Ordinance (Cap. 106) (TO) and Broadcasting Ordinance (Cap. 562) (BO) respectively.

     The telecommunications market in Hong Kong has been developing rapidly and telecommunications services are highly pervasive and competitive. The Office of the Communications Authority (OFCA) and the Consumer Council (CC) receive complaints from consumers in respect of the billing of telecommunications services from time to time. Normally, such complaints will, with the consent of the complainants, be referred to the service operators concerned direct for follow-up. Where there is evidence indicating that an operator may have breached the TO or the licence conditions, the CA will, in accordance with the authority conferred by the TO, conduct an investigation and penalise the operator if there is sufficient evidence to substantiate the case of contravention.

     In addition, the amended Trade Descriptions Ordinance (Cap. 362) (TDO) has come into effect on July 19, 2013, prohibiting traders from deploying the unfair trade practices prescribed under the Ordinance against consumers. The Customs and Excise Department is the major enforcement agency responsible for enforcing the TDO. Concurrent jurisdiction is conferred on the CA to enforce the provisions of the TDO in relation to the commercial practices of licensees under the TO and the BO that are directly connected with the provision of telecommunications or broadcasting services under the relevant Ordinances.

     With respect to the Member's questions, my reply is as follow:

(1) The number of complaints on billing disputes (Note) in relation to telecommunications services received by the OFCA from November 2013 to October 2014, broken down by the type of services, is set out below:

Fixed Services                                    58
Mobile Services                                1 002
Internet Services                                 53
Others (e.g. external communications services)    12
Total                                          1 125

     The number of complaints on billing disputes (Note) in relation to telecommunications services received by the CC over the same period, broken down by the type of services, is set out below:

Fixed Services                                   298
Mobile Telephone Services                      1 470
Mobile Data Services                           1 118
Internet Services                                519
Others (e.g. external communications services)   457
Total                                           3862

(Note): The number of complaints on billing disputes includes all complaints in relation to billing issues. 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 the above reply are not limited to complaints about overcharging. Neither the OFCA nor the CC further categorises complaints on the billing disputes received.

     Not all complaints are substantiated and the above figures may include some cases that are only enquiries in nature. Moreover, the numbers of complaints against individual operators may be affected by the numbers of their customer. Therefore, in line with the established practice of handling consumer complaints, the OFCA and the CC will not disclose the names of individual operators involved in the complaints and the number of complaints concerned.

(2) Among the complaint cases set out in (1), as at October 31, 2014, the OFCA referred to the operators and assisted in mediating 996 cases with the consent of the complainants, and 560 (56%) of these cases have been settled. The CC referred to the operators and assisted in mediating 2 636 cases with the consent of the complainants, and 2 274 (86%) of them have been settled. The OFCA and the CC have also requested the operators to properly handle the remaining cases that have been referred and yet been settled. In the past year, insofar as complaints on billing disputes are concerned, the OFCA did not find any substantiated cases of breaches of the TO or licensing conditions by the operators where imposition of a penalty or fine was required.

(3) At present, licences issued by the CA to the telecommunications service operators require licensees to ensure the accuracy and reliability of its metering equipment and billing system related to service usage. Meanwhile, to better protect consumers' rights and interests, the CA has implemented the following measures with regard to consumers' complaints on billing of telecommunications services.

Code of Practice in Relation to Billing Information and Payment Collection for Telecommunications Services

     With a view to enhancing the transparency of pricing in respect of chargeable items in the provision of telecommunications services, the CA issued in October 2011 the Code of Practice in Relation to Billing Information and Payment Collection for Telecommunications Services (Code of Practice), 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. Seven local fixed network operators and four mobile network operators have pledged compliance with the above Code of Practice, effective from July 1, 2012.

Industry Code of Practice for Telecommunications Service Contracts

     Regarding telecommunications service contracts, in order to enhance the transparency of the process of drawing up contracts, the Industry Code of Practice for Telecommunications Service Contracts (Industry Code) was formulated by the Communications Association of Hong Kong (CAHK), an industry organisation, in collaboration with the major operators after active discussions between the OFCA and the industry. The Industry Code has been implemented since July 2011. It provides guidelines on drawing up fair, balanced and reasonable telecommunications service contracts for the industry and consumers in order to improve matters in relation to the content of contracts and the arrangements for contract termination and renewal, etc. Also, it facilitates consumers to better understand the content of the services they subscribe to and the detailed tariff information. We believe that the Industry Code can effectively improve the transparency of the process of drawing up contracts and increase customers' level of satisfaction, as well as reduce the number of contractual disputes.

     To further protect consumers' rights and interests, the OFCA put forward some suggestions to the CAHK last year for improving the Industry Code. After several rounds of discussion between the CAHK and the operators, the Industry Code was revised in end October this year. The revised Industry Code will be implemented by operators in the first half of 2015 to further protect the rights and interests of consumers. The OFCA will continue to monitor the implementation of the Industry Code.

Customer Complaint Settlement Scheme

     Besides, to help resolve billing disputes in deadlock between consumers and their telecommunications service providers, the telecommunications industry has set up a voluntary "Customer Complaint Settlement Scheme" (CCSS) with the active facilitation by OFCA. The scheme is run for a trial period of two years as from November 2012. The CCSS helps resolve, by means of mediation, billing disputes between the concerned parties without the involvement of formal legal procedures. At present, all major telecommunications service providers participate in the CCSS.

     Under the CCSS, mediation services are provided by an independent mediation service centre (the Service Centre) set up by the CAHK. OFCA supports the CCSS by sponsoring the operating expenses of the scheme, assessing whether a consumer's case is eligible for acceptance, actively monitoring the performance and governance of the scheme, and providing other administrative support.

     The CCSS has been running smoothly since its launch. During the two-year trial period (i.e. from November 1, 2012 to October 31, 2014), a total of 357 eligible cases were received by the CCSS. Among them, 159 cases were settled through further negotiation between the consumers and their telecommunications service providers before referral to the Service Centre by the OFCA, 182 were successfully settled after referral by the OFCA to the Service Centre for processing, one was not settled after mediation and the remaining 15 are pending mediation to be arranged by the Service Centre. In addition, according to the opinion surveys conducted by the Service Centre to consumers and telecommunications service providers whom mediation services had been provided to, it was found that both the consumers and the telecommunications service providers have high regard for the CCSS. The OFCA and the telecommunications industry are now assessing the effectiveness of the CCSS for the purpose of deciding the way forward.

Enforcement against Unfair Trade Practices According to the TDO

     In addition to the above measures to protect users of telecommunications services, the amended TDO, effective from July 2013, prohibits the traders from deploying the following unfair trade practices against consumers, including false trade descriptions of services, misleading omissions, aggressive commercial practices, bait advertising, bait-and-switch and wrongly accepting payment. If the collection of telecommunications service fees by operators involve unfair trade practices, such as making false trade descriptions or misleading omissions on the services provided, the CA will follow-up and take enforcement actions under the TDO. Since the unfair trade practices specified under the TDO are criminal offences, of which the penalties include a maximum fine of $500,000 and imprisonment for five years, this should have significant deterrent effect on all telecommunications service licensees.

     The OFCA will continue to closely monitor the implementation and effectiveness of the above measures, and will improve the above measures to further protect the rights and interests of consumers if necessary, in the light of the operators' experience and consumers' views. The CC will continue to promote consumer education to assist consumers in making suitable consumer choices. The CC also works with operators and regulators and makes suggestions for improvement from time to time.

Ends/Thursday, November 20, 2014
Issued at HKT 15:26