Defend consumers

PUBLISHED : Saturday, 21 October, 1995, 12:00am
UPDATED : Saturday, 21 October, 1995, 12:00am

THE Consumer Council has scored a worthy victory in winning a settlement of $80,000 for clients who paid good money for a bad product. Sadly, it will not also be a famous victory since the defending company agreed to settle out of court to preserve its anonymity. For the many victims of the sharks in Hong Kong's commercial waters, it is good news that the Consumer Council is working on their behalf - and working on a payment-by-results basis. The lack of such a body has encouraged too many businesses to regard consumers as legitimate prey. Caveat emptor - let the buyer beware - is a good motto in any market. When consumer protection is rudimentary, it is the key to survival.

The Council's new mandate to pursue private complaints has been put to excellent use. But, for all its good work, it is not the high-profile campaigner that similar organisations in the West have become. To encourage companies to settle out of court, it gives details of neither the complainants nor the defendants.

The main reason for this is money. The Legal Action Fund has only $10 million to spend, and takes a 10 per cent commission on compensation it wins for members of the public who complain to it.

That kind of money will not go far if every case is fought through the courts. Anonymity is worth more than a few tens of thousands of dollars to companies with a reputation to preserve. Many will pay up rather than risk exposure. The Council can preserve its fund for when it is really needed.

But the organisation must consider carefully whether this policy will be a sufficient deterrent. Anonymity encourages offenders to offend again. It tells other unscrupulous operators they have nothing to fear. The worst that can happen is that they lose a few thousand dollars and customers are none the wiser. The Council's next action should be exemplary. Any company which abuses the trust of its clients deserves to lose its reputation, not just its money.