Code for phone firms in effect

A code of practice giving some customers of phone companies and internet service providers a cooling-off period after signing a contract has come into force, but has been criticised as too narrow in scope.

The cooling-off period applies to people who agree to sign contracts with company staff who knock on their doors. Those who sign up on the street or in response to telephone cold-callers are not covered. Commercial users are not covered either.

The voluntary code, agreed between the telecoms watchdog Ofta and 11 companies with 98 per cent of the telecommunications market, gives all new customers a cooling-off period of seven days unless they accept a promotional gift or allow installation of a company device in their home before the seven days are up.

The code will also require operators to:

- print all terms on contracts in a type size that is clearly readable;

- allow customers to withdraw from free trial services without any surcharge;

- notify customers at least 30 days before a contract terminates;

- tell them about any change in contract terms; and

- seek customers' consent before renewing contracts.

Ofta drew up the code, which was implemented this month, in light of the growing number of complaints it received. Last year there were 5,711, a rise of 41 per cent from 2009. Of the complaints, 1,466 were related to contractual disputes, up 54 per cent from 2009.

Esmond Chiu Chor-tat, Ofta's senior telecommunications engineer, said the watchdog would review the code's effectiveness and might extend its scope.

'The most serious problem is that service providers often knock on people's doors, especially the elderly, at night to promote their services. We need to protect them. But customers have more choices when they receive cold calls or encounter on-street promoters. They can choose to hang up or go away.'

Connie Lau Yin-hing, chief executive of the Consumer Council, said the cooling-off provision was too narrow and would not protect impulsive consumers who came across promoters on the street or over the telephone. The council received more complaints about the telecommunications industry than any other last year - a total of 9,054, barely changed from the 2009 figure.

Fred Li Wah-ming, the Democratic Party's spokesman on consumer affairs, said the code would not achieve much since it was voluntary and companies breaching it would not be punished.

Ofta assistant director Danny Lau Kwong-cheung said it would continue handling complaints, but believed the code would help bring down the number of grievances.

He said Ofta believed market forces were the best regulator for what was a highly competitive industry. 'Only when we see the market fail will we intervene,' he said.

However, Lau said the code could be made mandatory if the situation warranted it.