Law

Law

The contracts that never let you go

PUBLISHED : Wednesday, 04 April, 2012, 12:00am
UPDATED : Wednesday, 04 April, 2012, 12:00am

The consumer watchdog has called on service providers to change contract terms that are unfair to customers, saying it has identified a dozen areas of concern.


Many standard consumer contracts are highly unfavourable to customers, the Consumer Council said. This was reflected by a rise in related complaints: the 1,185 received last year was 27 per cent more than in 2010.


But consumers are in no position to bargain with suppliers for changes to specific clauses: they can either sign the contract or not.


By far the main cause for complaint, the council said, concerned the automatic renewal of contracts and difficulties in terminating services. That triggered 807 complaints last year - a 60 per cent rise over 2010.


Connie Lau Yin-hing, chief executive of the council, illustrated some of the difficulties consumers faced. 'There are contract terms that require customers to go to offices of service providers in person when they want to end the contract. Others specify that people should fill in a termination form to end their service, but the form is usually not available.'


Another clause commonly found on contracts states suppliers retain the right of final decision in any dispute arising from the contract. Complaints about this more than doubled last year.


The council lists another 10 unfair clauses in a report released yesterday. They include a unilateral right for the supplier to change terms without a valid reason (for example, a pay TV station can change its programmes without notifying customers); clauses that ban customers from taking grievances to court or the press, terms imposing excessive cancellation fees and others that refuse refunds.


Unreasonable exclusion clauses also add to consumers' risk. In mobile phone service contracts, there was a clause that freed the company of any responsibility if customers incurred any loss when they shifted from one telecoms company to another, said Ambrose Ho Pui-him, chairman of the council's publicity and community relations committee.


To gain consumers' trust, service providers should amend or delete unfair terms on a voluntary basis, he said. The council had been in discussions with the beauty services sector, and they showed willingness to adopt some of the council's recommendations when drafting contracts, he said.


In the long run, Ho said the government should introduce a law similar to one passed in the Britain in 1999 that listed about 20 criteria for deciding whether a term in a contract was unfair. In Hong Kong, several ordinances covered consumer rights, but none targeted unfair contract terms specifically, he said.


The government has taken an amendment to the Trade Descriptions Ordinance to the Legislative Council. However, an initial idea of introducing a compulsory cooling-off period - during which consumers can withdraw from the contract - was dropped due to complexity in enforcement.