Why scammed consumers in China are shunning their right to fight for compensation

PUBLISHED : Tuesday, 15 March, 2016, 11:55am
UPDATED : Tuesday, 15 March, 2016, 1:46pm

Consumers in China unhappy with their purchases stay quiet rather than fight for their rights because they think trying to get compensation is too time consuming and costly, according to analysts.

China’s consumer protection law was introduced over 20 years ago and has recently been revised, but the legislation is still not encouraging shoppers to seek redress, the experts said.

The consumer law, which has long been criticised for having an excessive number of loopholes, was amended two years ago.

Among the changes made were raising the level of compensation for consumers who get swindled to three times their initial payment. Minimum compensation is set at 500 yuan (HK$600).

The law also added clauses requiring financial institutions to release full information about their products to clients. Online shoppers also have “regret rights”, meaning they can return goods within a set period if they are unhappy.

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Professor Liu Junhai, an expert based at the law school at Renmin University, said consumer rights were generally better protected than before thanks to more choice for shoppers in the market and the higher importance attached by businesses to maintaining their reputation for quality and fairness.

But the old problem remained that people felt it was too complicated to take action to fight for their rights, he said.

“For companies which sell goods or services, the cost for them to violate laws is small compared with the benefits,” Liu said.

The opposite was the case for consumers taking on businesses to protect their rights, he said.

“I often use a metaphor to describe the problem: killing a cow in order to get back just a chick,” said Liu.

Li Shangbin, a Shanghai-based lawyer specialising in civil cases, said his profession rarely handled cases from consumers suing businesses over their purchases.

“It’s because people’s losses are small, but if they hire lawyers they would pay at least thousands of yuan.

“They also think litigation is time consuming as any lawsuit will last for at least several months,” he said. “Perhaps the most effective way is to put the incident under the spotlight.”

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One highly publicised consumer rights case last year involved a tourist in Qingdao who was charged 38 yuan for a single steamed prawn at a seafood stall. He paid 1,520 yuan for a plate.

His experience attracted widespread attention after it was exposed on the internet. The authorities in Qingdao finally fined the restaurant 90,000 yuan.

Another case of excessive charging for food happened in Harbin in Heilongjiang province last month.

A tourist was charged more than 7,000 yuan for 5 kg of “wildly-grown fish” at a restaurant.

He and his companions were beaten up when they initially refused to pay the bill.

They called the police, but they refused to get involved.

The city government later fined the restaurant 500,000 yuan and are investing the conduct of the police and government department officials after the case was highlighted on the internet.

Liu said the two cases showed that China was far from creating a culture that actively safeguarded consumer rights.

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Old people and rural residents, as well as tourists, were among the most vulnerable groups facing a higher risk of being cheated, he said.

“Old people easily get conned when buying financial, tourism and health-enhancement related products. For farmers, they often buy fake seeds, pesticides or home appliances,” said Liu.

“Under these scenarios, these people usually lament their bad luck rather than thinking of ways to battle for their rights.”