Hong Kong’s consumer protection needs strengthening as city’s ‘buyer beware’ approach promotes waste

David Dodwell says Hong Kong consumers lack adequate protection of their rights and the prevailing ‘caveat emptor’ attitude fuels a disposable culture in which faulty but cheap goods are simply tossed away

PUBLISHED : Friday, 06 April, 2018, 12:29pm
UPDATED : Friday, 06 April, 2018, 10:35pm

You can have a passing sympathy with Hong Kong legislators who are campaigning for the Consumer Council to be given new powers to strengthen consumer protection. After all, there seems to be a consensus that Hong Kong lags far behind places like the UK, the US, Singapore or even mainland China in protecting shoppers.

Much is made of the fact that the Consumer Council, despite an annual budget of HK$100 million from the government, and over 150 staff, has no powers to prosecute cheats, or companies that mislead or misinform. It can only provide information on problem product areasname and shame, mediate on complaints and, in the most egregious of cases, refer disputes to our Customs and Excise Department for potential prosecution. Out of 24,881 complaints received last year, just 420 found their way to Customs and Excise, and less than half of these eventually ended up in court.

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By comparison, the UK’s “Which?” – formerly the Consumers Association – has a £101 million (US$141.57 million) budget, and works closely with numerous other consumer protection agencies, such as the Office of Fair Trading, Consumer Ombudsmen, and Citizens Advice Bureaux, to inform and protect shoppers on the high street minefield and, increasingly, at home trawling online shopping websites.

The working assumption here in Hong Kong is that we are surrounded by rogues and potential charlatans, who will rip us off at the slightest opportunity

Which? undertakes 25 major investigations a year, and has reviewed over 2,200 products or ranges of products to help steer shoppers away from “lemons”. It flags “Best Buys” and “Don’t Buys”, and has a list of almost 9,000 “Trusted Traders”, with a “legal live-chat” service. 

And all this without relying on government or companies for any funds. Everything it does is either supported by donations or by sale of its products and services.

The “Which?” website is a wonder, compared with the Consumer Council’s modest “Choice” webpages, which are sadly useless to me as someone who struggles to read even simplified Chinese.

But hang on a minute. Why am I getting so bleeding-heart for our hapless shoppers? From my very earliest days in Hong Kong, I have seen a distinct culture at work here, underpinned by a single guiding principle – caveat emptor (or for those who never wrestled through Latin lessons at school, “buyer beware”).

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The working assumption here in Hong Kong is that we are surrounded by rogues and potential charlatans, who will rip us off at the slightest opportunity. Remember the marvellous scandal three years ago when a shopper sorting through 1,000-year-eggs in a street market slipped, cracked open an egg, and watched the yolk tumble to the ground – and bounce? Without that accident, we might never have discovered that mainland manufacturers were finding it cheaper to make eggs synthetically on a production line than to leave it to chickens to pop them out.

Remember the scandal of oilfish being passed off as cod in supermarkets in Hong Kong? Since oilfish are trawled in large volumes off South Africa for their oil, which is a powerful diuretic, I to this day puzzle that the charlatan who tried to pass them off did not anticipate the large number of buyers who were suddenly crippled with diarrhoea.

It is our duty to remain constantly vigilant and sceptical, and take no salesperson or marketer at their word. If something looks too good to be true, then guess what – it is probably not true. Why else would old Chinese ladies spend so much time carefully examining the feathers on live chickens in our wet markets? Or sorting fastidiously through mountains of oranges in ParknShop?

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True to that spirit, I remember a close neighbour and friend some years ago showing off to me his new mainland-made “no brand” smartphone. I asked him whether he was worried in case it stopped working after a couple of months. He looked at me incredulously: “I paid less than HK$1,000. Not like you, paying HK$6,000 or more. If it stops working, I’ll just throw it out and buy another one.”

This attitude also probably explains a massive difference between shopping on Taobao and shopping on Amazon: Amazon agrees to accept returns and refund dissatisfied shoppers, while this can be trickier on Taobao. Hong Kong’s online shoppers seem OK with the deal: I am buying super-cheap, so if the product turns out to be faulty, I will just throw it away, and pray for better luck next time.

I personally have my qualms about this. I hate the throwaway shopping culture that underpins our hyper-consumption society, and wish we could robustly enforce “circular economy” rules that oblige manufacturers to take back what they sell to us once the items have come to the end of their useful life (I love Norway’s new rules requiring bottled-drink sellers to take back their plastic bottles after use).

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But there is only so far our caveat emptor culture can protect us. The simple and obvious rule of “information asymmetry”, by which vendors are almost always well placed to exploit our ignorance, provides ample justification for robust consumer protection rules, and generous support for agencies like Which?, or Hong Kong’s Consumer Council. Naming and shaming transgressors that get caught may not be as satisfying as punishing them financially in court, but it serves to keep the charlatans around us less dishonest than they might otherwise be.

Our legislators, looking back at the 2016 scandal over the crash of California Fitness, in which most of their 64,000 members lost substantial advance-payment fees, are pressing for compulsory return and refund or replacement for faulty or misdescribed goods (what in the US and Singapore is called a “Lemon Law”) and introduction of a six-day “cooling off” period following a sale, when a buyer is allowed to change his or her mind, no questions asked.

Both of these seem reasonable, as long as we don’t forget that charlatans and information asymmetries will never go away – and that the online shopping world is a minefield like no other. For me, whatever the legal protections, there is just one principle that I need always to remember: caveat emptor.

David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view