Hong Kong’s Consumer Council seeks deals with Thailand, Malaysia to improve complaints handling for online shoppers

Customers who have been ripped off online could benefit from improved complaints handling following a move by Hong Kong’s Consumer Council to expand cross-border cooperation.

The head of the watchdog is hoping to strike a deal with the Thai or Malaysian authorities in a bid to improve dispute resolution between customers and companies relating to overseas internet purchases.

The plan would bring the number of jurisdictions collaborating with the city on customer disputes to at least five.

Travel purchases account for a significant proportion of online shopping complaints by Hong Kong residents. Shoppers often not do not realise they are using foreign websites and then struggle to have their grievances dealt with under different systems, according to consumer champions.

Chief Executive Gilly Wong Fung-han said Thailand and Malaysia were both popular destinations for Hongkongers, with large numbers emigrating to the latter, increasing the likelihood of local shoppers locking horns with online sellers in those countries.

In an interview with the Post to mark the watchdog’s 45th anniversary, Wong said the council had been developing cross-border collaborations in recent years and were looking for more.

“It’s to leverage on each other’s complaint redress schemes to handle problems,” she said on why cooperation is needed.

She added the limitations of complaints systems were down to cross-jurisdictions issues, adding: “The most effective way now is to tackle it through the exchange mechanism of consumer protection organisations.”

Wong said the council, an independent statutory authority established in 1974 to improve protections for customers, visited Malaysia this year and planned to visit Thailand next year to explore collaboration, but added it would “take two to tango”.

The watchdog has previously signed consumer dispute deals with Korea, Japan and Singapore. Dozens of cases have been handled in collaboration with authorities there over the last few years, with most of them resolved.

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In Korea, 26 complaints were filed under the mechanism over the last two years and 22 were settled. This year, there were 17 cases reported so far on issues such as travel, beauty services and clothing.

“There were not many cases. But when consumers knew the existence of these channels and they felt they were treated unfairly, we really could help them find a resolution,” Wong said.

In November, the watchdog reached an agreement with the mainland China consumer watchdog China Consumers’ Association, which mainly covers online shopping complaints.

The scheme would allow online traders, including e-commerce giants Taobao and JD.com, to directly handle complaints to speed up the resolution process.

Taobao is run by Alibaba Group, who also owns the South China Morning Post. 

China is one of the dominant online shopping markets in the world.

Last year, online retail sales grew nearly 24 per cent to 9 trillion yuan from 2017, according to the National Bureau of Statistics of China.

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The United Nations Conference on Trade and Development (UNCTAD) said China’s e-commerce sales in 2017 almost hit US$2 trillion, making it the world’s third-largest market in the sector.

The United States was the top market, with nearly US$9 trillion of online sales, followed by Japan, China, Germany and Korea.

On the back of the growing trend, Hong Kong’s council received almost 5,000 complaints on online shopping last year, up 26 per cent from 2017.

For the first 10 months of this year, over 3,700 cases were reported, which is down 11 per cent on the same period last year. About 1,000 cases were about travel matters.

Consumer watchdog calls for a simpler ‘goods return’ process

Helena Leurent, the director general of Consumers International (CI), which represents more than 200 consumer advocacy groups in over 100 countries, said around 50 per cent of online shoppers would buy products or services in other countries and jurisdictions.

“But they might not actually know they are shopping from another place outside their own country. This makes it difficult because consumers don’t know what their rights are,” Leurent said.

She said it was also challenging for small and medium-sized enterprises because they did not know what kind of protection they should provide for overseas shoppers.

While the World Trade Organisation was negotiating a new e-commerce trade deal with over 70 countries across the globe, Leurent said some successful online dispute resolution systems were already in place, but they could have limitations.

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Citing the European Union as an example, not all cases were covered by its provisions, partly because all buyers and sellers must live or be based in the EU, she said.

“This is really patchy,” she said referring to the global situation.

She said there are not enough collaborations in place, adding: “It can be quite complicated to set up but it is really important.”

Leurent said some members were working on how to develop schemes that would be more comprehensive and effective.