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Following is a question by the Hon Lee Wing-tat and a written reply by the Secretary for Commerce, Industry and Technology, Mr Joseph W P Wong, in the Legislative Council today (June 13):
Question:
It is learnt that the number of complaints about telecommunications or subscription television services received by the Office of the Telecommunications Authority (OFTA) and the Consumer Council (CC) in recent years has increased substantially. In this connection, will the Government inform this Council:
(a) since the selling of telecommunications and subscription television services is often conducted by phone, whether the authorities will stipulate that a service contract will take effect only after a complete copy of the relevant contract has been provided by the service operator to the customer, so as to protect the interests of both parties;
(b) whether it will amend the Telecommunications Ordinance (Cap. 106) to empower OFTA to vet the service contracts prepared by telecommunications service operators and strike out any unreasonable terms and conditions contained therein (for example, the terms on automatic renewal of services upon the expiry of the contract period); if not, how the authorities protect consumers against losses arising from such unreasonable terms and conditions;
(c) of the details of the Consumer Dispute Adjudication Scheme being considered by CC and OFTA recently, and since the scheme is of a voluntary nature, how the authorities will handle complaints involving telecommunications and subscription television service operators who have not joined the scheme; and
(d) whether it has studied the stipulation that a cooling-off period shall be included in such service contracts to allow for unconditional termination of such contracts by consumers during the period; if not, of the reasons for that?
Reply:
Madam President,
At present, telecommunications services and pay television services in Hong Kong are regulated respectively by the Telecommunications Authority (TA) and the Broadcasting Authority (BA) in accordance with the Telecommunications Ordinance (Cap. 106) (TO) and the Broadcasting Ordinance (Cap. 562) (BO). Although section 7M of TO stipulates that telecommunications service providers shall not engage in conduct which is misleading or deceptive in promoting, marketing or advertising their services, contractual matters between the telecommunications service providers or the pay television programme service licensees and their clients fall outside the scope of TO or BO.
My reply to the question raised by the Hon Lee Wing-tat is as follows:
(a) Under the existing legislation and the terms and conditions of the telecommunications licence or the pay television programme service licence, neither of the TA nor the BA is empowered to require that a service contract should take effect only upon the provision of a full copy of the contract to the customer by the telecommunications service provider or the pay television programme service licensee.
However, in the voluntary Code of Practice for the Service Contracts for the Provision of Public Telecommunications Services issued by the TA to all telecommunications service providers in 2004, one of the guidelines is that a copy of the contract should be made available to the customer, upon request, within a reasonable period of time. As for pay television services, the Commissioner for Television and Entertainment Licensing, being the Principal Executive Officer of the BA, has written to all domestic pay television programme service licensees asking them to improve their sales and promotion activities. In response to the concern of the Television and Entertainment Licensing Authority, the domestic pay television programme service licensees have put in place their own administrative measures to address the issue, including reconfirming through follow-up telephone calls the service details offered to customers by salespersons.
(b) The Office of the Telecommunications Authority (OFTA) is considering the establishment of a dedicated professional arbitration mechanism for telecommunications services to resolve disputes over contracts, services or billings (see part (c) below). On the other hand, if consumers are of the view that there are unreasonable terms in the contracts, they may seek a determination from the Court under the Unconscionable Contracts Ordinance (Cap. 458) that the relevant terms are invalid. In view of the above, we consider it unnecessary at this stage to amend the TO to empower the TA to vet the contracts prepared by telecommunications service providers. OFTA will also continue to work closely with the Consumer Council to undertake consumer education through various channels such as television, radio, newspapers and websites, to remind consumers to pay close attention to and gain full understanding of the contract terms and their obligations before entering into any service contracts with telecommunications service providers, so as to prevent any loss that may incur.
(c) Currently, no organisation other than the Court has power to adjudicate on disputes relating to telecommunications service contracts. Therefore, OFTA is liaising with the industry for the introduction of a pilot "Consumer Dispute Adjudication Scheme" to resolve disputes over contracts, services or billings of telecommunications services. Telecommunications service providers may join the scheme on a voluntary basis, with an undertaking to accept the adjudication outcomes. As the scheme is still under deliberation, the details are yet to be finalised.
(d) Stipulation of a mandatory cooling-off period for contracts relating to telecommunications or pay television services might lead to delays in consumers' obtaining the required services. However, one of the nine Best Practice Indicators for the promotion of telecommunications services, drawn up by OFTA in March 2005, encourages the industry to introduce the "quality control confirmation calls" mechanism, whereby calls should be made by the telecommunications service providers to the consumers to confirm the major terms and conditions of the contract before commencing the provision of services. This measure can ensure that the consumer is fully aware of the major terms of the service when signing the applications, and reduce the risk that he was misled to sign the contract. The consumer will also be given an opportunity to withdraw or change his application. Although the Best Practice Indicators are implemented on a voluntary basis, the major fixed telecommunications network services operators in Hong Kong have already introduced the "quality control confirmation calls" mechanism. As mentioned in part (a) above, pay television programme service licensees have also adopted similar arrangements.
We will continue to closely monitor the market situation and will review relevant legislation and guidelines from time to time to protect consumers by enabling them to acquire the required telecommunications and pay television services in a fair and reasonable manner.
Ends/Wednesday, June 13, 2007
Issued at HKT 13:10
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