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The Office of the Telecommunications Authority (OFTA) today (February 2) issued a new Code of Practice to provide the telecommunications industry with guidelines on the drawing up of service contracts.
"Hong Kong has one of the most competitive telecommunications markets in the world, and telecommunications services are also highly pervasive in our society. As a result, the number of consumer complaints has been substantial. A large proportion of these complaints are disputes about contractual matters," a spokesperson for OFTA said.
The new Code of Practice will be implemented on a voluntary basis and takes effect immediately, replacing two similar codes which the Telecommunications Authority (TA) issued in 2004. The TA issued a voluntary Code of Practice for the Service Contracts for the Provision of Public Mobile Radiotelephone Services in 2001 and the code was subsequently revised in 2004. The TA also issued the Code of Practice for the Service Contracts for the Provision of Public Telecommunications Service in 2004. These two codes provided that, among other things, language should be plain and words legible and salient points of a contract (such as the compensation clauses and terms for any early termination) should be presented in a prominent place or highlighted in the contract.
The spokesperson elaborated: "Based on the experience that it has gained with the two replaced codes and to provide further guidance on what constitutes fair, balanced and reasonable service contracts for both the consumers and the industry, OFTA has developed the new code in consultation with the industry and the Consumer Council. Compared with the two previous codes, the new code has been strengthened in the following aspects:
- subject to certain exceptions, the customer may cancel the contract without penalty within a seven-day cooling-off period;
- the customer may terminate the contract if there is variation of contract terms resulting in material change of service quality or price;
- arrangement for termination of contract must be easy and convenient;
- renewal of contract must not be automatic without specific prior consent of customers;
- a printed copy of the contract shall be provided within a reasonable time after conclusion of oral agreement;
- arrangement for moving premises shall not incur more than incidental costs; and
- arrangement for return of customer equipment must be reasonable.
"The code is voluntary in nature. Service providers are urged to pledge their compliance to it on their website. Those who have pledged compliance are required to report on their compliance status bi-annually or annually as they decide. Should their report on their compliance be found to be inaccurate or misleading, the TA may consider investigating the case to enforce S.7M of the Telecommunications Ordinance (Cap 106). We will closely monitor the effectiveness of the code. If the number of complaints about contractual disputes remains high, we will seriously consider whether other more stringent measures should be adopted," said the spokesperson.
"In addition to the code, OFTA has also been running a pilot alternative dispute resolution scheme since September 2008. Under this pilot scheme, selected cases of contractual disputes which cannot be resolved between the service providers and the customers are referred to independent professionals for adjudication on a voluntary basis. The aim of running the pilot scheme is to assess whether it may provide faster and more efficient out-of-court resolution of contractual disputes. We will review the pilot scheme shortly to see whether we should implement such a scheme on a long term basis," the spokesperson added.
The full text of the code can be downloaded from OFTA's website (www.ofta.gov.hk/en/code/cop20100202.pdf).
Ends/Tuesday, February 2, 2010
Issued at HKT 19:09
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