Contracts freely made between traders and consumers should be respected when the Government considers any regulation of consumer contracts involving prepayment.
Secretary for Commerce & Economic Development Gregory So told legislators today the regulation of all such contracts will have significant implications across trades and industries, and the Government must have sufficient and reasonable grounds before intervening in a contract entered into between two parties.
In July the closure of a chain of fitness centres caused consumer concern.
Taking reference to the practices of jurisdictions like the US and Australia, Mr So said the suggestion to impose ceilings on contract length or prepayment value in consumer contracts must be considered carefully as it amounts to a direct intervention into the traders’ business plans.
He noted a Consumer Council report in August recommended establishing a Consumer Dispute Resolution Centre to promote the settling of disputes outside the judicial system.
He said the Government has been promoting and encouraging dispute resolution through mediation and arbitration. A number of non-governmental organisations and the private sector are offering such services.
The Government will continue to explore with the council and the Department of Justice promoting consumer dispute resolution by non-judicial means.
He noted law enforcement agencies are mandated to investigate unfair trade practices, while the council exercises its functions according to Section 4 of the Consumer Council Ordinance, including receiving complaints from consumers.
The council can use the information collected to name unscrupulous traders who are not amenable to repeated advice and thereby alerting consumers. This has a significant deterrent effect on unscrupulous traders.
It also makes every effort in acting as a conciliator to resolve disputes between traders and complainants. The majority of complaints received by the council can be resolved through conciliation, Mr So added.
