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Annual Review of New Consumer Law Implementation by Consumer Associations
—— 2016-03-14 ——

Just two more days, it will be the 1st anniversary of the implementation of the newly updated Law on Protection of Consumers Rights and Interests. Over the past year, CCA and consumer associations nationwide have done a tremendous amount of work in accordance with the statutory public interest obligations specified by the new law. They timely conveyed the public voice, took enhanced efforts to provide consumer education and guidance, efficiently solved consumption-related disputes, and vigorously pushed forward shared governance. Below is a brief introduction of the general progress as below.

1. Enhance publicity of the new law, increase social awareness

Carry out a variety of publicity and education activities on the theme of “New Law, New Rights, New Obligations”, including: (a)Call on consumer associations nationwide to launch the “3•15 World Consumer Rights Day” campaign, promote the understanding of the new law by providing on-site advisory services; (b) Provide detailed interpretation about such provisions as “returning an item for no reason” “liability for guarantee of product quality” “liability for celebrity endorsement” and “protection of personal information” under the new law by accepting media interviews and being a talk show guest at authority websites like People.cn, Xinhua.net and Chinanews.com; (c)Co-edit with China News Service the “Special Issue for NPC & CPPCC on Consumer Rights Protection” to report to the attendees of the two conferences about the achievements in protection of consumer rights and provide advice on relevant issues; (d)Communicate widely about the “new rights” and “new obligations” by means of posters, cartoons, animations, brochures, websites, Weibo, Wechat and knowledge contests to increase social awareness of the new law and prompt business operators to conduct business in good faith, in a lawful manner and with self-discipline.

2. Strengthen staff training and improve consumer associations’ capabilities of rights protection

(a) Take full advantage of the opportunities brought by the implementation of the new law, organize to provide training for staff of consumer associations nationwide, and invite experts and scholars to provide interpretation on how to perform the new rights, obligations and responsibilities under the new law to further improve the capabilities of staff of consumer associations for protecting the rights and interests of consumers according to law; (b) Organize to hold seminars on protection of consumer rights learning how to distinguish real from false, food safety weeks, scientific catering (and safe consumption) workshops and new law trainings provided for compliant-handling and mediation entities, instruct the consumer associations at all levels to implement the new law, and reinforce the protection of consumer rights in key areas like banking, household electric appliances and home remodeling.

3. Solve consumption-related disputes effectively based on the new law

From March 15th, 2014 when the new law officially came into force till March 1st, 2015, the consumer associations nationwide accepted 580,214 complaint cases, of which 497,638 cases were closed, representing 85.77% of total complaints, and redeemed economic loss of RMB 720 million for consumers. Among the closed cases, 7,628 complaints were related to fraud conducts of business operators, who were fined with a total of RMB 15.82 million. The consumer associations focused on improving the efficiency of complaint handling, solving key issues that consumers are most concerned about and properly handling typical cases or mass cases with great social influence. Within the year, the consumer associations supported 1,412 consumer lawsuits and accepted 720,000 consumer visits and queries.

4. Reinforce consumer education and guidance, advocate consumption in a scientific and rational way

(a) Integrate the resources of consumer associations, guide and work with consumer associations nationwide to complete over 110 comparative tests concerning 2,200 products of various kinds, including anti-smog face mask, air purifier, sun-proof wear, silk blanket, children’s toy and home remodeling materials so as to suggest on consumers to spend in a scientific and rational way; (b) Work with Beijing Consumers Association to carry out the “Consumer Visit Day on Food Safety” in line with the “Food Safety Week” launched by the central government, build channels to provide consumers with more knowledge of food production and processing, and guide consumers to understand and evaluate the status of food safety objectively; (c) Disseminate unbiased consumption-related information through network platform. Activate and refine columns including “Consumer Encyclopedia” “Comparative Testing” “Consumer Alert” etc. along with the upgrading of CCA official website, and prepare for the launch of “online classes for consumer education” to provide scientific and general knowledge about consumption behaviors.

5. Conduct supervision on commodities and services, prompt enterprises to conduct business in good faith and in a lawful manner

(a) Conduct surveys on how online shopping enterprises have observed the consumers’ “right to regret” and what progress has been made after 100 days of implementation of the new law based on the new provisions concerning online shopping. Based on the survey results, the consumer associations, jointly with the Consumer Protection Bureau of SAIC, engage in regulatory talks with key e-commerce companies in the country, giving opinions on areas that need rectification and ensuring that the requests are implemented; (b) Guide consumer associations nationwide to enforce public oversight of five key areas, i.e. electric and electronic appliances, clothes, footwear and headwear, decorative and remodeling materials, transportation tools and relevant services in accordance with the general deployment of SAIC; (c)Work with some provinces and municipalities to carry out consumer assessment activities concerning seven key service areas, engage in regulatory talks with 15 major banks in terms of financial services to promote industrial self-discipline. Work with consumer associations in 10 provinces and municipalities to carry out survey on aftersales service concerning household electric appliances, publish the results to the general public and share feedbacks with relevant enterprises. Such activities have produced good social effects.

6. Participate in development of laws and regulations, conduct research on public interest lawsuits, and push forward judicial practices

(a) Make active efforts to participate in development of laws and regulations and drive legislation in relevant sectors. In 2014, the consumer associations provided 339 pieces of advice for revision of 14 laws and regulations, including the Food Safety Law, Advertisements Law, Regulations on Flight On-Time Performance (Draft), Rules for Administration of Express Delivery (Draft) and Measures for Penalties against Infringement upon Consumers’ Rights and Interests (Draft), participated in the development of 29 national and industrial standards and provided 125 pieces of advice for revision; (b) Organize several seminars to study the obligations of consumer associations to initiate public interest litigations as bestowed by the new law and draft the Guiding Opinions on Initiating Public Interest Litigation for Protection of Consumer Rights to provide theoretical support for driving the smooth progress of public interest litigation and provide guidance to consumer associations at provincial level when they take actions; (c) Undertake the research on exploring e-commerce legislation assigned by the NPC to push forward the progress of legislation.

However, the consumer associations also identified some difficult issues during the implementation of the new law.

1. Detailed rules for protection of personal information are not in place, making it difficult to execute

According to Article 29 of the new law, “business operators shall collect and use the personal information of consumers based on the principle of legitimacy, rightfulness and necessity, shall announce the purpose, means and scope of collection and usage and shall obtain the consent of consumers. When collecting and using the personal information of consumers, business operators shall publish the rules for collection and usage, and shall not collect and use the information in violation of relevant laws and regulations and the mutual covenants between the two parties.” Nevertheless, in reality there are few detailed and effective rules or measures for operation and protection.

In 2014, CCA conducted the study on “protection of personal information of consumers”. It is shown that although the new law has specific stipulations, consumers are still facing many difficulties when trying to protect their personal information, reflected by being difficult to prevent infringement, provide proof and claim for compensation. Joint efforts shall be made to speed up the building of a strong safety cover by developing policies, enhancing legislation, promoting corporate responsibilities and improving the awareness of self-defense and protection.

2. Increasing difficulty in mediating the claims for three-fold compensation

The punitive damages compensation for fraudulent sales was substantially revised under the new law, increasing the amount of compensation to three times the amount of the price of the goods purchased by the consumer or the fee of service received by the consumer from the original one-fold, meanwhile, setting the lower limit of compensation at RMB 500. The punitive provisions are positive for protecting the consumers’ rights and interests and send a more powerful warning message to business operators. However, consumer associations find increasing difficulty in mediating such cases in actual practices.

3. Implementation of the new law and performance of new obligations by online retailers produces little result

Some major problems relating to the stipulation on implementing “7-Day Return of Goods Without Reasons” by online operator:

(a) Fail to distinctively label the type of goods that non-return is applicable, and rarely confirm one-to-one with consumers about the exceptions during shopping;

(b) Adopt very strict return policies, resulting in increase of consumer complaints on return or exchange of goods;

(c) Provide a more liberal interpretation of the “7-Day Return of Goods Without Reasons” policy at their discretion, adding that return of goods is unacceptable unless for quality problems. As a result, consumers’ entitlement to the policy is largely compromised.

4. Protection of the rights of consumers who receive financial services, such as the right to know, relates to several laws, adding the difficulty for protection due to the complexity.

The new law clearly stipulates the obligations of business operators which provide securities, insurance or banking services and adds the obligation to disclose the information of business operators. However, due to the high level of specialty of the financial sector, consumers are placed in an obviously inferior position in actual practices when receiving financial services due to limited information and professional knowledge. Major issues include that there is no guarantee of consumers’ entitlement to the right to know, there exists great concern about the consumers’ personal safety, the provisions of standard form contracts are obscure and barely understandable, business operators mislead consumers by false propaganda, and fee collection lacks transparency etc.

At the beginning of the year, CCA held the Conference for the Election of the 5th Council together with the 1st Session of the 5th Council Meeting. Zhang Ping, Vice Chairman of the Standing Committee of the 12th National People’s Congress, was elected the President of CCA. Zhang Mao, Director General of SAIC, was elected the Executive Vice President. Senior executives from several ministries and commissions, including Ma Zhengqi, the Deputy Director-General of SAIC, were elected Vice President of CCA. Prior to the conference, Premier Li Keqiang had given important instructions on the work of CCA, and State Councilor Wang Yong also put forward detailed requests on protection of consumers’ rights. The Party and state leadership have attached such high importance to the protection of consumers’ rights, thus providing a strong guarantee for CCA to continue engage in the undertakings.

The Report on the Work of the Government submitted to the ongoing NPC and CPPCC further emphasizes the need for stimulating internal demand and enlarging consumption and protection of consumers’ rights and interests. It is the common responsibility of the whole society to protect the legitimate rights and interests of consumers, and this requires joint efforts of all parties. CCA has set “Shared Governance to Enjoy Consumption” as the annual theme of 2015. The consumer associations at all levels shall proactively work to gain support from all departments and the whole society in accordance with the new law and by adhering to the core tasks of the Party and the state, take actions to build a comprehensive platform for rights protection and promote shared governance, and make unremitting efforts to create a safe consumption environment.

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