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Beware dubious online sales practices

By Alex Liu

Hong Kong, 31 March 2022: Online shopping has surged during the Covid-19 pandemic as cautious citizens avoid crowded streets and malls, but dubious sales practices – and, in some cases, fraudulent schemes – are also on the rise. The Consumer Council is handling an increasing number of complaints due to unscrupulous vendors cashing in on the public health emergency.

Countless online platforms and social media sales pages have sprung up to meet the demand for home shopping. A number of them exploit consumers’ feelings of FOMO (fear of missing out) with labels such as “best deal ever” or “clearance sale”. Increasingly, platforms are creating viral buying trends through livestreaming, enticing buyers to place orders before they fully understand the product details.

The Consumer Council recently released details of three cases it was asked to investigate, highlighting the pitfalls of online shopping.

Case 1

A woman purchased two pendants for HK$8,700 during a livestream sales session which the host claimed was being shot using actual products without camera filter. When she found the delivered goods to be substandard, the woman contacted the online platform where staff admitted a beauty filter had been used. She then complained to the jewellery trader, who insisted the goods were discounted items with no return or exchange. Contacted by the Consumer Council, the trader stressed the purchase was made via the shopping platform – that is, there was no direct transaction between trader and complainant – and it was clearly stated during the livestream there was no return or exchange. Finally, the trader agreed to refund the HK$8,700 as a goodwill gesture.

Case 2

A man visited a webpage which claimed to be selling clearance stock of German-made cameras for just HK$498 each. He clicked to buy and selected the pay-on-delivery option. When the package arrived, the courier refused to open it for inspection but simply took payment and left. The complainant found the camera had no trademark, packaging box, user manual or warranty card. He went to the delivery company to try, unsuccessfully, to stop the payment. Neither could he trace the seller. Contacted by the Consumer Council, the delivery company insisted it was not involved in transactional disputes between customer and sender. The complainant was unable to pursue the matter further.

Case 3

A woman saw a social media post selling Korean smokeless grills, originally HK$988 each but now at a “rock bottom price” of HK$499 with a quota of 50 units. She contacted the page owner who said there were just five grills left and she could have one with a further HK$100 discount. The complainant made electronic payment and was told it would be delivered next day. Thereafter, she heard nothing further and the page disappeared from the web two days later. The Consumer Council discovered the payment had been made to a personal bank account without specific business information of the seller. It concluded the case was difficult to pursue.

Safe practices

Citizens are reminded to be vigilant when shopping online: only use reputable and well-established platforms, understand the terms of sale, be aware of refund and return arrangements, and refrain from impulse buying.

They should also ascertain whether the payee is an individual or a company account. In the absence of specific business information, buyers should avoid making payments to personal bank accounts or paying the delivery company. Consumers should also try to verify online sellers through different channels and should be cautious about websites and pages which provide limited contact information.

Summary

While the pandemic has resulted in more business opportunities for the online shopping industry and allowed entrepreneurs to flourish, the onus is on digital stores and sales platforms to establish solid reputations through honest practices, thus assisting business development while protecting consumer rights. This approach, coupled with heightened vigilance from shoppers, creates a win-win situation that benefits everyone.

A Partner in BC&C since 2000, Alex Liu’s key areas of practice include commercial and corporate litigation, investigations by governmental bodies such as the SFC, ICAC and Commercial Crime Bureau, insolvency and debt restructuring, intellectual property, defamation, property and commercial contract drafting. He can be contacted at alex@boasecohencollins.com.

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