New Consumer Law to Wipe Out Hidden Fees

Experts called for an overhaul of business practices that violate the newly revised consumer law, specifically a new clause in the recently passed regulation that prevents consumers from being charged hidden fees.

In the first revision to the Law on the Protection of Consumer Rights and Interests since it was enacted in 1994, a new clause states that business owners should not violate the rights of consumers with hidden fees or special exceptions. Business owners must also warn customers of their exceptions before a transaction takes place.

For instance, most airlines compensate passengers only 100 yuan (US$16) for each kilogram of luggage that was lost.

Liu Junhai, a professor of economic law at Renmin University of China, said: "If I ship a laptop computer that weighs a kilogram, then the charge would be 100 yuan. The original regulation was passed during the nation's economic reforms three decades ago to protect State-owned enterprises. Now, times are different."

Liu called on the Standing Committee of the National People's Congress, which passed the updated rules on Friday, to further wipe out industry practices that infringe on consumers' rights to further enforce the new law. The revised law will take effect on March 15.

"Without (overall) upgrades in regulations, the system, the businesses and the revenue models of companies will not change," Liu said at a symposium on the revised consumer rights law on Tuesday.

He added that many industry practices were created during the country's economic reforms without any consideration for consumers' interests.

Liu reckoned that the new clause is expected to further reduce unfair charges on consumers imposed by business owners during transactions, such as imposing a minimum spending amount or corkage fees by restaurants.

"(The added clause) will help wipe out hidden fees that are unfair to consumers and further boost consumer confidence," Liu said.

Chen Jian, director of the legal and theoretical research department with the China Consumers' Association, shared Liu's viewpoint. "We will not turn a blind eye to previous regulations," she said.

Imposing hidden fees has been the top complaint from consumers in China, with many foreign enterprises being targets of criticism.

In April, Apple Inc was forced to revamp its repair and warranty terms in China after the consumer's association and the media criticized the company for not abiding by the nation's product warranty rules.

Starbucks Corp has also been under fire recently from China Central Television for allegedly charging higher prices in China than in other markets.

Nie Ying, chief legal consultant with Air China, said the company will revise its service terms before the revised consumer law takes effect.

Nie admitted the company should do a better job of explaining flight delays and its common practice of overbooking flights.

There is also another clause in the new law allowing consumers to return products for a refund within seven days after they receive the product if it has flaws and is not within the list of items covered by national warranty regulations.