On Sept. 5, 2014, the State Administration for Industry and Commerce (the SAIC) released for public comments the proposed draft Measures for Penalizing Activities of Infringing Consumer Rights and Interests (Draft for Comment) (the Draft). The public comment period ended Oct. 4, 2014.
The Draft provides practical measures to protect consumers with the following points and definitions:
Return and Replacement of Purchased Goods
If a consumer purchases goods that do not meet quality requirements from a business operator, the consumer may return the goods or require the business operator to replace or repair the goods in accordance with the relevant regulations and rules of the country, or the agreement between the consumer and the business operator.
In the absence of such regulations and rules or agreement, the consumer may return the goods within seven days after receipt of the goods. If the conditions required for statutory rescission of a contract are still met seven days after receipt of the goods, the consumer may still return the goods in a timely manner, and if the said conditions are not met, the consumer may require the business operator to replace or repair the goods.
Obligations of Business Operators
Business operators are obliged to:
- ensure that the goods or services provided are in compliance with quality requirements;
- ensure that true, comprehensive and accurate information concerning the goods and services are provided to consumers;
- satisfy the legitimate demands of consumers regarding repairing, remanufacturing, replacement, return of goods, make-up for quantity shortage, refund of payment for foods and services, or compensation for losses promptly in accordance with the laws or agreement between the parties concerned;
- accept the return of goods by consumers without cause if such goods are sold via the Internet, television or phone, by mail order or otherwise in accordance with laws; and
- issue evidence of purchase vouchers to consumers.
Definition of Fraud
According to the Law of the People's Republic of China on the Protection of Consumer Rights and Interests (the Consumer Protection Law), if business operators commit fraud, consumers are entitled to claim compensation for losses, the amount of which would be three times the price that the consumers have paid for the commodities purchased or services received. Pursuant to the Draft, a business operator should be deemed to have committed fraud if it conducts the following activities:
- selling unqualified goods or services which could endanger personal security and property safety;
- selling fake products as genuine ones; shoddy products as quality ones, and substandard products as qualified ones;
- selling products not allowed for production and sale according to relevant laws or decrees of the country;
- selling expired or spoiled goods;
- providing consumers with untrue, incomplete or inaccurate information concerning its goods or services, or misleading consumers by any other false or misleading marketing means;
- defrauding payments for goods or services from consumers without providing the goods or services at all or as pre-agreed;
- failure to provide goods or services using true names or marks;
- selling goods that infringe the trademark rights of others;
- selling goods that forge or make fraudulent in using others’ names, packaging or trade dress;
- with respect to business operators engaging in decoration or construction services, deliberately damaging the parts and components or materials, using parts and components or materials that fail to comply with national quality standards or the relevant agreements, replacing parts and components that do not need to be replaced, engaging in shoddy work, charging additional fees or otherwise, which cause the loss of consumers; and
- with respect to business operators engaging in intermediary services for real estate and others, providing false information, or otherwise committing fraud or malicious collusion, which infringe on consumer rights and interests.
The Draft proposes to further enforce the Consumer Protection Law and protect consumer rights.
- Measures for Penalizing Activities of Infringing Consumer Rights and Interests (Draft for Comment)
- Issuing authority: State Administration for Industry and Commerce
- Date of issuance: Sept. 5, 2014 / Public Comment Deadline: Oct. 4, 2014