On January 5, 2015, the State Administration of Industry and Commerce promulgated the Measures for Penalties against Infringement of Consumer Rights and Interests (hereinafter, the "Measures"), which will enter into effect on March 15, 2015.
First, the Measures reflect the spirit of progress with time. With respect to frauds commonly seen in online shopping, Article 6 Para. 4 provides that an operator who "engages in deceptive sales or solicitations by adopting fictitious transactions, falsifying trading volume, posting untrue comments or hiring others to engage in such acts" shall be deemed to be engaging in fraudulent acts. Meanwhile, Article 13 contains additional provisions regarding fraudulent acts in fields such as interior renovations, household services, property rental, etc.
In addition, an operator who has to assume obligations such as suspension of sales, repair and maintenance, reworking, replacement or sales return due to defects in the goods or services provided by the operator shall not refuse or delay the performance of such obligations. The Measures specifically enumerate several scenarios provided as follows where "deliberate delay" or "refusal without justified reasons" constitutes to enhance the definition and operability of rights protection: (1) failure to take measures set forth in a notice or announcement that requires suspension of sale or services from administrative agencies for industry or commerce which demand such measures to suspend the sale or provision of defective goods or services; (2) failure to accept sales return since the day when such return is demanded by the consumers with respect to unqualified goods determined by relevant administrative authorities pursuant to law; (3) refusal, without justified reasons, to perform obligations required by the state such as repair and maintenance, reworking, replacement, sales return, supplement of deficient quantities of goods, refund of goods payment or service charges or compensation for damages beginning with the expiration date agreed upon between the parties or with the date when the consumers lodge such requests if quality requirements are not met; (4) failure to handle sales return formalities beginning with the day the sales return is requested by consumers in case of goods subject to sales return without reason; (5) unilateral refusal of sales return on the ground that sales return without reasons does not apply to such goods without confirming with the consumers; or refusal of sales return on the ground that the consumers have opened the packages or that checking the goods will affect the integrity of the goods; and (6) failure, without valid reasons, to refund goods payment from consumers beginning with the day when the returned goods are received.
In addition, Article 16 of the Measures follows two principles for determining an act of fraud. One principle requires the determination of an operator's subjective willful faults. To wit, the principle of reversed burden of proof is adopted for acts under Article 5 Paragraphs (1) through (6), while the other principle does not require subjective and willful faults of an operator before fraud may be concluded, i.e., acts under Article 5 Paragraphs (7) through (10), Article 6 and Article 13.
Pursuant to relevant provisions of the Consumer Rights and Interests Protection Law, the Measures contain more detailed provisions regarding the definition of acts that infringe consumer rights and interests and the differentiation of subjective faults and provide more specific and operable guidance to the consumers and administrative authorities for industry and commerce.