Handling of Infringements of the Rights and Interests of Consumers Several Provisions

State Administration for Industry and Commerce

March 12 2004

Appendix:

Handling of Infringements of the Rights and Interests of Consumers Several Provisions

Article 1: Business operators providing goods or services shall perform obligations pursuant to laws and regulations, or agreements or undertakings with consumers.

Where a business operator has made an agreement or undertaking with consumers and the contents of such agreement or undertaking is beneficial to upholding the lawful rights and interests of consumers and more stringent than the mandatory clauses of laws and regulations, the business operator shall perform its obligations pursuant to such agreement or undertaking; where the contents of such agreement or undertaking is not beneficial to upholding the lawful rights and interests of consumers and fails to comply with the mandatory clauses of laws and regulations, the business operator shall perform its obligations pursuant to laws and regulations.

Article 2: A business operator that discovers goods or services that it provided have a serious defect that may cause harm to the safety of persons or property even if such goods or services are used or received correctly, shall immediately stop sales of unsold goods or stop providing services and report such matter to the relevant administrative departments such as the administration for industry and commerce. For goods that have already been sold or services that have already been provided, in addition to reporting to the relevant administrative departments such as the administration for industry and commerce, business operators shall also notify consumers in a timely manner by effective means such as via the public media and in-store notices and by telephone, facsimile or mobile phone short message, and shall also recall such goods or take appropriate remedial measures in respect of services already provided.

Where a business operator fails to perform the obligations set forth in the preceding paragraph, the administration department for industry and commerce shall, within the scope of their functions and powers, order such business operator to make amends and record such failure in the credit monitoring information of market entities.

Article 3: Standard contracts, notices, statements and in-store notices drafted by a business operator must not include the following contents that are unfair or unreasonable to consumers: contents that make consumers undertake obligations that should be undertaken by the business operator; increase consumers' obligations; remove or restrict a consumer's right to alter or terminate a contract in accordance with the law; or remove or restrict a consumer's statutory rights such as the right to request payment of liquidated damages or damages or to file a lawsuit in accordance with the law.

If a standard contract, notice, statement or in-store notice drafted by a business operator contains the above contents, or there are acts that mitigate or exempt such business operator from the civil liability that should be borne by it for its infringement of the lawful rights and interests of consumers, the administration department for industry and commerce shall order such business operator to make amends and shall record the same in the credit monitoring information of market entities.

Article 4: If, after receiving goods or services provided by a business operator, a consumer requests proof of purchase or service documents such as an invoice, receipt, purchase card, service card and warranty card, a business operator must issue such proof of purchase or service document without any additional charges.

If a consumer requests an invoice, the business operator must not substitute it with a receipt, purchase card, service card, warranty card, etc. If an invoice cannot be issued immediately for a legitimate reason, the business operator must deliver such invoice at the time and place negotiated with the consumer or agree that the consumer collects such invoice from a designated place. If a business operator agrees that the consumer collects such invoice from a designated place, it shall pay reasonable transportation expenses to the consumer.

If the business operator fails to perform the obligations set forth in the preceding paragraph, the administration department for industry and commerce shall order such business operator to make amends and record such failure in the credit monitoring information of market entities.

Article 5: Where a business operator provides goods or services by means such as by mail, direct television sales, online sales or telephone sales, it shall provide such goods or services as agreed. If a business operator fails to provide goods or services as agreed, it shall, at the request of the consumer, perform the agreement or refund the payment. It shall also bear reasonable expenses such as the necessary communications expenses that the consumer incurs thereby and mailing expenses for the return of goods that do not comply with the agreed conditions.

Article 6: If a business operator provides goods or services and causes harm to a consumer's body or property, it shall assume civil liability by means such as to repair, redo, exchange, return goods or make up the quantity of goods, refund the payment for goods or services or compensate for losses pursuant to laws and regulations, or the agreement or undertaking with the consumer.

If a consumer has evidence to prove that it has been more than 15 days from the date on which a consumer presented a lawful request for a business operator to assume civil liability and the business operator has refused to do so without a legitimate reason on two or more occasions, it shall be deemed to be an intentional delay or unreasonable refusal, unless the business operator is able to prove that it has exceeded the time limit due to force majeure.

If a business operator intentionally delays or unreasonably refuses a consumer's lawful request, the administration department for industry and commerce shall impose a penalty pursuant to Article 50 of the Protection of the Rights and Interests of Consumers Law.