[National Council of Consumers Organizations 2005 First Half Consumer Counseling Analysis]
Extensive damages from unauthorized uses of others’ names for mobile phone service subscriptions. Consumers advised to practice extreme caution.
The consumer counseling cases received by over 180 consumer organization counseling offices across the country from January to June 2005 decreased to 164,259 by 13.38% from the same period of the preceding year. Most of the counseling topics received in the first half of 2005 was about mobile handsets, which amounted to 7,514 cases. The next most frequent counseling topics were health food (7,258) and study texts (6,923).
○ Counseling about unauthorized use of identity for mobile handset subscription was the most; thorough identity authentication is required.
Among counseling on mobile handsets, most cases were about unauthorized use of identity, which amounted to 1,277, 16.99% of the total 7,514 counseling cases about mobile handsets. Many consumers received service bills or notices from the phone company or the Korea Guaranty Insurance Company for a mobile phone number which they do not use, or received bills indicating fees or charges for mobile Internet or other value-added services they did not subscribe for. The next most frequent counseling cases after unauthorized use of identity were related to the phone company service staff’s rudeness during repair of malfunctioning handsets (849 cases) and overcharging of value-added service fees (577 cases).
○ Health supplements are most often purchased through door-to-door salesmen, and the most often counseled item was ginseng.
2,867 counseling cases, 39.50% of total 7,258 cases concerning health supplements were about goods purchased from a door-to-door sales representative. Follow-up counseling cases about health supplements purchased through telemarketing amounted to 919 cases, 12.66% of the total. When categorized by the ingredient of health supplements, the most often covered in the counseling was ginseng, including red ginseng, representing 1,559 cases, 21.47% of the total counseling cases related to health supplements. The next often covered were 972 cases related to diet health supplements and 382 cases related to chitosan.
○ Study materials were most often purchased through door-to-door sales representatives; Counseling cases about qualification certificates which were under controversy recently still remain large.
Like health supplements, counseling related to study materials purchased from door-to-door sales representatives represented the highest of 2,483 cases, 35.86% of the total. The next highest were about 1,141 cases related to study materials purchased through telemarketing. When analyzed by product category, the study materials covered in counseling included 3,255 cases of student study materials, representing 47.01% - the highest out of all; the next highest materials were language study materials (914 cases) and qualification test preparation materials (813 cases). The detail of counseling and analysis are as follows:
[National Council of Consumers Organizations 2005 First Half Consumer Counseling Analysis]
The consumer counseling cases received by over 180 consumer organization counseling offices across the country from January to June 2005 decreased to 164,259,13.38% less from the preceding year’s same period. The highest single product item received for consumer counseling was 11,203 cases related to women’s clothing. However, it cannot be simply said that clothing related counseling was the biggest issue during the first half based on the number of counseling cases, as some consumer organizations (YWCA, Housewives Clubs, Consumer Union, and Consumer Life Research Institute) have conducted review of laundry service problems. The next most frequent topics for counseling were mobile handsets (7,514), health supplements (7,258) and study materials (6,923).
1) Top ranking item
The highest single product item received for consumer counseling in the first half of 2005 was 11,203 cases related women’s clothing. However, it cannot be simply said that clothing related counseling was the biggest issue during the first half based on the number of counseling cases, as some consumer organizations have conducted review of laundry service problems. The next most frequent topics for counseling were mobile handsets (7,514), health supplements (7,258) and study materials (6,923).
Counseling about identity theft for mobile handset subscription numbered the most; thorough identity authentication is required
Among counseling on mobile handsets, the most frequent cases were about unauthorized use of identity, which amounted to 1,277, 16.99% of the total 7,514 counseling cases about mobile handsets. To review the details, some consumers who once lost their identification card received service bills or notices from the phone company or Korea Guaranty Insurance Company for a mobile phone number which they do not use, or received bills indicating fees or charges for mobile Internet or other value-added services they did not subscribe for. Unauthorized use of identity is a problem attributable to the phone service companies, as they failed to properly check the subscriber’s identity. The counselor’s opinion is that the phone service companies intentionally neglected to properly check identity, in order to increase their customer base. Therefore, the service providers should consider the users’ convenience and protection of their credit related information as well as compete to increase the subscribers.
The next most frequent counseling cases after the unauthorized use of identity were related to the phone company service staff’s rudeness during repair of malfunctioning handsets (849 cases) and overcharging of value-added service fees (577 cases).
With regards to mobile handsets, Seoul YMCA Citizen`s Mediation Center (Director Jong-won Shin, 725-1400) has operated “Phone-ari,” a handset quality test group, which intensively monitored the software bugs found in the latest expensive multi-function handsets, since March of this year. Software bugs are almost inevitable as handsets require larger volumes of software to embed various additional functions like television reception and camera, all the while becoming smaller and smaller in physical size. In this connection, the vendors often attribute the entire cost for replacing main boards to the consumers during the warranty period in addition to insufficient after-sales service they provide to the consumers. This means they betrayed the consumers’ trust while sacrificing the product safety, though they stage feverish competition to gain new customers by hurriedly launching new products and through aggressive advertising and marketing. Seoul YMCA Citizens Voice Relay Room has indicated problems by having the products tested by consumers through “Phone-ari,” founded to improve the the above mentioned problems. It has already tested all handset products from all the major producers like Samsung, LG Electronics, VK Mobile, Pantech & Curitel, and KTFT, and also had consultative meetings with the vendors concerned.
The problems related to value-added service fees were already checked through the survey conducted by Daejeon Chapter (Chair Song Byeong-hui) of National Federation of Homemakers Classes in last March. (April issue of Monthly Consumer) They surveyed the consumer problems related to mobile Internet contents among the value-added services offered to young users. 81.9% of the respondents indicated that excessive billing was the problem. They replied that excessive fees are imposed because the access speed is slower than expected, or excessive fees are also imposed as they used certain usage-based service without having advance information or explanation that additional information service fees are imposed in addition to flat access fees. The youth respondents replied that additional billing details for contents service should be clearly indicated so that they may easily understand it, to resolve the problems related to excessive billing.
Health supplementary food is most often purchased through door-to-door salesmen, and the most often counseled item was ginseng.
2,867 counseling cases, 39.50% of total 7,258 cases concerning health supplements were about goods purchased from a door-to-door sales representative. This is a problem that is raised again and again every year. Many consumers apply for counseling with consumer organizations as they cannot cancel subscription for goods they purchased instantly, after accepting the explanation of a salesman who visited their home or met on the side of the road. Follow-up counseling cases about health supplements purchased through telemarketing amounted to 919 cases, 12.66%.
When categorized by the ingredients of the health supplements, the most often covered item in the counseling was ginseng, including red ginseng, representing 1,559 cases, 21.47% of the total counseling cases related to health supplements. The next often covered were 972 cases related to diet health supplements and 382 cases related to chitosan.
The correct name of health supplements is ‘health functional food.’ Korea National Council of Consumer Organizations (Chair, Lee Haeng-ja, 774-4050) and its member organizations study ‘Ways to Reinforce Consumer Education for Correct Selection of Health Functional Food’ in collaboration with Korea Food and Drug Agency. Council of Consumer Organizations conduct 38 layered education courses for 2,200 consumers, who are youth, housewives, or senior citizens from Seoul and seven other areas, on what to consider when purchasing health functional food. To that end, Council of Consumer Organizations and its member organizations have developed layered textbooks and trained professional instructors. The consumer education is provided online and offline. Online education is designed mainly for youth consumers, while offline education is provided mainly to housewives and senior citizens. Food and Drug Agency and the consumer organizations plan to prepare the framework for consumer education on health functional foods, by developing consumer education models by target groups.
Study materials related counseling, which is the most frequent case, is about study materials purchased from door-to-door sales representatives.
Counseling cases related to study materials for qualification exams, which were under controversy lately, still remain high
Like health supplements, counseling related to study materials purchased from door-to-door sales representatives represented the highest of 2,483 cases, 35.86% of the total. The next highest were about 1,141 cases related to study materials purchased through telemarketing.
When analyzed by product category, the study materials covered under counseling included 3,255 cases of student study materials, representing 47.01% - the highest, and the next highest were language study materials (914 cases) and qualification text preparation materials (813 cases).
Student study materials or language study textbooks continued to rank at the top among the items brought to consumer counseling . Consumer counseling cases increased particularly for topics related to various qualification certificates, lately. In this connection, consumer damages related to qualification certificates are repeatedly reported in the press, which are also visible in the statistics of consumer counseling. The majority of the vendors sell the textbooks by making false or exaggerated advertisements, such as that the consumer may secure government-authorized qualification certificates, employment, or examinations, but in reality, they are privately issued qualification certificates, which do not warrant employment at all. Furthermore, the textbooks are often useless as they haven’t been revised for a long time.
This is also indicated in an article covering an analysis of consumer complaints printed in July/August issue of Monthly Consumer, published by Korea Federation of Housewives Clubs (Chair Kim Cheon-ju, 779-1573). The Federation states that it is critical to conduct education on minimizing damages while the consumers should be encouraged to fully check the information concerning the qualification certificates with the Ministry of Education and Human Resources and Human Resources Development Service of Korea, and to demand for cancellation of their subscription to the vendor in writing within a given period, if they intend to cancel the purchases. In addition, the Federation suggested that to completely prevent such damages, the private organization issued qualification certificates should be marked so (Ex. Qualification Certificate issued by private organization XXX), and the qualification certificate issuing entity and the advertiser of the textbooks or similar materials should be clearly indicated separately. The Federation also disclosed that it recommends that the relevant government departments should establish basic control systems, including specific guidelines regarding illegal or improper advertisements such as those guaranteeing high income or employment without any grounds.
2) Increasing items
Counseling cases decreased by 13.38% in the first half of 2005
Counseling cases in the first half of 2005 decreased by 13.38% from the same period in 2004. Thus, it was anticipated the majority of items referred to counseling should have decreased from the same period of the preceding year, but counseling cases of five items (air-conditioners, indoor furnishings, beddings, meat, and maintenance supplies) increased.
Counseling cases about air-conditioners increased because of cases involving ‘Rich2you’ Shopping Mall
Air-conditioner counseling cases increased to 2,227 cases, a 58.95% increase from the same period of 2004. 52.53% (1,170 cases) were air-conditioner related counselings, 471 of which were counselings about damages inflicted on the consumers who used ‘Rich2you’ Shopping Mall, which caused a hot issue in the first half.
Internet shopping mall ‘Rich2you (www.rich2you.com)' closed down the site when the delivery date approached, after recruiting buyers by offering goods with lowest prices on the price comparison sites. Damage amounts increased as many consumers attempted to buy consumer electric appliances without suspicion, since the shopping mall gained consumer confidence by selling baby milk at lower prices since last February.
It is true that online shopping malls, who do not deal with consumers in person, have more danger factors than offline transactions. Therefore, consumer organizations continuously conduct survey projects related to online shopping malls. Consumer Union of Korea has continuously monitored them by operating ‘e-Commerce Center,’ entrusted by Seoul City Government. Federation of Housewives Clubs has conducted surveys of transactions and seller information displayed on online marts like Auction or G-Market.
Inquiries increased about cleaners because of the test results disclosed by consumer organizations
In the first half of 2005, consumer organizations conducted more tests than ever before and announced the results. Consumers Union of Korea (Chair Jeong Gwang-mo, 794-7081) conducted tests on cleaner performances, which provided a great topic when broadcast on television. Many consumers raised questions about cleaners, after viewing the television program. Cleaners are classified into maintenance equipment under the consumer counseling program. 629 counseling cases related to maintenance equipment were received in the first half of 2005, which is a 19.58% increase from the same period of the preceding year. Following the television program, the consumer organizations had consultation sessions with cleaner manufacturers. They provided opportunities for the consumer organizations to deliver its messages to the vendors that they should endeavor to enhance consumer safety by reminding them of the test results again.
In addition, the consumer organizations conducted tests on diverse products like baby wet tissue, pickled fish sold in the market, and baby clothes in the first half of 2005.
Home shopping vendors recalled certain products per requests by consumer organization, and consumer questions also increased
- Many counseling cases were received about pigment pad, memory form, and bone soup sold by home shopping vendors
The items about which counseling cases sharply increased in the first half of 2005 were indoor furnishings, beddings and meat, because a consumer organization (Consumers Korea, Chair Kim Jae-ok, 739-5441) demanded their recall.
Furnishings related counseling cases increased to 1,018 cases, a 66.06% increase from the same period of 2004. 53.14% or 541 furnishings related counseling cases were about stain transferred from pigment pads, which were sold by CJ Home Shopping. Bedding related counseling cases increased to 1,210, a 34.74% increase from the same period of the preceding year. 38.34% or 464 counseling cases were related to memory form pillows which were sold by Hyundai Home Shopping. Meat related counseling cases increased to 999 cases, more than double (285.71%) the number of cases from the same period of 2004. The majority of meat related counseling cases were questions about the bone soup Nongsusan Home Shopping recalled.
The vendors broadcasted apologies or recalled the above three products, referring to the results of product tests conducted by consumer organizations. Consumers purchase goods through the five major home shopping CATV channels, based on the vendors’ creditability rather than on the product producers. Therefore, it is forecast that the vendors’ announcement of consumer organization suggestions and taking follow-up actions will help enhance the overall reliability and corporate image of the home shopping vendors.
3) Summary
The consumer counseling cases received by over 180 consumer organization counseling offices across the country from January to June 2005 decreased by 13.38% from the same period of the preceding year, to 164,259 cases.
The top ranking counseling items were clothing, mobile handsets, health supplements and study materials for which problems were mostly raised before consumers requested for counseling. The consumer organizations have conducted surveys of the statuses of all the top ranking items. The relevant projects are being carried out by consumer organizations (‘Ways to Enhance Consumer Education on Correct Selection of Health Functional Food’ by Council of Consumer Organizations; ‘Phone-ari’ Handset Test Group operated by Seoul YMCA). They will present ways to improve the problem areas in the latter half of the year.
It was anticipated that the number of counseling cases for most items should have decreased, as total counseling cases in the first half of 2005 showed a decrease of 13.38% from the same period of 2004. The counseling cases of five items (air-conditioners, indoor furnishings, beddings, meat, and maintenance supplies) increased. The counseling related to all the five items other than air-conditioners increased because consumer organizations requested for their recall based on their experiment or product tests. It was proof again that consumer organization experiments or product tests have a great impact on the consumers.
Therefore, more businesses or vendors should pay more attention to the outcome of various surveys, research projects, experiments or product tests conducted by the consumer organizations. They should also provide a forum for jointly pursuing solutions, recognizing the consumer organizations as their partners.
