HONG KONG: The Consumer Council received a record high number of complaints last year. Fueling the spiral was a sharp increase in complaints against financial services, the council revealed yesterday.

Complaints to the council last year increased by 9 percent to 42,000. Telecommunication services topped the list with 10,000 grievances filed.

Complaints against financial services increased 10 times over the previous year to 9,000.

Council chairman Anthony Cheung expects the number of complaints to go higher still in 2009 because of the sluggish economy.

The government has already allocated HK$2 million to the council. The funding will cover the hiring of short-term workers to handle complaints to assess legal matters and to make retail price comparisons.

Cheung cautioned consumers not to pay for services or products in advance.

More than 90 percent of complaints against financial service companies related to Lehman Brothers' investments.

The council has received replies from banks addressing about 500 related complaints. From among that number 280 complaints have been resolved through settlement. Complaints emerged from transactions ranging from HK$30,000 to HK$1.5 million.

Cheung said the council is processing 41 applications to the Consumer Legal Action Fund on behalf of Lehman Brothers' investors.

He said some of these applications have sound legal basis. The council will decide whether to approve the applications after the Lunar New Year.

Cheung said the council has made prompt response to Lehman Brothers' investors needs.

"We are not acting slowly. But we are not in a hurry to the extent that we ignore the need for serious scrutiny of each complaint. Making complaints and taking legal action are two different matters," he said. "We need to seriously examine every document signed between clients and suppliers, the verbal information given to clients and to determine under what circumstances was the information given. We will be assailed by the defendants if we do not make careful preparation."

He added that the financial crisis has placed enormous pressure on the council.

Meanwhile, Cheung also said the council has achieved results in its fuel and food price survey.

He added, however, that the matter will be reviewed, as to whether the surveys should continue under the sluggish economy.

(HK Edition 01/20/2009 page1)