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Watchdog seeks prepaid card safeguards

A CONSUMERS' watchdog wants the authorities to charge companies that sell prepaid cards a deposit to go toward compensating consumers if their rights are violated.

Complaints about prepaid cards have increased considerably in recent years, but there are no laws to regulate their operation, said the Shanghai Commission of Consumers' Rights and Interests Protection.

The commission received more than 4,000 complaints about prepaid cards in 2008, 14 percent higher than in 2007. This year, prepaid cards have already attracted many complaints, officials said.

Consumers said some companies, usually beauty and hair salons or fitness clubs, encouraged customers to buy prepaid cards for future redemption but then close down without informing customers, and all the money on the prepaid cards is wasted. Other people complained that some companies were sold and the new owner wouldn't recognize the old prepaid cards.

The commission also said the Shanghai Industrial and Commercial Administrative Bureau should inspect each company to see whether it was qualified to offer prepaid cards.

"Many companies that have disputes with customers rely on the prepaid cards as one of their main sources of capital," said Zhao Jiaoli, secretary general of the commission.

"But once the capital chain breaks, consumers will have to suffer the loss. We are urging lawmakers to publish regulations on prepaid cards."

The commission and the bureau said customers who bought prepaid cards were advised to keep receipts and report any complaints to the bureau or to the police.

The Shanghai Industrial and Commercial Administrative Bureau said that it was taking the deposit charging idea into consideration.


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