Deposits urged to guarantee quality service paid in advance
19/1/2006 7:26
Shanghai Daily news
Any company that sells
pre-paid memberships, such as health clubs and restaurants with discount VIP
programs, should put down a deposit to ensure that consumers can get their money
back in the event of bankruptcy, several members of an advisory panel to the
city government have proposed this week.
The companies should also be
required to get a guarantee from a reputed company with strong profits in case
the deposit isn't enough to cover all consumer losses, said Liang Yuankai, a
delegate to the Shanghai Committee of the Chinese People's Political
Consultative Conference.
The deposit should be paid when a company registers
with local market watchdogs. The company that guarantees the start-up would be
liable for paying any remaining debt after the deposit is used up.
The
proposal has been forwarded to the ongoing session of the committee for
discussion.
"It is necessary to establish a deposit system to complete the
current business registration system, especially for those small companies that
have few fixed assets," said Liang.
Thousands of financial disputes were set
off last year by the closure of restaurants and bookstores that sell VIP cards
offering a discount to customers.
The shanghai Commission of Consumers'
Rights and Interests Protection received more than 5,000 complaints about closed
stores that charged consumers in advance, an increase of almost 400 percent
year-on-year.
Most of the complaints were not solved as the company owners
were nowhere to be found.
In one case, Scholar Books, a privately run book
retailer in the city, shut down its three outlets in June because it couldn't
pay off massive debts owed to seven banks.
About 300,000 members of its VIP
program said the store still owes them 10 million yuan (US$1.23
million).
Though another bookstore chain from Jiangsu Province later took
over the three outlets, the new owner won't take over Scholar's debts, estimated
at around 70 million yuan.
Officials with the Shanghai Industrial and
Commercial Administrative Bureau, however, said the proposal could make it more
difficult to start up a small businesses. The city has enacted several favorable
policies to encourage entrepreneurs to set up small, private companies to boost
employment.
|
