Mengenai NCCC11:23 am l 27 July 2020

Consumers are in limbo over refund from service providers who have collected the deposit or payment for numerous services but are not providing the promised services. Consumers are seeking for the refund but to no avail.

As many as six hundred thousand people lost their jobs as of May 2020 due to the Movement Control Order (MCO). Many were forced to stay at home as the government wanted to contain the infectious corona virus. Consumers were cash strapped as many were laid off from jobs.

Kindergartens, private schools and higher learning institution were closed so were gymnasiums, saloons, airports, transportation, travel and tour services to name a few.

Before the MCO was imposed, many consumers paid deposit and fees for kindergartens, private schools, gymnasiums, wellness, designated car parks, wedding halls and reception and booking travelling tickets via airlines as well as travel agencies. All these came to a halt when MCO was implemented and other nations too declared lockdown in their respective countries.


Customers who have booked for air ticket as well as tour locally and overseas have also taken travel Insurance and they were unable to travel. The issue raised by consumers are on refunds. Not many service providers are refunding the cash they took from consumers.

Complaints sent in droves from consumers to get their money back for services not rendered. They are seeking for refund from the service providers who did not provide the services. Consumers are confused as to where can they lodge complaints. For private schools, kindergartens and private colleges many consumers are forced to pay and for some, their deposits were forfeited for no apparent reasons by the service providers.

Ministry of Domestic Trade and Consumer Affairs have issued the Consumer Protection (Future Services Contract) (Amendment Order 2014 (which came into effect in July 2014) to specifically state the categories of services that comes under the definition of future services.

Consumer Protection Act 1999 (CPA), ‘No Refund and No cancellation’ policy by future services contract violates the basic consumer rights. These service providers should understand that they cannot charge consumers for services they have not rendered. Although the pandemic has caused the businesses to be closed, but charging consumers due to the pandemic is not an excuse.

The government through its agencies should come out with a guideline or notice which the service providers will be able to comply to protect the vulnerable consumers. Everyone is badly hit and everyone needs money.

During this challenging time, refund is what the consumers are asking for. Looking at one case, a man booked a hall for wedding and caterer for wedding which was supposed to take place during MCO. Since then, the wedding was called off. The caterer refused to refund the deposit although the cancellation was informed a couple of months earlier. He would have not bought any food items as they are perishable.

The proprietor of the wedding hall also refused to refund but gave an alternative date but within a stipulated time of six months. It is very unbecoming of the service providers to state their terms and conditions and consumers are denied of their refund.

Malaysia Aviation Commission (MAVCOM) should play a pivotal role by protecting consumers who bought flights tickets through travel agencies and online bookings by making sure that the airlines refund the consumers the cash paid upfront for services not rendered.

Our borders are still closed and many countries have not open theirs too and in fact there is always a possibility for the virus to come back. So flying in and out of the country is not going to be easy and it might even take a longer time. Looking at this scenario, it is only proper that MAVCOM should insist the airlines to refund the consumers the amount paid and not by offering a voucher or points to be used within a DICTATED time frame.

It looks as if the consumers are at the mercy of the airlines as well. The similar scenario occurred in many other countries but many airlines are refunding in full to their customers.

Airlines such as Kuwait, Cebu, Scoot and a few other airlines are offering total refund for the tickets purchased for the flight during the pandemic. Many other airlines are also offering the refund as stated in wego website.

According to Section 17(2) of Consumer Protection Act 1999, a consumer who cancels a future services contract may be charged by the supplier the following amount:

a) Five percent of all the full contract price;

b) The cost of any goods the consumer used or is keeping, or

c) The portion of the full contract price representing services received by the consumer

This clearly shows that consumers are entitled for refunds for the services they have paid for services but cancelled it or the service providers did not honour the promises. The service providers can charge five percent but must refund the ninety five percent.

Ministry of Tourism, Arts and Culture too should assist consumers to get their refund from cross border travel and tour agencies. Many consumers have paid full amount prior to their travel as the companies insisted them to do so.

Unfortunately many of these travel agencies refused to refund the cash paid. Many of these agencies did not answer to the phone calls made by the consumers. Consumers were left in the lurch and were not sure where they can go to seek for redress.

Complaints lodged by the consumers to the various government agencies such as MAVCOM, Tribunal, MCMC and many other agencies were replied with unsatisfactory responses or no response at all.

Consumers and businesses are all affected by this pandemic. As consumers, their basic rights have to be protected so service providers must not take advantage when it comes to redress and getting refund. The government should design a mechanism for consumers to get their refund from all these service providers.

Baskaran Sithamparam

Senior Manager
National Consumer Complaints Centre