Analysis of Representative Consumer Rights Protection Cases Issued by the Supreme People’s Court (II) (Mainland China)

Continuing from the previous article, the following provides a brief legal analysis of several additional representative consumer rights protection cases.

I. Case Four: Unauthorized Medical Aesthetic Services and False Advertising — Treble Punitive Damages Awarded

Facts of the Case: Ms. Zhang underwent several cosmetic medical procedures, including botulinum toxin injections for facial slimming and rhinoplasty, at a cosmetics store, paying service fees totaling more than RMB 50,000.  The store represented that it possessed the requisite qualifications to provide medical aesthetic services and that all products used complied with national standards.  Following the procedures, however, Ms. Zhang developed adverse symptoms, including nodules and erythema on her nose and face.  Despite undergoing multiple corrective treatments, her condition failed to improve.  Ms. Zhang subsequently inquired with the health administrative authority and discovered that the cosmetics store had never obtained a Medical Institution Practicing License and therefore lacked the statutory qualifications required to conduct medical aesthetic procedures.  Believing that the store’s conduct constituted fraud, Ms. Zhang filed suit seeking restitution of the service fees and treble punitive damages.

Judgment and Legal Analysis: The court held that, pursuant to the relevant provisions of the Measures for the Administration of Medical Cosmetic Services, any institution engaging in medical aesthetic services must first complete registration with the health administrative authority and obtain a Medical Institution Practicing License.  In the present case, despite full knowledge that it lacked the requisite qualifications, the cosmetics store nevertheless provided medical aesthetic services to Ms. Zhang while falsely representing that it possessed proper licensing and compliant products.  The court therefore determined that the store’s conduct constituted fraud.  Pursuant to Article 55(1) of the Consumer Rights and Interests Protection Law of the People’s Republic of China, where a business operator commits fraud in the provision of goods or services, it shall, upon the consumer’s request, compensate the consumer for losses in an amount equal to three times the purchase price or service fees paid.  Accordingly, the court ordered the cosmetics store to refund more than RMB 50,000 in service fees and to pay punitive damages exceeding RMB 150,000.

This case constitutes a representative example of consumer protection in the medical aesthetics industry and reflects judicial efforts to rectify misconduct in emerging consumer markets.  First, the judgment clarifies the legal nature of medical aesthetic services.  Unlike ordinary beauty services, medical aesthetics directly implicate consumers’ health and personal safety.  Consequently, the State imposes strict market-entry requirements upon such services, and no entity or individual may engage in medical aesthetic practice without the requisite qualifications.  By linking unauthorized operation with fraudulent conduct, the court established a stringent standard of judicial scrutiny.  Second, the case defines the criteria for determining fraud.  The cosmetics store not only falsified information concerning its qualifications but also concealed the truth regarding product safety, thereby inducing the consumer to act under a mistaken understanding.  Such conduct fully satisfied the constituent elements of fraud.  Third, the judgment responds to persistent governance issues within the medical aesthetics industry.  In recent years, unlicensed institutions, unqualified practitioners, and counterfeit products have proliferated, posing serious risks to consumer health.  Through this decision, the judiciary sent a clear message that medical aesthetic services must return to their medical essence and that unauthorized practice and false advertising will be subject to severe legal consequences.  The ruling is therefore of significant importance in regulating the medical aesthetics market and safeguarding consumers engaging in “appearance-related consumption.”

II. Case Five: Fraudulent Misrepresentation in Pet Transactions — Forged Breed Certificates Constitute Fraud

Facts of the Case: Mr. Gao sought to purchase a purebred Pomeranian dog and located a pet company through an online platform.  The company displayed photographs and videos of the dog and expressly represented that the animal was a purebred Pomeranian, for which breed certification could be provided.
Relying upon such representations, Mr. Gao paid more than RMB 8,000 for the dog.  Four days after taking delivery, he brought the animal to a veterinary hospital for examination and discovered that the dog suffered from health problems requiring treatment.  More importantly, a professional verification institution subsequently confirmed that the breed certificate provided by the company was forged, and no other evidence established that the dog was, in fact, a Pomeranian.  Mr. Gao, therefore, alleged that the pet company had made false representations regarding the breed and health condition of the animal, thereby constituting fraud, and filed suit seeking rescission of the transaction and treble punitive damages.

Judgment and Legal Analysis: The court held that the breed of a pet significantly affects its market value, and breed certificates serve as important evidence establishing the authenticity of breed lineage.  As a business operator, the pet company provided forged breed certification and delivered a dog that was discovered to have health problems shortly after receipt, circumstances materially inconsistent with the company’s representations concerning quality and authenticity.  The court therefore concluded that the company’s conduct constituted fraud and imposed corresponding legal liability.  Pursuant to Article 55 of the Consumer Rights and Interests Protection Law, the court ordered the company to refund the purchase price of more than RMB 8,000 and to pay punitive damages exceeding RMB 24,000.

This case extends the application of consumer protection law to transactions involving live companion animals and carries substantial rule-establishing significance.  First, the judgment confirms that transactions involving live pets fall within the scope of consumer protection law.  In practice, disputes had arisen as to whether pets should be classified as “goods” and whether pet transactions should be governed by consumer protection legislation.  This decision effectively recognizes that consumers purchasing pets for personal or household purposes engage in consumer transactions protected by law, and that business operators therefore bear corresponding statutory obligations.  Second, the case establishes disclosure obligations in pet transactions.  Information regarding a pet’s breed, health condition, vaccination history, and related matters directly affects both market value and consumer purchasing decisions.  Business operators therefore owe consumers a duty to provide truthful, comprehensive, and accurate disclosures.  The submission of forged breed certificates in this case constituted a classic form of informational fraud warranting punitive damages.  Third, the ruling addresses practical issues within the rapidly expanding “pet economy.”  As consumer demand for pets continues to increase, deficiencies in industry standards and information asymmetry have become increasingly prominent.  Certain unscrupulous merchants pass off inferior or counterfeit animals as genuine purebreds, seriously infringing upon consumer rights.  By imposing punitive damages, the court increased the cost of unlawful conduct and contributed to improving the integrity of the pet transaction market.

III. Case Six: False Advertising Targeting Elderly Consumers — Judicial Protection of Senior Citizens Against Health Product Scams

Facts of the Case: Mr. Sun, aged 60, encountered online promotional materials published by Mr. Zhao concerning a certain therapeutic product.  Mr. Zhao claimed that the product possessed extraordinary effects, including lowering blood pressure, blood sugar, and blood lipid levels, as well as treating complications arising from diabetes.  Motivated by concerns regarding his health and reliance on the promotional representations, Mr. Sun visited Mr. Zhao’s business premises for a trial experience.  During the process, Mr. Zhao further exaggerated the efficacy of the product and repeatedly persuaded Mr. Sun to purchase additional services.  Ultimately, Mr. Sun purchased ten treatment sessions for a total price exceeding RMB 10,000.

During subsequent treatments, however, Mr. Sun discovered that the so-called “therapy” merely involved ordinary skincare procedures using common cosmetic products and bore no connection whatsoever to the purported medical benefits advertised.  After four treatment sessions, his physical condition remained entirely unchanged.  Realizing that he had been deceived, Mr. Sun repeatedly demanded a refund, but Mr. Zhao refused.  Mr. Sun therefore brought legal proceedings seeking restitution of the treatment fees and treble punitive damages.

Judgment and Legal Analysis: The court held that Mr. Zhao had grossly exaggerated the efficacy of the product by falsely claiming therapeutic functions for disease treatment, while the services actually provided materially differed from the advertised content.  By exploiting elderly consumers’ concerns regarding health and disease, Mr. Zhao induced Mr. Sun to make purchasing decisions based on mistaken beliefs, thereby constituting fraud.  Pursuant to Article 55 of the Consumer Rights and Interests Protection Law, the court ordered Mr. Zhao to refund treatment fees exceeding RMB 10,000 and to pay punitive damages exceeding RMB 30,000.

This case represents a typical example of judicial protection for elderly consumers and demonstrates the judiciary’s heightened concern for vulnerable consumer groups.  First, the judgment clarifies the standards for identifying consumer fraud targeting elderly persons.  Elderly consumers may possess comparatively weaker abilities in obtaining information and discerning misleading representations, rendering them particularly vulnerable to fraudulent schemes.  In this case, Mr. Zhao exploited elderly consumers’ anxieties regarding health and illness through false advertising, conduct that seriously violated the principle of good faith.  The court’s finding of fraud reflects a judicial policy favoring enhanced protection for senior citizens.  Second, the case delineates the legal boundaries governing health-product advertising.  Claims regarding the treatment of diseases fall exclusively within the regulatory scope of medicines and medical devices.  Ordinary wellness or therapeutic products are prohibited from advertising disease-treatment functions.  By judicially repudiating such false advertising practices, the ruling contributes to curbing widespread scams targeting elderly consumers in the health-products market.  Third, the decision highlights the deterrent function of punitive damages.  The award of treble damages served not only to compensate Mr. Sun for his losses but also to punish Mr. Zhao’s unlawful conduct.  The imposition of damages exceeding RMB 30,000 for treatment fees of approximately RMB 10,000 imposed a substantial economic consequence upon the wrongdoer and conveyed a clear message to society: exploiting elderly consumers’ health anxieties through deceptive marketing practices for illicit gain will be met with severe legal sanctions.

Although the foregoing cases arise from different consumer sectors, they collectively demonstrate both the breadth and depth of judicial protection afforded to consumer rights and interests.  Regardless of how consumer markets evolve or expand, the rule of law remains committed to safeguarding consumers and maintaining a fair and orderly commercial environment.