At the beginning of a new semester, Xingkong, a well-known piano training institute, suddenly evaporated causing the students' parents huge loss in prepaid tuition fees. And its announcement that it will partly reopen its centers has not cleared people's worries. Similar cases were reported last year, as operators of private education and training institutes in cities such as Beijing, Shanghai and Shenzhen downed their shutters and absconded with the prepaid tuition.
Although such cases comprise only a small percentage of the tens of thousands of training institutes nationwide, the amount of money involved in these cases add up to more than 1 billion yuan ($156 million). And among those that have absconded with prepaid fees are not only small community training centers, but also nationawide chains.
These cases have exposed the loopholes in training institutes' managements, as well as service seekers' over-expectations from and blind trust in these institutes. It's also likely that the closed institutes had financial disputes or lacked liquidity.
To prevent such cases, first, the authorities should play an active role in market management and regulation. And their policies of registration, management and taxation, as well as supervision of training institutes should be consistent.
Second, consumers should learn to protect their legal rights and interests. Some people purchase training institutes' services because of their attractive promotions, and without knowing much about their actual situation.
For instance, one victim paid in advance for the training of his 10-month-old child in painting, English and memory training, which is nothing but blind pursuit of academic and artistic perfection on behalf of a child that hasn't even learned to talk. Besides, some consumers choose unqualified training centers just because their fees are lower than others.
This shows that service purchasers have to learn to choose qualified training institutes for their kids, for which they have to check whether an institute has qualified teachers, proper resources and enough liquidity, and keep the payment receipts as proof for further reference, especially during emergencies.
Third, potential operators should learn how to run a training institute before opening one. Few training centers intentionally defraud consumers. Many of the institutes that shut shops did so after encountering problems. For instance, some institutes are not professional enough to win public trust and keep attracting consumers. As a result, they run out of cash and are unable to fulfill their promise to the consumers. In some cases, unforeseen accidents undermine the institutes' day-to-day operations.
And fourth, judicial authorities should resolve such cases in time, in order to protect the legal rights and interests of the parties involved. But in reality, once the organizer of training organizations absconds with the customers' prepaid tuition, it is very difficult for the victims to safeguard their legal rights. Such circumstances will actually increase the incidence of such cases.
Moreover, the authorities should accord priority to improving the laws and regulations to prevent such cases, which is always better than dealing with a case in which the institute operator has absconded.
Maybe we should learn from the good examples set by other countries in this regard. The prepaid tuition model, which is common among training centers, should be improved to minimize the financial risks of consumers. For instance, the period for which tuition has to be paid in advance can be reduced, or consumers should be given the option to pay the fees in advance for the first three months and then month by month. The third-party payment model, such as that adopted by online shopping platforms, is also worth a try.
In other words, the government, consumers and training institutes should make joint efforts to solve the problem.
The author Chu Zhaohui is a researcher at the National Institute of Education Sciences.
