Consumers may get more protection

PUBLISHED : Monday, 03 December, 2007, 12:00am
UPDATED : Monday, 03 December, 2007, 12:00am

Watchdog tackles unfair practices after receiving more complaints

The consumer watchdog is to propose new laws to stamp out unfair trade practices.

The move, expected later this month, follows a raft of complaints, most of which have been against pay-TV companies and beauty salons.

Consumer Council chief executive Connie Lau Yin-hing said the proposed legislation would cover unfair or undesirable practices, misleading advertisements and aggressive sales practices such as harassment or coercion of customers.

'The principle is that information about goods or services must be transparent. If someone tries to hide some information or create misleading advertisements, it is a misleading practice,' Ms Lau said.

Some examples of unfair practices include automatic renewal of contracts, misleading claims about treatments offered by beauty parlours and harassment of customers by time-share companies.

Ms Lau said the council had received many complaints against telecommunications and broadcasting operators over the renewal of contracts without informing customers.

'Those contracts should not be changed or renewed unilaterally without the express consent of the consumer,' Ms Lau said.

The proposed legislation would also target false claims in advertisements, requiring companies and traders to provide evidence in support of the claims. 'Some beauty salons claim one can lose a certain amount of weight after joining their slimming programmes. We find these claims have no basis because every person's physical condition is different,' Ms Lau said.

The council also receives frequent complaints about difficulties in booking appointments at salons. Ms Lau said some salon operators had been using unfair practices to lure customers to buy their coupons.

'If a customer refuses to buy their coupons, which cost tens of thousands of dollars, the salons make it very difficult to book an appointment. This is what we see as an unfair practice.'

The legislation will also penalise aggressive sales tactics.

'We have had cases in which people attending seminars run by time-share companies are effectively locked in a room for seven to eight hours and their mobile phones taken away,' Ms Lau said.

'Some people cannot bear this kind of bombardment and sign contracts unwillingly.'

The council is studying overseas practices in drawing up its proposal, which is to be put to the Legislative Council by the end of the year.

For example, Singapore's Consumer Protection (Fair Trading) Act, passed in 2003, identifies 20 specific unfair practices.

These include misleading promotions that goods or services are of a particular quality and taking advantage of a consumer with harsh or oppressive terms.

The act says using small print to conceal a material fact or to mislead a consumer can be an offence.

The Singaporean law also allows consumers who have signed a direct-sales contract or a time-share contract to cancel the deal within a three-day cooling-off period.

In Britain, a cooling-off period can apply to direct sales and mail orders.

In Australia, traders have to publish correction advertisements of the same size as any misleading claims in the media, while some European countries impose fines for unfair practices.

Ms Lau said cooling-off periods could not be applied 'across the board' as it would be too much of a nuisance to business. 'We need to strike a good balance,' she said.

Dirty business

Of the 7,985 complaints received against telecoms companies between January and September, the number about misleading practices was 170

Of the 4,677 complaints against pay-TV companies in the same period, the number about misleading practices was 540