Beauty centres to escape new sales laws

PUBLISHED : Tuesday, 25 May, 2010, 12:00am
UPDATED : Tuesday, 25 May, 2010, 12:00am

The government will not make a 'cooling-off' period compulsory in beauty centres' sales contracts, though a few centres, looking to distance themselves from aggressive techniques in the industry, say they will still be having such a clause.

After increasing complaints about beauty services, the idea of a cooling-off period was proposed last year, which would allow clients to quit a service contract and get a refund.

The Hair and Beauty Merchants Association says it will have details of a cooling-off policy - such as how long the period is - ready at the end of this month. A few chains had agreed to join the plan, association president Chao Chen-kuo said.

But many centres remain unenthusiastic about the idea.

And in the Legislative Council yesterday, Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan voiced caution over expanding cooling-off arrangements to the beauty industry, and to all transactions involving prepayments.

Last week the government put forward proposals for stepping up consumer protection by amending the Trade Description Ordinance to include service industries. Among the recommendations was a cooling-off period for sales of services during uninvited visits to homes. Offering false descriptions of services and using high-pressure sales techniques including lock-up clauses should be made offences, it suggested.

Despite the lack of government backing for cooling-off periods in the beauty industry, Chao said a group of members would like to push for one, and a lawyer was drafting clauses.

'They would like to keep a distance from the bad examples [in the beauty industry],' he said.

'Now that the [commerce] secretary has said it is not compulsory, I don't know if anyone will change their mind.'

At the Legco panel meeting yesterday, in which Lau explained the proposals, lawmakers pressed for cooling-off periods to be extended to more industries including the beauty and slimming sectors and those offering prepayment packages.

Voicing caution, she said that when people signed up for prepayments they usually enjoyed discounts, and it would not be desirable if consumers lost discounts because of a compulsory cooling-off period applied to all businesses, even those which were financially sound.

Panel members including James To Kun-sun and Starry Lee Wai-king suggested that a fund be set up to ensure that consumers got their prepayments back if businesses shut. But Lau said numerous issues had to be resolved if a fund was to be set up. 'What industries will the fund cover ... and who will regulate it?'

She also heard challenges to an exclusion of financial products and property in the upcoming amendment, at which she said that authorities including the Monetary Authority and the Transport and Housing Bureau were already stepping up regulation of the two sectors.

Also at the meeting was the Commissioner of Customs and Excise, Richard Yuen Ming-fai. Under the government's proposal, the department would serve as a prosecutor of law-breaking service providers. If the amendment was approved, officers would be able to carry out more undercover missions, Yuen said.

A public consultation on the amendment would take place from July for three months, officials said.

The chairman of the Federation of Beauty Industry, Orpheus Choy, was unenthusiastic yesterday about the reality of a cooling-off period.

He said it might be a false assurance of quality service, and was far from a solution to malpractices.

Bad businessmen could offer excellent services during the cooling-off period and return to their unscrupulous ways after it, he said. Banking charges would be a headache for operators if customers asked for repayments after settling bills by credit cards, he said. 'If people jokingly signed up for lots of deals and then demanded repayments, the operator would be killed by the banking charges.'