At last, moves to crack down on crooked salesmen

PUBLISHED : Friday, 16 July, 2010, 12:00am
UPDATED : Friday, 16 July, 2010, 12:00am

The government wants to have people who mislead you into buying services put in jail.

The move has been prompted by a rising number of complaints of unscrupulous sales practices - of people locked indoors and coerced into joining travel membership schemes and yoga club members talked into prepaying fees days before a chain closed.

Now, two years after the Consumer Council outlined how the government should step up consumer protection and two months after a yoga club with more than 10,000 members shut, the Commerce and Economic Development Bureau has kick-started a public consultation on the issue.

The bureau proposes a seven-day 'cooling-off period' for the sale of memberships in travel schemes and any transaction made during unsolicited visits to homes and offices, such as the sales of TV set-top boxes and pay-TV services. During this period, consumers could cancel purchases and be repaid in 30 days.

The existing trade description law - which regulates physical goods - should be extended to cover services, Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan says in the consultation paper introduced yesterday.

Misleading and aggressive sales tactics, and accepting payments without the intention or ability to provide goods or services, would be made criminal offences subject to a maximum fine of HK$500,000 and up to five years in jail.

The Customs and Excise Department would be responsible for enforcing the law. Apart from prosecutions, customs should be given the power to seek an undertaking from a seller suspected of infringements to stop the sales tactics in question. Out-of-court settlements between sellers and consumers would be arranged.

Customs chief Richard Yuen Ming-fai believes the new legislation will improve protection for consumers and make the customs' work a lot easier. 'At the moment, we only deal with products. Very often, unscrupulous traders and shops - when we take action - engage in other sales tactics. In future, it will be a total approach from us because they won't be able to play around with the law,' he said.

Consumer Council chief executive Connie Lau Yin-hing welcomed the proposals, but said the cooling-off period should be extended to service industries which usually accept prepayments, such as beauty, yoga and fitness centres.

Federation of Beauty Industry chairman Orpheus Choy said the definition of 'a lack of ability' to provide services is debatable. 'If there are 100 practitioners serving 5,000 customers, is the number adequate?'

Pay-TV providers Now TV and Cable TV were studying the consultation paper, company spokeswomen said.

The consultation will run until October 31. The government aims to introduce an amendment in the next legislative session.