Misleading sales tactics targeted in trade bill

PUBLISHED : Thursday, 23 February, 2012, 12:00am
UPDATED : Thursday, 23 February, 2012, 12:00am


It is not uncommon for restaurants in online food-review forums to be highly praised, so much so that the comments do not appear to have been written by bona fide diners.

Many companies, including restaurants, are understood to be paying agents to post comments that praise them or attack their rivals.

Such a practice will become an offence under planned legal revisions that aim to tackle unscrupulous sales tactics such as misleading consumers into buying products or services by omitting essential information.

Lawmakers received a proposal yesterday from the Commerce and Economic Development Bureau to expand the scope of the Trade Descriptions Ordinance, a law that prohibits unfair trade practices.

The proposed bill covers both physical and online shopping. Companies may be breaking the law if they post advertorials or comments - which promote themselves or degrade competitors - using pseudonyms on online discussion forums.

Assigning agents, disguised as customers, to push goods in shops would also be seen as an offence.

The bureau also suggests a ban on 'aggressive' commercial practices that limit consumers' choices.

The amendments could help stop companies from setting up unreasonable barriers to cancelling service contracts, Consumer Council chief executive Connie Lau Yin-hing said.

The watchdog has received complaints saying pay-TV providers, telecoms companies and fitness centres raised hurdles when consumers tried to get out of contracts.

'Some companies require clients to file their cancellations using a designated form that is hard to locate,' Lau said. 'Others refuse to pick up calls from customers.'

She also praised government efforts to step up the regulation of advertorials on social media, as people tended to trust such platforms more than traditional advertisements.

The bill will be gazetted tomorrow. If enacted, it could be effective next year. Offenders are liable to a maximum fine of HK$500,000 and imprisonment of five years.

The court will consider a list of factors when deciding whether a company has been aggressive. The use of threatening or abusive language to push consumers into entering into contracts is one such factor.

An information-technology veteran said it would be difficult to enforce the law on anonymous advertorials, given that they were widespread and involved both local and foreign websites.

'They are everywhere on Golden Forum and OpenRice,' said Francis Fong Po-kiu, the president of the Hong Kong Information Technology Federation.

To promote themselves, some companies employed agents to create fan pages on Facebook. It would be hard for authorities to oversee such a practice, he said, as the platform is headquartered in California and falls outside local jurisdiction.