Beware of deceptive sales tactics, warns watchdog

Watchdog cautions consumers against being tricked by unscrupulous companies into buying memberships for products they may not want

PUBLISHED : Thursday, 16 May, 2013, 12:00am
UPDATED : Thursday, 16 May, 2013, 5:27am

Some tactics used to talk people into buying or renewing hotel or dining club memberships are not just misleading but even close to deception, the Consumer Council has warned.

The watchdog said yesterday it had received 124 complaints about such practices that ranged from a person being tricked into renewing a membership to one who bought a membership that turned out to have nothing to do with the hotel in question.

"When there is enough proof, those using such tactics could be prosecuted," said Michael Hui King-man, the chairman of the council's publicity and community relations committee.

"[But] it's hard to gather evidence unless there is a recording of the telephone conversation."

Legitimate memberships entitle consumers to discounts and sometimes free stays in hotels.

In one case, the council said, a woman received a call from someone who claimed to be working for "Company A".

She had bought memberships in the company before and thus agreed to add another five-star hotel plus dining membership at HK$2,188.

After making the payment, the woman received shoddily printed coupons that appeared to be from a different company.

A check with Company A revealed that the package she bought had nothing to do with it. It turned out the salesperson had impersonated company staff.

In another case, a man who wanted to end his membership was tricked into paying more.

Only prepared to pay for a year's membership, the man was furious to find out the service had been renewed automatically.

After he complained to the company, its manager promised that he would be repaid if he did not use the dining or hotel coupons throughout the year.

Two months later, he was asked for his credit card details to verify his identity before cancelling the membership.

But the staff members used the information to charge him for yet another dining membership, doubling his loss to HK$4,376.

"One should never reveal credit card details over the phone," Hui said.

Consumers could alert their credit card companies to void payments they did not authorise instead of giving in to such unscrupulous salespeople, he said.

They should also pay attention to contract clauses and discount details to ensure there were no surcharges for the use of particular services.

The council yesterday also warned consumers to use their credit cards with caution, saying banks continued to charge high interest rates for cards.

The default charge for cash advances had risen slightly from between 38.7 and 47 per cent in 2010 to between 39.4 to 47.4 per cent this year, it said.

A majority of card issuers - 18 out of 20 - also charged interest rates of at least 30 per cent if cardholders did not pay their purchase balance in full each month.