Seller beware: rule change helps public get what they paid for

PUBLISHED : Tuesday, 31 December, 2013, 3:35am
UPDATED : Tuesday, 31 December, 2013, 4:52am

Rarely does a change of legislation make headlines in the entertainment news section of the newspapers. The Trade Descriptions Ordinance, as amended on July 19, is one of those rare examples.

In October, it was reported that the Customs and Excise Department - the principal enforcement agency of the revised law - met major organisers of music concerts to discuss the implications of the ordinance. Apparently the department had received complaints that some concerts failed to live up to organisers' promises. People were unhappy the events started late or that artists did not perform all the songs as promised.

Those complaints would not have been possible under the old ordinance, which applied only in respect of "goods". The revisions expand coverage to "services" - a significant change that means the service industry, such as those in entertainment, travel, cosmetics and telecommunications, is now also subject to the ordinance.

In addition, the amended law broadens the concept of "trade description" to encompass any indication with respect to the goods or services on offer, whereas under the previous legislation the term was confined to more conventional aspects such as price, composition and place of manufacture. Hence, the number of songs or dances performed in concerts may fall within the new definition.

The wide-reaching legal coverage has prompted reaction from traders. For instance, exhibitors at the annual Book Fair displayed creative tags such as "shocking price" and "friendly price" to avoid making explicit claims of offering the "lowest price". Many advertisements on air tickets and package tours now include an estimate of surcharges and taxes. Cosmetics companies toned down or removed claims of the efficacy of their products or services.

Consumers' awareness of their rights is on the rise. The agency received about 670 complaints and 3,000 enquiries during the first two months of the new law, exceeding the total number of complaints it got for the whole of last year.

The department has made at least two rounds of arrests under the amended law. Officers cracked down on operators and "pretend customers" of stalls selling dried abalone and ginseng in Mong Kok and Yau Ma Tei, who misled consumers into believing the prices were calculated in catties not taels.

In the second case, customs officers arrested the director of furniture chain store J.M. Soft, which reportedly failed to deliver furniture time and again after accepting payment and subsequently closed down as a business.

Under the revised ordinance, the agency may, with the secretary for justice's consent, accept a trader's written undertaking in lieu of prosecution. The undertaking is a commitment by the trader, usually for at least two years, not to repeat the commercial practice in question.

In the first such case, the department accepted a written undertaking from an educational institution that had claimed falsely that graduates of its higher diploma course would qualify for direct entry to the final year of a degree programme in local universities.

While not all cases are suitable to be dealt with by written undertakings - the agency may prefer to prosecute repeat or serious offenders - this mechanism presents an option for cases that are less serious.

Eugene Low is a practising lawyer with experience in intellectual property, data privacy and trade descriptions laws