Hong Kong fitness centre director, salesmen arrested after allegedly conning ‘socially incapacitated’ man out of HK$900,000 in fees
- Customs officials said the victim was marched to ATMs and moneylenders so he could pay for ‘services’ over a 60-day period
- One contract he signed warned him he would face prosecution if he revealed the details of the agreements to anyone
The director of a now-defunct fitness centre and his two salesmen have been arrested for allegedly using aggressive sales tactics to force a “socially incapacitated” man to procure gym services worth more than HK$900,000 (US$116,000), a customs official said on Tuesday.
The victim, said to be in his 30s, lost about HK$500,000 in savings and ran up credit card debt of HK$200,000 before then being taken to three moneylenders to borrow another HK$220,000 to pay for services purchased over a 60-day period, according to Superintendent Suzette Ip Tung-ching.
To prevent him from seeking help, the victim “was told he had signed an agreement that restricted him from revealing the details of the contracts to the third party,” said Ip, head of the Customs and Excise Department’s unfair trade practices unit.
The agreement warned he would face “prosecution, compensation and criminal liability” if he breached it, she added.
The case came to light in last August when the man tried to borrow money from his father to pay off the loans.
The victim, who suffers from difficulties in social interactions, was first approached by a salesman on a busy Mong Kok street last June before being lured into a local fitness centre.
“In the centre, the victim was threatened that he would be sued and owe more than HK$100,000 in compensation if he refused to sign a membership,” Ip said.
“He was scared, and followed their instructions to sign the seven-year gym services contract worth more than HK$70,000.”
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The men then took him to an ATM machine where they demanded he withdraw money, then to a nearby chain store where he was told to purchase gift vouchers. He was then ordered to come back to the fitness centre the next day to pay a remaining balance.
When the man returned, he was pressured into signing even more contracts.
“The victim was also ordered to pay surety for the purchase of gym equipment that was designed for him,” Ip said.
Between June and August, the victim went to the fitness centre at least 15 times. “During each visit, he was lured and forced to sign new contracts and make payments after a brief workout,” the superintendent said.
She said the gym service contracts the victim signed amounted to more than HK$900,000.
“It is the biggest amount for a single victim involving unfair trade practices by a fitness centre since the trade descriptions law was expanded to include services in 2013,” Ip said.
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Customs officers began investigating the centre after receiving the father’s complaint at the end of August. According to the department, the gym opened in March of last year, but had shut down by September.
After an in-depth investigation, customs officers arrested its 22-year-old director and his two salesmen, aged 34 and 38, between Friday and Monday.
The trio was arrested for engaging in aggressive commercial practices in their sales tactics, and forcing the victim to procure the fitness services.
“This is in violation of the Trade Descriptions Ordinance, which carries a maximum penalty of five years in jail and a HK$500,000 fine,” Ip said.
The three men have been released on bail pending for further investigation.
“Customs will continue to pay close attention to the operation mode and market dynamics of the fitness industry to combat unfair trade practices by fitness centres,” Ip said.
She urged other victims and members of the public to report illegal activities to the customs department’s 24-hour hotline at 2545 6182.
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