Properties Outside Hong Kong —Key Issues of Advertisements
Consumers’ demand for properties situated outside Hong Kong (“POH”) has seen a steady climb in the past 30 years. However, purchasing POH often entails high stakes involving millions of dollars, higher risks and uncertain factors. With a view to safeguarding consumer rights, the Consumer Council conducted a study through a comprehensive research methodology, including analysis into 261 complaint cases, advertisements survey on 1,314 advertisements collected, mystery visits to 36 projects, in-depth interviews with relevant authorities and stakeholders and benchmarking regulatory regimes in 7 other jurisdictions. The findings were compiled in the “Purchase of Properties Outside Hong Kong – A Study on Enhancing Consumer Protection” report.
A survey of the advertisements relating to the marketing of POH was conducted in order to find out what marketing and advertising practices were being used by both licensed and unlicensed agents. The survey covered advertisements placed by developers, agents or salespersons in 3 different channels and mediums, namely, print media, online platform as well as TV. It was concluded that POH advertisements had insufficient regulation with the findings as follows:
- Print Advertisements. Over 40% of the total print advertisements did not give any licence information while the exemption disclaimer was found in nearly 35% of the print advertisements, meaning that at least this percentage of advertisements was placed by unlicensed estate agents;
- Online advertisements. For online advertisements, only around 17% of the advertisers stated that they had a licence under the EAO. 78% of the advertisers also displayed the exemption disclaimer indicating that they employed unlicensed salespersons. It was also observed that the exemption or liability disclaimers were not placed in a conspicuous place but instead placed at the end of the advertisements. Readers could only read them after scrolling down many pages or these disclaimers could easily be missed;
- Practice Circular of the EAA only regulates the placement of advertisements and their content by licensed estate agents selling UPOH. The Practice Circular of the EAA regulates. Completed POH remain outside of its scope and unlicensed agents selling POH remain unregulated;
- No sufficient regulation of the font size of the disclaimers in the print advertisements. For the print advertisements which included exemption disclaimers, around 22% of the advertisements had a font so small that a person with normal eyesight could not easily read the content and a tool such as a magnifying glass was required to help improve readability;
- Lack of uniformity of the wording used for the exemption disclaimer. The Exemption Order does not specify a standard statement in prescribed wordings to be inserted in the documents and advertisements. As such, numerous different forms of descriptions were used with a view to satisfying the Exemption Order. An average consumer would find the different ways of expressing the Exemption Order confusing and hard to understand;
- Misleading advertisements. Agents use many tactics to lure and confuse consumers. Claims of immigration shortcuts, unrealistically high rental returns, advantages, free gifts, interest-free instalments have all been used as bait. Indeed, all the 7 researched jurisdictions have some way to regulate and govern the marketing or advertisements of such properties in that jurisdiction (i.e. the Mainland, Singapore, The UK (England & Wales), BC, Malaysia, Taiwan and NSW).
Visit https://www.consumer.org.hk/en/advocacy/study-report/purchase-of-poh to view the full report.