Council Condemns Malpractices in Sale of Hotel/Dining ClubMembership -  CHOICE # 439 (May 15, 2013) 

Unscrupulous sale tactics bordering on fraud in the sale of hotel/dining club membership have come under the severe censure of the Consumer Council.

The Council has seen a proliferation in the use of malpractices by errant sales agents to promote their trade to unwary consumers.

Typical of these undesirable practices include: false representation, unauthorized withdrawal from credit card account without the consent of the cardholder, impersonating as employee of another company, etc. so as to clinch a transaction.

According to the Council statistics, a total of 124 complaints were levelled against the services of hotel/dining club membership last year; nearly half of them (60 cases) involved alleged undesirable sale practices.

In this issue of CHOICE is highlighted a number of typical cases which complainants have brought to the notice of the Council for redress.

In one case, Mr. Leung received a phone call informing him his dining club membership has been renewed. He protested that he had never consented to any renewal but was told that it was automatically renewed after the company's attempts to contact him earlier failed. Further, a sum of $2,188 was deducted from his credit card account as payment; the membership card and coupons were on their way by mail.

Upon protestation, Mr. Leung was promised by a manager of the company that he would be refunded the membership fee if he did not spend any of the dining coupons before expiry in one year. A document would be emailed to him for confirmation; it never did arrive.

Two months later, Mr. Leung received another call advising him that the company could delete the personal data on him to avoid unsolicited sales in future. He was then asked to produce his credit card information for verification, which he duely complied believing it to be a genuine offer.

As it transpired he was later informed that he had agreed to the purchase of an additional membership and the deduction of $2,188 as payment from his credit card.

Furious, he demanded the immediate cancellation of the two memberships and the refund of $4,376. But again he was told to wait until their expiry. And again to wait for a confirmation document, which again never came.

Upon the conciliation of the Council, the company agreed to the refund of the renewed membership of $2,188 but not the latter which the company insisted that Mr. Leung has consented to pay by credit card by presenting his credit card information again to the company.

In another case, Ms. Chiu, a hotel membership holder, received a phone call purportedly from an employee of the membership company, persuading her to join a 5-star hotel/dining membership. She agreed to the purchase at $2,188 and gave the employee her credit card information.

Later Ms. Chiu discovered the membership was issued by a company other than the one she dealt with before. She was sent some shoddily printed hotel/dining coupons.

It turned out that the "employee" was impersonating as staff of that company. Ms. Leung demanded cancellation and refund or, alternatively, to arrange a one-night free accommodation at the 5-star hotel as promised. The matter was referred to a company manager.

The manager undertook to arrange for her hotel stay and suggested an upgrade at an additional charge of $400. Ms. Leung refused agreeing finally to just a standard room.

Despite many calls, Ms. Leung received no response from the company. When she finally got hold of the manager, she was roughly treated and asked to pay an extra $800 for the free hotel accommodation.

She lodged her complaint with the Council, and eventually received her refund some one month later.

Consumers are cautioned to be wary of such malpractices in the sale of hotel/dining membership. Such malpractices may become offences under the amended Trade Descriptions Ordinance which is expected to come into effect later this year.

For further advice, consumers can refer to the report in this issue of CHOICE.