The Consumer Council (“the Council”) welcomes the Government of the Hong Kong Special Administrative Region’s (HKSAR) policy recommendations to the Trade Descriptions Ordinance (TDO) (“the Ordinance”) to stipulate a statutory cooling-off period for prepayment contracts for beauty and fitness services. This is an important step in strengthening consumer protection against unfair trade practices and enhancing the overall consumer protection regime.
The proposal aligns with the Council’s longstanding advocacy. In particular, the Council considers the recommendations to establish a 7-day statutory cooling-off period and a 14-day refund period to be important tools for safeguarding consumer rights and interests, and enhancing market fairness. On the one hand, these measures allow consumers sufficient time to reflect, thereby reducing impulsive consumption decisions or those made under misleading or intimidating circumstances. The cooling-off period could also reduce disputes arising from alleged unfair trade practices during the sales process, and enable consumers to cancel contracts and obtain refunds without resorting to litigation. On the other hand, the proposal also clarifies refund arrangements, helping to reduce consumer disputes and contributing positively to greater industry transparency and overall consumer confidence.
Regarding the Administration’s recommendation to set a regulatory threshold for the statutory cooling-off period based on contract value with different options provided, the Council expresses support, and agrees that exempting lower-value contracts would help minimise the impact on normal business operations. The Council also supports the proposed cap of 2 years on the statutory contract period, and the requirement for contracts to take effect within 3 months. Based on complaints received by the Council over the past 2 years regarding closures of beauty and fitness service providers, most cases involved contracts exceeding 2 years, while in some individual cases the contract commencement date was deferred by more than 30 years, exposing consumers to prolonged risks of prepayment consumption. The Council opines that restrictions on both contract length and commencement period effectively reduce risks borne by consumers, and also provide reference indicators for consumers to assess whether contract pricing offered by traders is reasonable under the cap on contract duration.
Mr Clement Chan Kam-wing, Chairman of the Consumer Council, said, “The Consumer Council has long been concerned about the risks arising from prepayment consumption, particularly in beauty and fitness services involving large sums and lengthy contract periods, where consumers are prone to making hasty decisions under high-pressure sales tactics. Therefore, the Council welcomes and fully supports the HKSAR Government’s policy recommendations, which will, in the long run, help build a healthy and sustainable market environment, further enhance the consumer protection regime, and foster a safe and reassuring consumption environment for consumers.”
In addition, the Council agrees that strengthening the enforcement mechanism is key to ensuring the effective implementation of the proposed regulation. The Administration proposes the “wrongly accepting payment” offence under the Ordinance to be included under Schedule 1 to the Organized and Serious Crimes Ordinance (OSCO), thereby enhancing the investigative and enforcement powers of the Hong Kong Customs and Excise Department. Such measures would increase the deterrent effect, thereby helping to curb unfair trade practices and prevent consumer losses.
The Council will submit its views to the Administration during the consultation period, and will continue to monitor market developments and strengthen consumer education. Consumers are reminded to carefully consider the risks involved in prepayment consumption, to fully understand their consumer rights, and to make prudent and informed consumption decisions.