Resurgence of Hotel & Dining Membership Undesirable Sales Practices – Be on Alert to Telemarketing Scams

16 July 2018
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Resurgence of Hotel & Dining Membership Undesirable Sales Practices –  Be on Alert to Telemarketing Scams

Hong Kong people love dining and travel, which opens up business opportunities for telemarketing of hotel and dining membership, predominantly of hotels in Macau. The past 2 years have seen a resurgence of undesirable sales practices of hotel and dining membership, despite the Consumer Council naming one of the traders for malpractices in 2014.  Council statistics showed that in the past 2 years, a total of 176 complaints were leveled against these operators, and in the first 5 months of this year, 41 cases were received involving mainly unfulfilled promises after payment.  Due to the murky background of some traders, they were difficult to be traced for contact or redress.   Further, some claimed speciously that membership withdrawal could only be made after renewal, allegedly engaged in using extortionist tactics to extract payment.  Some were also found to make claims at variance with the contract agreement.  As some of these complaints are suspected to involve criminal deception, the Council has referred them to the Police and the Customs and Excise Department (C&ED) for further investigation.

Consumers are cautioned to be wary of membership telemarketing on the phone or via short message service, and guard against being rushed into a transaction by the enticement of the many purported benefits.  Stay alert even if the caller uses a local telephone number or claims to represent a notable company; always check and verify the company background, read carefully the terms and conditions of the contract and never disclose any personal information or authorise the transaction.  The Council also calls on the authorities to strengthen law enforcement in curbing undesirable membership marketing operators to avoid the problem worsening.

Case 1: Multi-benefit entrapment – contact difficult  after payment

In March last year, the complainant agreed to buy from a telemarketing caller claiming to represent a Macau hotel conglomerate, a membership at $2,499 that promised her to 2-night accommodation in a 5-star hotel, lunch buffet, return jetfoil tickets and 50% discount rates for admission to performances.  Immediately she placed a booking for a room during Easter. Later she received a letter concerning her membership from a Company A other than the hotel.  She called up the company but was told outright it had no record of her hotel booking.  Despite repeated calls, over the next 6 months, to enquire about the status of her booking, the service hotline was either engaged or automatically cut off.   When she did get through she was brushed off with all sorts of excuses, for instance, no instructions could be found on the computer or the hotel was fully booked.  Instead, she was told to pay more for accommodation in another hotel. 

Since the complainant failed to enjoy the service, she then sought assistance from the Council.  According to the document provided by the complainant, her payment to Company A was made to an account located in Guangzhou.  The Council has written to the company at an address in a commercial building in Hong Kong but the letters were returned, and attempts to make contact via email or telephone were also to no avail.

Case 2: Alleged coercion in membership renewal demand – murky company background

The complainant received a call from a telemarketing staff claiming to represent a hotel group and informing her that the travel membership she bought 5 years ago had expired and was automatically renewed.  Should she wish to withdraw from the membership, she would first have to pay a renewal fee of $2,688.  The staff further threatened that if she refused to pay up, the sum would snowball into a bigger debt and the company would send people to collect the money at her home.  Though the caller was unable to produce documentary proof of her membership, she was in possession of personal information to verify the complainant’s name, address and credit card number, etc.  Further, the complainant was told, upon membership renewal she would receive 4 coupons of the hotel in Macau, 8 buffet vouchers, and preferential hotel vouchers in Southeast Asia.  The complainant felt no choice but to pay finally while indicating that she would cancel her membership afterwards. 

Later, the complainant received a membership letter from a Company B affirming her request for cancellation and also indicating no further renewal of the membership would be demanded after 1 year.  However, the number of hotel vouchers and coupons provided did not match falling short of what she was originally promised by the staff.  As the complainant was unable to contact Company B and there was no online information about the company, her complaint to the Council was referred to its counterpart in Macau which found that the company in question was not registered in Macau.  On the consent of the complainant, the Council has referred her case to the Police and the C&ED for further investigation.

Case 3: Sales claims at variance with contract – redress difficult for payment to non-HK account

The complainant was approached over the phone about a $2,688 hotel and dining membership, comprising 2 nights in a hotel room with a high luxury view and lunch buffet for 4 persons; he further received a short message text confirming that the hotel accommodation was available at any time throughout the whole year including peak seasons and public holidays.  After purchase, the complainant received a letter issued by a Company C and only then did he find that the membership had in fact many restrictions, for instance, hotel accommodation availability was limited to Sundays to Thursdays, government tax was applicable when checking in, surcharges would be imposed during peak seasons – clearly contrary to what the salesperson had offered in the text message.  Immediately the complainant applied to the credit card issuing bank to hold the payment in dispute, but learned that the account of Company C was opened in the Mainland.  The complainant deemed such trade practice undesirable, and reported the matter to the C&ED and the Council; the case has since been referred to the Police for investigation.

Consumers receiving telemarketing calls on hotel and dining membership should pay heed to the following:

Upon receiving the call

  • Should you become interested in what mentioned in the sales pitches, find out first the name of the company, telephone number and trading address;
  • If the caller refuses to give such information of the trader or you doubt the veracity of the information given, do not rush into the transaction in a hurry;
  • Never disclose your credit card number or verify your personal and credit card information to people you hardly know; and
  • If for whatever reasons the salesperson claims he has the right to collect money from you, terminate the conversation right away.

Prior to the purchase

  • Verify if the company is registered in Hong Kong;
  • Contact the hotel concerned directly to ascertain if the company is appointed as its marketing agent of hotel and dining membership;
  • Pay attention to the various membership restrictions, for instance, no membership cancellation or transfer, the black-out dates or surcharges for certain services, as well as terms and conditions governing the cancellation of pre-booked services;
  • Make reference and compare the prices offered by travel agents or online hotel booking platforms before deciding whether the membership offered really meets your needs and requirements; and
  • Regularly check your monthly credit card statement; if any unusual or unauthorised transaction is found, immediately notify the card issuer of the sum in dispute, and apply for redress under its refund mechanism.  

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