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Hong Kong cracks down on misleading sales tactics
Publication Date : 07-08-2013
Minerva Cheung, 28, has lost count of the number of times she has been taken in by misleading ads and sales tactics.
A shop window poster, for instance, that screams "up to 60 per cent off" when only a few items, if any, offer that discount.
Or supermarket items bearing "original price" and "actual price" tags, giving the impression that prices have been slashed when, in fact, the original price was simply inflated.
Or the "free" peanuts that are added to diners' bills.
"I felt so cheated," Cheung, a nurse, says, recalling how she once bought a second piece of clothing to qualify for an extra discount only to find out it applied to original-price items.
No more. New changes to a law that took effect last month now ban such unsavoury sales tactics.
Consumers like Cheung will also have recourse against errant business operators, who face a fine of up to HK$500,000 (US$64,463) and five years in jail. The court can order businesses to pay compensation. The consumer can also start civil action.
Hong Kong's Trade Description Ordinance prohibits false or misleading sales descriptions in all forms, including in advertisements and display notices.
So, a shop that advertises discounts of "up to 60 per cent" should ensure that at least 10 per cent of its products offer the maximum discount.The law also bans the use of testimonials from celebrities who have not used the product or service.
The new rules have been welcomed in Hong Kong - a shopping paradise with its diversity of offerings, but where competition has led vendors to use dishonest tactics to entice consumers.
The Consumer Council, a statutory body that advocates consumer rights, received more than 27,000 complaints last year.
In the three weeks since the law took effect, retailers and other businesses have scrambled to scrub up their promotional materials and display information to comply with the new rules.
Cathay Pacific, which used to advertise ticket prices with just a footnote on taxes and surcharges - a practice that made its tickets seem cheaper than rivals' - told The Straits Times that its new ads will provide the "approximate amount of taxes and surcharges".
A popular chain of tuition centres, Modern Education, spent nearly HK$100,000 to print new brochures. It used to trumpet its tutors as "kings" and "queens" in their respective fields.
"Now, we call them 'King of Maths or English' in Modern Education," says marketing director Desmond Mak.
The Customs and Excise Department, which is enforcing the new law, has 140 officers conducting undercover operations.
But grey areas remain. For instance, supermarket chain Wellcome changed the term "original price" on its price tags to "standard price".
Modern Education, which used to advertise one of its English tutors with a master's degree as having the "highest qualifications", has since changed it to "strongest qualifications".
"It is less quantifiable, so I think we should be okay," says Mak, although he admits he is not entirely sure it is permissible.
A Customs and Excise Department spokesman said that such assertions need "to be supported" but added that they will be assessed on a case-by-case basis.
The department and the council have received 258 complaints since the new rules came into effect. They are currently being investigated.
US$1 = HK$7.76