New consumer protection laws came into effect in Hong Kong on 19 July 2013. The new laws amend the Trade Descriptions Ordinance (TDO) which prohibit a range of unscrupulous trade practices in respect of goods and services (previously the TDO had only applied to goods).
Under the amended TDO, it is a criminal offence to engage in any of the following practices:
- false trade descriptions;
- misleading omissions;
- aggressive commercial practices;
- bait advertising;
- bait and switch; and
- wrongly accepting payment.
While undertakings may be accepted for less egregious conduct, the maximum penalty for breaching the provisions is:
- on conviction on indictment, a fine of HKD 500,000 and imprisonment for five years; and
- on summary conviction, a fine of HKD 100,000 and imprisonment for six months.
In a press release issued last week, the Customs and Excise Department (C&ED) stated that “The Government is committed to protecting consumers’ legitimate rights and establishing an effective regime where consumers and businesses can trade fairly and with confidence”. The C&ED is the principal agency responsible for enforcing the TDO and has released Enforcement Guidelines to assist consumers and businesses to understand their rights and obligations under the amended TDO.
Hong Kong’s service industry has been busily preparing for the implementation of the new laws. The South China Morning post reports that supermarket chain Wellcome changed its price tags to read ‘standard price’ instead of ‘original price’, as the Guidelines state that ‘original price’ can only be used if the price has been applied to the product for a reasonable period of time. The Hair and Beauty Merchants Association of Hong Kong has also advised its members not to exaggerate treatment effects and make clear that the effectiveness of a product may vary for different people.
There has certainly been a lot of change in the competition and consumer protection space in Hong Kong recently, with the approval of the country’s first substantive competition law regime last year (see our previous post) and further steps being taken to establish the regime this year (see our previous post).
