The Trade Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) (“TDO”), as amended by the Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012, prohibits common unfair trade practices deployed against consumers, including:
- false trade descriptions;
- misleading ommissions;
- aggressive commercial practices;
- bait advertising;
- bait-and-switch; and
- wrongly accepting payment
The maximum penalty upon conviction of the above offences is a fine of HK$500,000 and imprisonment for 5 years. The Customs and Excise Department (“C&ED”) is the principal enforcement agency of the TDO.
As an alternative to pursuing prosecution, the TDO provides for a civil compliance-based mechanism under which C&ED may, with the consent of the Secretary for Justice, accept an undertaking from a trader believed to have engaged, be engaging, or be likely to engage in conduct that constitutes any of the above offences. This undertaking is a commitment by the trader not to continue or repeat the conduct concerned, providing a means to encourage compliance and resolve infringements expeditiously.
In the case KCCC 1279 of 2014, a beauty parlor solicited consumers to purchase prepaid service plans without telling them that all existing clients and equipment would be taken over by another operator. Although the level and quality of service provided might not be affected in any way, such a piece of material information was essential for an average consumer to make informed transactional decisions. A director of the beauty parlor was convicted for engaging in commercial practice that was a misleading omission and was fined HK$4,000.