Trade Descriptions Ordinance

Trade Descriptions Ordinance

The Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 (the Ordinance), which aims to provide greater protection for consumers by extending its coverage from goods to services and specified unfair trade practices, has already come into effect on 19 July 2013.

The Customs and Excise Department (C&ED) is the principal agency responsible for enforcing the Ordinance. Concurrent jurisdiction is conferred on the Communications Authority (CA) to enforce the fair trading sections in the Ordinance in relation to the commercial practices of licensees under the Telecommunications Ordinance and the Broadcasting Ordinance that are directly connected with the provision of telecommunications services or broadcasting services. The Ordinance prohibits specified unfair trade practices that might be deployed against consumers. The HKSAR Government is committed to protecting consumers' legitimate rights and establishing an effective regime where consumers and businesses can trade fairly with confidence.

The Money Service Operators should comply with the fair trading sections of the Ordinance in the course of their business to build up goodwill and avoid any violations. As consumers, members of the public are encouraged to better understand the unfair trade practices and the protection they are entitled to under the law in order to shop with peace of mind.

Under the amended legislation, the following six types of unscrupulous trade practices will be prohibited:

1. Apply false trade descriptions of goods and services;
Don’t give any false or misleading product information to consumers. If traders are uncertain of the uthfulness of any product information, they should verify it and should not provide it to the consumers impetuously.
2. Misleading omissions;
Traders run the risk of misleading omissions if they fail to give consumers sufficient material information about the product that is necessary for them to make an informed transactional decision.
3. Aggressive commercial practices;
Traders must not use harassment, coercion, and undue influence to restrict or impair the freedom of choice or conduct of consumers, which will cause or likely cause consumers to make a transactional decision that would not have been made otherwise.
4. Bait advertising;
When advertising products at a specified price, traders should ensure that the products are available for a reasonable period and in quantities that are reasonable.
5. Bait and switch; and
Traders must not make an invitation to purchase a product at a specified price and then refuse to show or demonstrate the product, refuse to take orders for the product, or demonstrate a defective sample of the product, with the intention of promoting a different product.
6. Wrongly accepting payment.
A trader must not accept payments for a product if at the time of accepting the payments, he does not intend to supply it or intends to supply another materially different product, or if there are no reasonable grounds for believing that he will be able to supply the product at the agreed time or within a reasonable time.

On enforcement, the Enforcement Agencies set investigation priorities to deal with cases under the Ordinance by taking into account the identified risks, the complaints received and making the best use of enforcement resources. Generally speaking, a higher priority is accorded to a case involving conduct that has significant public interests or concerns, a repeated and intentional conduct engaged by a trader or a trading industry, or conduct that causes significant financial loss to the consumers.

In addition, a civil compliance-based mechanism is introduced to encourage compliance by traders and stop identified unfair trade practices expeditiously. Under the mechanism, the Enforcement Agencies may, with the consent of the Secretary for Justice, accept a trader's undertaking as an alternative to prosecution. Where necessary, the Enforcement Agencies may also seek injunctions from a court of law to order a trader not to continue or repeat the contravening conduct.

Any person who wishes to make a report on violations of the Ordinance may call the Customs hotline 2545 6182. For report on telecommunications and broadcasting services, the public can call the Office of the Communications Authority hotline at 2961 6333.

Presentation File of Briefing Materials on Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 for consultative and briefing sessions (Source: HKC&ED)
Chapter 362:Trade Descriptions Ordinance
Enforcement Guidelines for the Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 (July 2013)

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