Retailing, Franchising, and Consumerism Business Intelligence in China

New Hong Kong Law Outlaws Unscrupulous Retail Activities

A new law becomes effective today in Hong Kong that can help stop dishonest retail practices and better protect the interests of consumers.

Marcus Lau, the head of Trade Descriptions and Transhipment Controls Bureau of the Customs and Excise Department, stated last week that the Trade Descriptions Ordinance (Amendment) 2008 and its eight pieces of related subsidiary legislation will also help visitors to Hong Kong.

Four types of unscrupulous practices are prohibited in the law. First, making false representations regarding after-sale services and warranties for goods is prohibited. Next, retailers are prohibited from giving misleading, unclear or incomplete information as to the price of the goods set by reference to a unit of quantity. Third, giving misleading price indication for electronic products is illegal. Finally, making false or misleading representation regarding a retailer's connection with or endorsement by individuals or bodies of good standing and reputation is now outlawed.

Retail shops selling five types of regulated electronic products — digital audio players such as MP3 players, digital camcorders, digital cameras, mobile phones and portable multimedia players — have to issue to the buyers invoices or receipts containing the prescribed product information, including details of after-sale services.

To encourage reporting of dishonest retailing activities, the department will work closely with Hong Kong's Consumer Council and the Travel Industry Council. Under the Trade Descriptions Ordinance, retailers employing a deceptive trade practice in the course of business are subject to the maximum penalty of a fine of HKD500,000 and imprisonment for five years.

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