In a bid to better protect consumers, the government launched a two-month public consultation on Monday to explore tighter regulations for prepaid beauty and fitness contracts.
The move follows a series of sudden closures among large chain fitness and beauty groups, which left many citizens facing significant financial losses.
Following a comprehensive review of the Trade Descriptions Ordinance (TDO), authorities reported that the beauty and fitness services industries accounted for nearly 90 percent among the industries with the highest tendency for improper selling tactics.
Alarmingly, most consumers were pressured into contracts of long duration involving substantial prepayments under aggressive commercial practices and persuasive selling tactics.
In response to these issues, the government is proposing a statutory seven-day cooling-off period for prepaid consumer contracts. This would be accompanied by a 14-calendar-day refund window, giving consumers ample time to reconsider their purchasing decisions without penalty.
Under the proposal, the government has set a regulatory threshold based on the contract amount, with three options: HK$3,000 or above, HK$8,000 or above, or HK$15,000 or above.
Additionally, a statutory two-year limit on contract duration has been suggested, along with a ban prohibiting traders from entering into contracts that take effect later than three months after signing.
To strengthen deterrence against unscrupulous traders, the government also proposes enhancing Customs and Excise's investigative and enforcement authority in cases of wrongful payment acceptance, including the ability to apply for court restraint orders over relevant assets.
Acknowledging widespread public concern regarding high-pressure sales tactics, a government spokesperson emphasized that the proposed measures are both targeted and proportionate, focusing specifically on the sectors most prone to improper selling and large prepaid agreements.
The public consultation period will run until August 29, with submissions accepted via email, fax, and post.
Separate consultation sessions are also planned specifically for the beauty and fitness industries to gather targeted feedback on the new policy proposals.
