Consumer Council swamped with complaints after Hotstone Yoga sudden closure

The Hong Kong hot stone yoga chain Hotstone Yoga, which operated at least five branches across the city, abruptly announced the closure of all its locations on Wednesday. 

Hong Kong's Consumer Council revealed on Friday that it had received 286 complaints regarding the sudden shutdown, with affected customers claiming total financial losses amounting to HK$3,909,444. 

Consumer Council representatives advised affected customers who paid for memberships or deposits using credit cards or other payment methods with chargeback mechanisms to contact their card-issuing banks immediately. 

Customers should inquire whether their transactions are covered by refund protections and submit chargeback requests as soon as possible. 

However, the watchdog warned that such protection schemes usually have strict application deadlines and might not cover transactions made through credit card installment plans.

For cases where a liquidator has been appointed, consumers have the option to register as creditors.

However, the council noted that under standard liquidation procedures, a company's remaining assets must first be used to pay off preferential creditors. 

These include employees, government bodies, and secured creditors. Consumers are classified as unsecured creditors and will only receive compensation if any funds remain after preferential claims are fully settled. 

The watchdog cautioned that if a business closes due to insolvency, the chances of consumers recovering their money are generally low.

In light of this incident, the council urged consumers to ensure that all service terms are clearly documented in writing when signing contracts, rather than relying on verbal agreements. 

Key clauses should include service cancellation policies, clear breakdowns of paid and outstanding amounts, and provisions for scenarios where the business fails to deliver services. 

Maintaining organized copies of all receipts, contracts, and payment records is also crucial, as these documents serve as vital evidence in the event of a dispute.

Affected customers can contact the Consumer Council for assistance. The watchdog added that it is aware of an active investigation by the Customs and Excise Department into the matter. 

Consumers who suspect the merchant engaged in unfair trade practices can report the company to Customs or ask the Consumer Council to refer their cases.

Meanwhile, Hotstone Yoga has issued a closure notice through its legal representatives. 

The firm stated that any individuals wishing to make claims against the company must submit their demands in writing by next Monday.

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