Cooling-off period on prepaid contracts wins wide support

Ayra Wang

More than 80 percent of people in Hong Kong support implementing a mandatory cooling-off period for prepaid consumption contracts, a recent survey reveals.

Bill Tang Ka-piu, who represents the Hong Kong Federation of Trade Unions in the Legislative Council, proposed a minimum cooling-off period of seven days.

The phone survey, conducted by the New Youth Forum in collaboration with Tang's office, took in 702 people aged 18 and above between September 17 and 30.

The findings indicated that 78.4 percent of the respondents feel that consumer protections for pre-paid service contracts are inadequate.

Additionally, more than 85 percent supported a statutory cooling-off period specifically for the beauty and fitness industries.

Tang said the benefits of a cooling-off period for both consumers and merchants are that it would enhance confidence in consumer protection among residents and tourists.

"With this period in place, consumers can cancel contracts if they change their minds without needing to file complaints with customs regarding unfair trade practices," he said.

Tang added that, without such a period, Customs and Excise Department officers may initiate criminal investigations, potentially leading to prosecution for the company and its sales representatives.

This initiative follows an uproar revolving around local gym chain Physical Fitness, after the site of its Wan Chai outlet reopened with a new investor soon after the chain's sudden temporary closure last month.

The survey indicated that more than 65 percent of respondents who had purchased prepaid services expressed concerns about consumer protection in light of this incident, while about 56 percent opposed a voluntary cooling-off period proposed by the sector.

Tang criticized the industry's self-regulation as impractical due to the absence of standard practices, saying that some merchants might create overly brief cooling-off periods or impose unauthorized thresholds that obstruct consumers' rights to cancel contracts.

The government had previously considered a statutory cooling-off period after completing a three-month public consultation in 2019 but abandoned the plan due to the social unrest and the pandemic.

Tang urged the administration to initiate legislative procedures promptly, recommending a cooling-off period of no less than seven days, as over 60 percent of survey participants favored a period of at least 14 days.

The survey revealed that more than 75 percent support instituting a maximum term limit for prepaid contracts, with over half backing an upper limit of one year.