The Consumer Council has named and shamed Great Time Universal (HK), a time-share marketing company, for using high-pressure tactics to sell South Korea time-share holiday club memberships.
The watchdog said the memberships allow members to reserve a room in designated resorts or hotels, usually one week per year.
Membership fees vary by types of accommodation and the length of membership, which can be up to 50 years.
But the council said consumers did not know that reservations could only be made after completion of full membership payments, which range from HK$50,000 to HK$100,000. That makes it much more expensive than if they booked the rooms by themselves.
The council received 48 complaints against the Tsim Sha Tsui-based Great Time between January and August, up from 11 cases in the same period last year. There have been 75 complaints since 2015 involving some HK$2.7 million.
The watchdog said the company typically used cold calls and asked potential clients to respond to a survey, saying they would receive a free gift - usually a five-day vacation resort coupon - to lure them to its office. They were also told they would receive the gift after listening to a 90-minute talk. But the clients were taken to a room filled with loud music and heavy beats to listen a 90-minute sales promotion.
Consumer Council chief executive Gilly Wong Fung-han said the firm then used high-pressure sales tactics to make the consumers sign contracts - otherwise they were not allowed to leave.
The company also asked the clients to switch off their phones, surrender their identity and credit cards for registration of the free gift. Wong said they were kept in the office for two to five hours, until very late in the night or even past midnight, until they were worn out and incapable of making rational decisions.
One complainant said after he had finished paying off all monthly installments on his first HK$80,000 contract, he was forced to commit to a further HK$100,000 premium plan.
The council has referred 10 cases to the Customs and Excise Department for further investigation of suspected violations of the Trade Descriptions Ordinance.
Reporters visited the company's office in Star House yesterday, but it was closed.