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Following is a question by the Hon Paul Tse and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (April 22):
Question:
This Council passed the amendments to the Trade Descriptions Ordinance (Cap. 362) (the Ordinance) in 2012, and the relevant amendments provided for new offences relating to unfair trade practices e.g. "aggressive commercial practices" engaged in by traders. Earlier on, three persons were convicted by the Court for engaging in "aggressive commercial practices" in the course of selling body care therapy services and they were sentenced to imprisonment, which was the first case under this offence. It has been reported that a member of the public received a telephone call from a person claiming to be a bank staff and demanding him to make immediate and full repayment of his bank mortgage loan. That person also said that he could assist the member of the public in applying for another loan at a low interest rate so as to charge him a handling fee of $100,000-odd. In addition, an owner of a flat under the Tenants Purchase Scheme received a warning letter using letterhead bearing a logo similar to that of the Hong Kong Housing Authority, in which he was told that because he had contravened the Housing Ordinance (Cap. 283) for obtaining an unlawful loan, he might be liable to prosecution and his flat might be repossessed. He was further told that a loan could be offered to him to help him restructure his debts. Some people who have been so harassed indicated to me that even though they did not take out any loan in the end, the intermediaries still sought to extort intermediary charges from them through debt collection agencies by threatening to harass their family members. These people have enquired with me whether the authorities may invoke the amended Ordinance to prosecute the relevant persons and their employers. In this connection, will the Government inform this Council:
(1) of the respective numbers of cases received by the Police, the Consumer Council and the Customs and Excise Department since the sections of the amended Ordinance relating to the aforesaid new offences came into operation in July 2013, in which duping, coercion, bait and even unlawful detention were adopted as the means to sell property mortgages and property re-financing, and how the relevant authorities have followed up such cases;
(2) whether it has studied the feasibility of invoking the amended Ordinance to prosecute the persons involved in the aforesaid cases and their employers; if so, of the outcome; if not, the reasons for that; and
(3) given the continuous soaring of property prices in recent months and the repeated occurrence of cases in which members of the public were harassed by intermediaries engaging in second property mortgages, of the advice that the authorities can offer members of the public on what they should do when they encounter harassment from intermediaries engaging in second property mortgage business; whether the Police, the Customs and Excise Department, the Hong Kong Monetary Authority and the Consumer Council will study the establishment of a dedicated handling mechanism, an inter-departmental/organisational handling mechanism, or a telephone hotline for offering assistance to helpless members of the public who are subjected to threats and harassment; if so, of the details; if not, the reasons for that?
Reply:
President,
The Trade Descriptions Ordinance (Cap. 362) (TDO), as amended by the Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012, came into full operation on July 19, 2013. The amended TDO tackles common unfair trade practices at source, including prohibiting traders (Note) from applying false trade descriptions in relation to goods and services and engaging in aggressive commercial practices, etc. The Customs and Excise Department (C&ED) is the main enforcement agency of the TDO.
Under section 7A of the TDO, a trader who applies a false trade description to a service supplied or offered to be supplied to a consumer; or supplies or offers to supply to a consumer a service to which a false trade description is applied, commits an offence.
Under section 13F of the TDO, a trader who engages in relation to a consumer in a commercial practice that is aggressive commits an offence. A commercial practice is aggressive if, in its factual context, taking account of all of its features and circumstances, it significantly impairs or is likely significantly to impair the average consumer's freedom of choice or conduct in relation to the product concerned through the use of harassment, coercion or undue influence; and it therefore causes or is likely to cause the consumer to make a transactional decision that the consumer would not have made otherwise.
Meanwhile, under section 30(1) of the Money Lenders Ordinance (Cap.163), a person shall not, by any false, misleading or deceptive statement, representation or promise, or by any dishonest concealment of material facts, fraudulently induce or attempt to induce any person to borrow money from a money lender. The Companies Registry is responsible for handling administrative matters related to the processing of licence applications and renewals. The Hong Kong Police Force (HKPF) is responsible for the enforcement of the Money Lenders Ordinance.
If the practices of a trader or an individual involve other criminal elements, HKPF may take enforcement actions in relation to the offence of criminal intimidation under the Crimes Ordinance (Cap. 200), the offences of fraud and blackmail under the Theft Ordinance (Cap. 210) or the offence of falsely pretending to be a public officer under the Summary Offences Ordinance (Cap. 228).
Our reply to the three parts of the question is as follows:
(1) The number and handling of complaints received from July 19, 2013 (the date on which the amended TDO came into full operation) to February 28, 2015 by C&ED involving aggressive commercial practices of financial companies providing property mortgage and property re-financing services, and by the Consumer Council involving sales practices and price disputes of financial companies providing property mortgage and property re-financing services, are set out at the Annex.
Separately, from July 2013 to February 2015, HKPF has handled 60 cases of loans-related offences. HKPF has not further categorised the cases by whether property mortgage and property re-financing services are involved.
(2) Every case is unique. Whether an offence under any individual ordinance is committed should be determined according to the facts and evidence of each case. A generalised conclusion cannot be drawn readily.
(3) As far as the enforcement of the TDO is concerned, C&ED will continue to monitor market trends and proactively deal with complaints, and will also maintain close liaison with other regulatory authorities in order to take appropriate enforcement or follow-up actions. HKPF is concerned about illegal money-lending practices and has taken enforcement actions on various occasions in recent years. HKPF will continue to take proactive actions to combat illegal money-lending practices.
The Government and related organisations have been, through different channels, reminding the public of the points to note when taking out loans. The Investor Education Centre (a dedicated organisation for enhancing the public's knowledge and skills in financial management), the Consumer Council and the Hong Kong Monetary Authority organise public education activities from time to time, reminding the public to understand thoroughly relevant terms and conditions (including those concerning interest rates and other fees and charges) before they enter into any loan agreements or financial contracts.
Note: The TDO does not apply to goods or services sold or supplied under the regulation of the Insurance Companies Ordinance (Cap.41), the Banking Ordinance (Cap.155), the Mandatory Provident Fund Schemes Ordinance (Cap.485) or the Securities and Futures Ordinance (Cap.571).
Ends/Wednesday, April 22, 2015
Issued at HKT 12:53
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