Date
19 October 2017
Consumer Council chief executive Gilly Wong (inset, right) explains the high-pressure tactics employed by the marketing firm to force customers to sign the contract. Photo: HKEJ
Consumer Council chief executive Gilly Wong (inset, right) explains the high-pressure tactics employed by the marketing firm to force customers to sign the contract. Photo: HKEJ

Time-share firm ‘named and shamed’ over sales malpractices

The Consumer Council has “named and shamed” a time-sharing marketing company allegedly engaged in high-pressure sales tactics, in a bid to warn the public and discourage similar malpractices.

The watchdog said the company was selling time-share membership on behalf of a vacation club in South Korea, under the name Great Time Universal (HK), the Hong Kong Economic Journal reports.

At least 75 complaints, involving sales contracts amounting to around HK$2.7 million, have been filed against the marketing firm, which has been accused of engaging in unfair trade practices including the use of misleading and high-pressure sales techniques, unfair terms that provide disproportionate advantage to the seller, and charging different types of fees, the council said.

Gilly Wong Fung-han, the council’s chief executive, said the company’s staff used extremely aggressive sales techniques that left the prospective buyers completely worn out, and as a result, the victims simply gave in and signed the contracts before they were allowed to leave the company premises.

The company’s staff, while making the sales pitch, instructed prospective buyers to switch off their mobile phones and surrender their identity and credit cards under the pretext of registering their names in order for them to receive free gifts, Wong said.

The council has referred 10 of the cases to the Customs and Excise Department for further investigation of suspected violation of the Trade Descriptions Ordinance.

The complaints against the company accounted for 75 percent of the 100 cases filed with the council since 2015 against the time-share service sector in Hong Kong.

In the first eight months of this year alone, the council received 48 cases against the company, a four-fold increase from the 11 cases during the same period last year.

According to the council, a customer buying a membership worth HK$60,000 and paying a monthly installment of HK$500 will have to wait 10 years, and has to pay US$380 as club fee before the first time-share vacation – a one-week accommodation in a resort – could be redeemed.

In one extreme case, a customer was made to pay monthly installments as little as HK$100 to HK$500, but over a period of 17 years ending 2035.

A clause in the contract stipulates that buyers may cancel the contract during a cooling-off period of three days, but they have to pay an administrative fee amounting to 25 or 30 percent of the total membership fee.

Another clause in the contract states that the company will guarantee the availability of a time-share room only if a member makes a reservation two years in advance. A full refund of the annual club fee will be made, otherwise.

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JC/BN/CG

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