Speeches and Presentations




LCQ7: Unscrupulous business practices of some ginseng and dried seafood shops

Following is a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, to a question by the Hon Wong Ting-kwong in the Legislative Council today (February 15):

Question:

Last year, the Consumer Council received 305 complaints against ginseng and dried seafood shops which deceived customers with unscrupulous practices, representing an increase of 34% over the figure of the previous year. Among such complaints, the number of cases which involved misleading indication of unit price also surged by 88% from 117 to 220, with 85% of the complainants being mainland tourists visiting Hong Kong, and it has been learnt that the shops being complained against are mainly located in tourist areas. In this connection, will the Government inform this Council:

(a) given that there are clear regulation and penalties in the Trade Descriptions Ordinance (Cap. 362) (the Ordinance) regarding a retailer's display of a sign to indicate the price of goods, yet the number of complaints about misleading indication of unit price is still increasing with a significant surge of nearly 90% instead of decreasing, whether it knows the reasons for that;

(b) of the inspections conducted and enforcement actions taken by the Customs and Excise Department in relation to the Ordinance in the past three years; whether it will step up efforts in conducting inspections in response to the increase in complaints; if it will, of the details; if not, the reasons for that; and

(c) focusing on the problem of unclear units of quantity, whether the authorities have plans to strengthen education for shop operators, the public and tourists in this regard, and publicise that unit prices must be displayed clearly as required by the relevant legislation; if they have, of the detailed contents of such plans; if not, the reasons for that?

Reply:

President,

Pursuant to section 7 of the Trade Descriptions Ordinance (Cap. 362) (the Ordinance), any person who, in the course of any trade, applies a false trade description (such as composition, weight, place of manufacture, etc.) to any goods commits an offence. Section 13A of the Ordinance also provides that any person who, without reasonable excuse, displays in the course of any trade, a sign which indicates a price set by reference to any unit of quantity for any goods that are exposed for sale but fails to indicate the price per unit of quantity in a readily comprehensible manner (as known as "confusing price units") commits an offence. Offenders are liable to a maximum fine of $500,000 and imprisonment of five years. The Customs and Excise Department (C&ED) is responsible for the enforcement of the Ordinance.

My reply to the various parts of the question is as follows:

(a) According to the observation of the C&ED, since the commencement of the aforesaid section 13A in March 2009, price signs of ginseng and dried seafood traders have been displaying in a more readily comprehensive manner generally. We believe that the increase in number of complaints (and those involving tourists) is the result of our enhanced publicity and education as well as the enhanced knowledge among members of public and tourists about such kind of unscrupulous sales tactics, which have raised their vigilance and made them more willing to lodge complaints. It is also partly due to the fact that tourists have become the main target of such unscrupulous sales tactics in recent years.

(b) To ensure traders' compliance, the C&ED regularly patrols retail traders and deploys extra resources especially during long holidays in renowned shopping and tourist areas. The Department also deploys the Quick Response Team to handle urgent complaints about contravention of the Ordinance with a view to protecting the rights of consumers.

To enhance the effectiveness of enforcement, the C&ED has adopted a risk management mode by carrying out targeted spot checks against identified high-risk ginseng and dried seafood traders which were repeatedly complained against according to the risk profiling, seriousness of the problem and market situation. Taking into account the actual circumstances, the C&ED uses various methods to carry out inspection, including undercover test-purchases as well as high-profile patrols against retail traders in shopping areas and trade fairs to raise public awareness and as part of the education effort. Moreover, even if no discrepancy is found during the inspection, staff of C&ED will repeatedly remind the traders of the principle of fair trade to ensure their compliance and for education purpose. It has also enhanced the co-operation and intelligence exchange mechanism regarding complaints received with the Hong Kong Police Force, the Consumer Council (CC), the Tourism Commission, the Travel Industry Council of Hong Kong (TIC) and the Hong Kong Tourism Board, as well as to arrange large-scale joint operations with other enforcement agents.

The figures of patrols by the C&ED against traders of ginseng and dried seafood in the past three years are listed as follows:-

2009 2010 2011 Total Number
------ ------ ------ -----------------
Patrol 588 635 689 1,912
Prosecution 8 0 1 9

In January this year, the C&ED successfully prosecuted two hawkers selling dried abalones, who partially or completely obscured the unit quantity on the placards with objects to mislead consumers by confusing price unit during patrol of C&ED in late 2011. The two hawkers were convicted and fined $5,000 and $2,000 respectively by the Court, with the seized goods forfeited.

The C&ED will continue to monitor the market situation closely, and when necessary, step up enforcement operations against outrageous traders.

(c) The C&ED attaches great importance to publicity and education to traders, members of public and tourists. Apart from distributing pamphlets to the traders and consumers, the Department distributes pamphlets in English, and traditional/simplified Chinese characters, to tourists arriving at boundary control points so as to raise their awareness about the sales tactics of dishonest traders. Meanwhile, the C&ED promotes the message of consumer protection through mass media and the platform of the CC's homepage. Moreover, the C&ED from time to time organises educational seminars for various trade associations to enhance their understanding in compliance with the Ordinance. It also delivers talks to tourist guides registered under the TIC to raise their awareness and to deliver the message of consumers' rights to the tourists through them.

Furthermore, the CC reminds consumers of various deceptive sales tactics in its CHOICE Magazine from time to time. In the issue published in January this year, a dedicated article was issued focusing on the tactic of confusing price units in notorious ginseng and dried seafood shops. The CC has also uploaded the cases concerned onto its "ShopSmart" homepage which is set up for tourists from the Mainland to increase their awareness.

Wednesday, February 15, 2012


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