Customs combats unscrupulous trade practices under newly amended Trade Descriptions Ordinance

A spokesperson for the Customs and Excise Department (C&ED) said today (December 9) that the C&ED had accepted a written undertaking by a local education institution in accordance with the newly amended Trade Descriptions Ordinance (TDO). The undertaking is the first case since the implementation of the amended TDO.

The C&ED had earlier received a complaint about a false claim on the website of a local education institution, claiming that its graduates of a Higher Diploma in Hospitality Management course would be eligible for direct entry to the final year of a degree programme in local universities. The claim was suspected to be in contravention of the provisions regarding "false trade description" under the TDO.

Investigation by the C&ED revealed that graduates of the course could not be eligible for direct entry to the final year of a degree programme in local universities. Under caution, the education institution admitted that the claim made by the institution was false and misleading. It then signed a written undertaking in accordance with the TDO not to continue or repeat the above conduct; not to engage in conduct of that kind, or any conduct of a substantially similar kind, in the course of any trade or business; and also to ensure that its staff are provided with adequate training to better understand and comply with the fair trading provisions under the TDO. The written undertaking is valid for two years.

Before accepting the written undertaking, the C&ED fully considered the overall circumstances of the case, including the following:

1. the institution showed co-operation throughout the investigation;
2. it removed the false claim from its website immediately;
3. it had yet to receive any enrolment applications for the said course; and
4. under the "civil compliance-based mechanism", the written undertaking would encourage the institution concerned to comply with the law and that the relevant matters could be resolved more expeditiously.

According to the requirements of the TDO, the C&ED has obtained the written consent of the Secretary for Justice (SJ) to accept the written undertaking from the education institution. The undertaking has been uploaded to the C&ED's homepage
(www.customs.gov.hk/en/customs_notices/undertake/index.html)

If the institution breaches any terms of the undertaking, the C&ED might withdraw the acceptance of the undertaking pursuant to the TDO and commence an investigation and instigate legal proceedings.

The amended TDO came into effect on July 19 this year to prohibit unfair trade practices, including "applying false trade description to service". 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. The maximum penalty upon conviction is a fine of $500,000 and imprisonment for five years. The TDO states that the C&ED may, with the consent in writing of the SJ, accept a written undertaking given by the trader in question.

The C&ED closely monitors any violations of the TDO and will take appropriate enforcement actions once any trader is found to have employed unfair trade practices for the sale of goods and service.

Members of the public may report suspected violations of the TDO to the C&ED by calling the 24-hour hotline 2545 6182.

Ends/Monday, December 9, 2013