V. The Trade Descriptions Ordinance
Some tricky sellers may provide wrong information to mislead their customers. The Trade Descriptions Ordinance , Chapter 362 , Laws of Hong Kong (“TDO”), prohibits false trade descriptions for goods ( section 7 ) and services ( section 7A ).
A. False Trade Description in relation to goods
Any person who in the course of any trade or business:
- applies a false trade description to any goods;
- supplies or offers to supply any goods to which a false trade description is applied; or
- has in his possession for sale or for any purpose of trade or manufacture any goods to which a false trade description is applied
commits an offence.
1. Gold or Platinum articles
There are also regulations under the TDO dealing specifically with gold and platinum articles.
Under the Trade Descriptions (Marking) (Gold and Gold Alloy) Order ( Cap. 362A ) and Trade Descriptions (Marking) (Platinum) Orders ( Cap. 362C ), all articles made of gold, gold alloy, or platinum must bear a mark indicating the fineness of gold or platinum content in the form and manner specified. Articles made of different parts of gold or platinum of different fineness, or partly of gold or platinum and partly of other metal must also be clearly marked as such.
Under section 2 of the Trade Descriptions (Place of Origin) (Watches) Order ( Cap. 362D ), the place in which the movement of a watch (i.e. the main part of a watch without the watch band) was manufactured or produced is to be regarded as the place in which the watch has been manufactured or produced. However, this requirement does not apply to any watch that has been exported, or is intended to be exported, from Hong Kong to the Mainland under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) and that is qualified for a zero tariff under the Arrangement.
3. Food and Drugs
Schedule 3 of the Food and Drugs (Composition and Labelling) Regulations ( Cap. 132W ) states that unless there is exemption in the Regulations or otherwise stated, the following information should be marked in either English or Chinese language or in both languages on the label of pre-packaged food:
- name of the food;
- list of ingredients;
- indication of “use by” or “best before” date;
- statement of special conditions for storage or instructions for use;
- name and address of manufacturer or packer;
- count, weight or volume of food.
If Chinese and English languages are used in labelling, the food name and the ingredient list of the pre-packaged food shall be labelled in both languages.
Regulation 4A of the Food and Drugs (Composition and Labelling) Regulations ( Cap. 132W ) provides that prepackaged food shall be marked and labelled in the manner prescribed in Schedule 3 . The items listed in Schedule 4 are exempt from the requirements of this regulation to the extent specified in that Schedule.
Schedule 3 states the requirement of “Count, weight or volume” in Paragraph 7 and the appropriate language in Paragraph 8.
Regulation 4B provides that prepackaged food shall be marked or labelled with its energy value and nutrient content in compliance with Part 1 of Schedule 5 .
Items exempt from Part 1 of Schedule 5 are listed under Schedule 6 .
Any person who advertises for sale, sells or manufactures for sale any prepackaged food which –
(a) is not marked or labelled in compliance with regulation 4A(1) or 4B(1) ; or
(b) has on its label any nutrition claim that does not conform to regulation 4B(5) , commits an offence and is liable to a fine at level 5 ( Criminal Procedure Ordinance ( Cap. 221 ) – Schedule 8 ) and to imprisonment for 6 months.
Schedule 7 provides for the nutrient reference values for different nutrients for the purpose of nutrition labelling and Schedule 8 states the conditions for nutrient content claim.
B. False Trade Description in relation to services
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.
A trader who adopts “Unfair Trade Practices” commits an offence. There are five kinds of “Unfair Trade Practices” outlined under Part IIB of the TDO .
Section 13E Misleading Omissions
A commercial practice is a misleading omission if it:
- omits / hides / provides unclear, unintelligible, ambiguous or untimely material information;
- fails to identify its commercial intent; or
- causes the average consumer to make a transactional decision that he would not have made otherwise.
Section13F : Aggressive Commercial Practices
A commercial practice is aggressive if:
- it significantly impairs the average consumer’s freedom of choice or conduct through the use of harassment, coercion or undue influence; and
- causes the consumer to make a transactional decision that he would not have made otherwise.
Section 13G : Bait Advertising
Having regard to the nature of the market in which the trader carries on business and the nature of the advertisement, it is considered bait advertising if:
- there are no reasonable grounds for believing that the trader will be able to offer for supply a product at the price that has been advertised, or
- the trader fails to offer for supply the product advertised at that price for a reasonable period and in reasonable quantities.
It is not bait advertising if:
- the advertisement states clearly how long the offer lasts or the quantity offered for supply at the advertised price; and
- the trader offers the product for supply at that price or for that period and in that quantity.
Section 13H : Bait and Switch
A trader who makes an invitation to purchase a product at a specified price with the intention of promoting a different product and:
- refuses to show or demonstrate the product to consumers;
- refuses to take orders for the product or deliver it within a reasonable time; or
- shows or demonstrates a defective sample of the product
commits an offence.
Section 13I : Wrongly Accepting Payment
A trader wrongly accepts payment if at the time of acceptance:
- he intends not to supply the product;
- he intends to supply a product that is materially different; or
- there are no reasonable grounds for believing that the trader will be able to supply the product:
- within the period specified by the trader at or before the time at which the payment or other consideration is accepted; or
- if no period is specified at or before that time, within a reasonable period.
C. Enforcement Guidelines
The Commissioner of Customs and Excise is the principal Enforcement Agency to determine whether the trade practices are unfair by reference to the Enforcement Guidelines. For trade practices relating to telecommunications and broadcasting, the Enforcement Agency is the Communications Authority ( sections 16BA and 16H ).
The Enforcement Guidelines cannot and do not aim to mandate traders to conduct their business in a particular way. They serve as a guide as to when conduct may constitute a contravention of the fair trading sections of the TDO .
The Guidelines are neither legally binding nor subsidiary legislation. Traders do not incur any civil or criminal liability by contravening any part of the Guidelines.
Rather than criminal proceedings, section 30L provides that the Enforcement Agencies may resolve cases in respect of conduct that constitutes an offence under specified sections by accepting a written undertaking from alleged trader if the trader undertakes not to continue/repeat/engage in conduct or commercial practice of the kind or of a substantially similar kind of concern. Acceptance or withdrawal of the undertaking is subject to the consent in writing by the Secretary for Justice. If an undertaking is accepted, the enforcement agency may not commence/continue the investigation or bring/continue the proceedings in court. The enforcement agency may also publish the accepted undertaking.
The Enforcement Agencies may apply to the court for an injunction to order a trader not to continue or repeat or engage in the contravening conduct (see sections 30P and 30Q ).
The Enforcement Agencies are more likely to institute criminal proceedings rather than seeking an undertaking in cases of serious contravention of the fair trading sections of the TDO . Factors (which are non-exhaustive) to be considered are:
- whether the conduct continues over a long period of time or involves a series of contraventions against the same victim or same group of victims;
- the number of victims and amount of financial loss or other detriment suffered or likely to be suffered by the victim(s);
- whether the conduct was fabricated, with prior planning;
- whether the victims are particularly vulnerable;
- the prevalence of the conduct and its impact on the community, including the risk posed to public health and safety, or to the environment;
- whether there are elements in the conduct which caused or are likely to cause harassment, anxiety or distress to the victims;
- any attempt by the trader to conceal his identity, whether directly or indirectly, such that the Enforcement Agency or the victims (or both) cannot easily identify or trace the trader;
- lack of remorse;
- the trader’s compliance history and conviction record(s); and
- whether the trader has obstructed the Enforcement Agency in taking lawful action during an investigation.
For the full content of the Enforcement Guidelines, please click here .