Council Meetings (Question): Unscrupulous Sales Practices of Fitness Centres (2016.07.13)

MR CHAN KIN-POR (in Chinese): President, it has been reported that the authorities have received from time to time complaints from members of the public against fitness centres, including their promotion of memberships and long-term fitness services contracts through high-pressure tactics. As revealed in the findings of a survey conducted earlier on, over 40% of the respondents indicated that they had been persuaded by staff members of fitness centres to purchase memberships, and among them, nearly 65% had been pressured by such staff members and thus felt unhappy, embarrassed or even frightened. In this connection, will the Government inform this Council:

(1) of the number of complaints, received by the authorities since the commencement of the Trade Descriptions Ordinance (TDO) (Cap. 362), about fitness centres using unscrupulous sales practices to promote their services, together with the number of prosecutions instituted against fitness centres or the persons concerned and the relevant offence provisions invoked; whether the authorities have carried out promotional and educational work to explain to staff members of fitness centres the contents of TDO and the criminal liabilities for illegal practices; if they have, of the number of talks or activities held; if not, the reasons for that;

(2) whether it has reviewed if TDO can effectively eradicate the adoption of the unscrupulous sales practices by staff members of fitness centre and reduce their opportunities of committing offences; if it has, of the details; if not, whether it will consider stepping up the regulation of fitness centres, such as, by establishing a regulatory body to implement a licensing regime for fitness centres and fitness coaches as well as to regulate the sales practices used by them, with a view to enhancing the transparency, professionalism and reputation of the services provided by fitness centres; if it will, of the details; if not, the reasons for that; and

(3) whether it has plans to step up publicity efforts to advise members of the public on how to deal with situations in which staff members of fitness centres use unscrupulous sales practices in persuading them to purchase services; whether it will step up its efforts in promoting to members of the public the fitness rooms under the management of the Leisure and Cultural Services Department, and procure additional fitness equipment for such fitness rooms to attract people to use them; if it will, of the details; if not, the reasons for that?

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, the Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 was passed by the Legislative Council in July 2012. The amended Trade Descriptions Ordinance (Cap. 362) (the Ordinance) prohibits some commonly seen unfair trade practices, including false trade descriptions of services, misleading omissions, aggressive commercial practices, bait-and-switch, bait advertising and wrongly accepting payment. Convicted traders are liable to a maximum penalty of imprisonment for five years and a fine of $500,000. Since the amended Ordinance came into operation in July 2013, the Customs and Excise Department (C&ED) has been adopting a three-pronged approach to implement the Ordinance, including promoting compliance among traders, actively handling complaints and taking enforcement actions, as well as conducting consumer education and publicity.

Having consulted the Home Affairs Bureau and the C&ED, my reply to the three parts of the question is as follows:

(1) Since July 2013, the C&ED has received, as at end of June this year, 519 complaints that involve “fitness and yoga services”. Together with the cases the C&ED proactively developed, the C&ED has conducted or has been conducting investigation on a total of 58 cases, leading to the arrest of 35 persons in relation to six cases suspected of “aggressive commercial practices” (offence under section 13F of the Ordinance). Apart from these ongoing arrest cases, the C&ED issued advisory letters to traders in another 24 cases. The remaining 28 cases have been closed after investigation due to insufficient evidence. Separately, in recent days, the C&ED received over 200 complaints which involve a chain of fitness centres that has suspended operation. The C&ED is actively processing these complaint cases. If any of these is suspected of contravention of the Ordinance, the C&ED would take appropriate enforcement actions. In connection with this case, on 11 July, the C&ED arrested two persons of this chain of fitness centres. The arrested persons are now on bail awaiting investigation.

Meanwhile, the C&ED is committed to promoting compliance among the fitness industry. In July 2013 and November 2015, the C&ED conducted seminars for about 600 participants from the industry. In May this year, the C&ED also convened a meeting with the management of several large-scale fitness centres to remind traders to comply with the law. Moreover, the C&ED has arranged to hold another seminar in end July this year for the fitness industry, with a view to strengthening understanding of the Ordinance by front-line staff and management of the industry.

(2) The amended Ordinance combats unscrupulous traders (including those in the fitness industry) at source. Law-enforcement agencies continued to make efforts in implementing the Ordinance through the three-pronged approach of compliance promotion, law enforcement and public education. These efforts will, on one hand, achieve a warning and deterrent effect against unscrupulous traders. On the other hand, consumers will be made much more aware of the need to protect themselves. The Government will continue to keep a close watch on the effectiveness of the Ordinance in combating unfair trade practices and continue to communicate with the business sector to encourage good trade practices.

As regards fitness coaches, the national sports association ― the Physical Fitness Association of Hong Kong, China ― promotes physical fitness and trains instructors in Hong Kong. The association organizes various training courses for fitness coaches, covering aerobic dance, resistance training, hydro-fitness, elderly fitness and stretching training, with a view to enhancing their professional standards. At present, there are over 1 000 coaches who are qualified with the relevant professional certification. The association also maintains a list of coaches for reference by interested members of the public.

(3) The purchase of club memberships from traders is often in a form of pre-payment, and traders are usually willing to offer price advantages or discounts to consumers who make pre-payment. As in the case of other transactions, consumers should not only take into account the discounts offered by the trader, they should also carefully consider their own needs, the terms and conditions of the purchase and the risks involved. The Consumer Council will continue to promote “smart consumption” through its publicity and public education efforts. Consumers who have doubts about the transactions should ask for more details from traders or refuse the transactions. Consumers who feel aggrieved after their transactions may seek help from relevant agencies.

The Leisure and Cultural Services Department (LCSD) currently manages 73 fitness rooms across the territory. Qualified individuals aged 15 or above may register as a user of the LCSD fitness rooms and hire fitness equipment. The Government has been publicizing the fitness rooms, which are widely popular with over 4.47 million visits received in 2015. Facilities in fitness rooms are renewed from time to time to meet the needs of fitness room users.

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