The Consumer Council today (December 20) named a company which markets a discount dining membership scheme for engaging persistently in misleading practices detrimental to consumer interests.
In the past three months alone, between September and November, the Council has received a total of 13 consumer complaints involving $9,450 seeking redress from the company.
The company operates a discount dining scheme and sells to consumers for a fee a club membership to dining at restaurants participating in the scheme.
The Council has formally warned the company, verbally on July 21 which was subsequently confirmed in a warning letter in the same month, to immediately cease and desist from engaging in misleading practices.
Despite these warnings, consumer complaints totaling 13 cases were leveled against the company. Under the circumstances, the Council has decided to sanction the company by publicly exposing its name and address to alert the public to such malpractices.
The company was identified at a press conference as: the Gourmet Club operated by On Sky Holdings Limited with registered office at Unit 902, Tower 2, Cheung Sha Wan Plaza, 833 Cheung Sha Wan Road, Kowloon, Hong Kong.
According to the complainants, they were approached by telephone by salesmen of the club who allegedly used misleading practices to lure them into joining the scheme.
The misleading practices were related to (a) the actual sum of membership fee charged to credit card accounts of clients without proper notification, (b) actual discount offers of participating restaurants, and (c) the right to cancellation of membership.
The complainants alleged that they only reluctantly agreed to join the club after being persuaded that the membership fee would only be as little as $17 to $20 to be paid monthly.
However, after joining the club, they were quickly charged a lump sum of $600 (for one person) and $700 (for two) for a three-year membership without their consent through their credit card accounts.
A total of eight cases involving $5,850 was received in relation to this category of malpractices against the company.
Some complainants alleged that the salesmen of the club grossly exaggerated the extent of the discounts offered by the restaurants participating in the scheme.
In one typical case, the complainant was assured that most restaurants in the scheme would offer 50% discount to the club members. But as it turned out, when the complainant patronized these restaurants, the discounts allowed ranged from only 10% to 15%, falling far short of the original promise.
In another case, the complainant after being persuaded to join the club on the promise that the complainant could enjoy 50% discount at most of the restaurants, received later in the mail the club brochure revealing that such discount was applicable to only some specified restaurants and for only specified set menu.
There was a total of four cases involving $2,900 in this category of complaints.
One complainant alleged that although he was assured that he could cancel the membership after joining the club. But when he sought to withdraw from the scheme, he was told that the 3-year membership fee was non-refundable.
The case involved $700 in this category of misleading practices related to membership cancellation.
Upon mediation of the Council, the company had previously settled some of the complaint cases by refund.
But complaints continued to arise even after formal warnings were issued by the Council to the company.
The Council has therefore decided to impose this publicity sanction against the company to deter such malpractices and protect the interests of consumers.
Chairing the press conference today (December 20) is the Chairman of Trade Practices Committee, Dr. LO Chi-keung.