Hong Kong business

Now that's what I call sneaky

The Standard reports that consumers are not happy with pay-TV companies.  Tell me something I don't know!

Pay-television and telecommunication services top the Consumer Council's complaints list for last year. Out of a total of 35,962 complaints received last year, 11,801 and 2,922 were about telecom and broadcasting services, respectively.  While the number of complaints against telecom services fell slightly, complaints about broadcasting services rose by 32 percent - from 2,211 in 2005 to 2,922 last year.

Council chairman Chan Ka-keung said Thursday he was happy to see a small drop of 2 percent in complaints from consumers and tourists - the first decrease since 1999. The 35,962 complaints last year compare with 36,614 cases in 2005, reflecting improved consumer protection in the territory. Chan said many complaints were about the methods of selling and marketing of pay-TV services. He said the bundling pricing of telecom and broadcasting services was seen as problematic.

"Consumers may find it vague or hard to separate paying these services," Chan said.  Besides, there were also disputes over which channels consumers signed to pay for, while some complaints were about operators' "tactics" in contract renewals.

"Consumers may be notified about their contract renewals too early - several months ahead of the contracts' expiry. It made them not being alert about their contracts' due date. They're then being assumed they're willing to renew their contracts," Chan said. There were also complaints about operators renewing contracts automatically and at a higher price or for a much longer period, such as 24 months after their first contract of 18 months.

Since competition is keen among pay-TV companies, sales tactics will become more aggressive in future, Chan warned.

When I first signed up with PCCW's Now Broadband TV, I agreed to an 18 month contract.  Then I added some extra channels (on 12/18 month contracts) here and there, so it all got rather confusing.  When I called them up a few months ago to ask about something else, I was told that after the contract expired the channel subscriptions would continue on a month-by-month basis, which seemed fair enough.  Well, it would have been if it had been true.

Recently I decided that I really ought to cancel some of the channels I had chosen originally, at which point I discovered that the weasels had set me up a new 18-month contract - but somehow they had not quite got round to telling me.  I was looking forward to a big row on this.  Didn't happen, but I did end up with a new 18-month contract (albeit at a lower montly charge).  Maybe this is how they operate - as long as you agree to a new contract you can make changes to the channels you have - but it's less than transparent and rather at odds with the way they originally promoted Now as a simpler alternative to Cable TV. 

The other issue is that they never send you any written confirmation of the contract, and it's not on the monthly statement.  Yes, if you search on their website it is possible to find a list of your "commitments", but without a breakdown by channel, and anyway the monthly charges shown on this document - and hence the cancellation charges - are nonsense (it would be cheaper to carry on subscribing rather than cancel), so I think most people will regard this document as a piece of meaningless nonsense.  I suppose the explanation is that the "commitment" is based on their published price, which hardly anyone will pay (since they offer discounts for 12/18 month contracts).  Meaningless indeed. 

So I'd have to agree with Mr Chan from the Consumer Council - as a minimum, PCCW ought to write to all subscribers to confirm the commitment they have made, and then to remind them of this shortly before the commitment is due to end.  Can't see it happening, though.


Play your cards right

The credit card business in Hong Kong is incredibly competitive.  There's no need to pay an annual subscription - most cards offer one or more years free, and then you just have to threaten to cancel to get them to waive the annual fee.

Apart from the introductory gifts there are a variety of special offers, some of which seem to make no sense at all.  For example, DBS is offering a $20 coupon for every $60 you spend at Pizza Hut.  The coupon is only valid for about two weeks, but when you use it there is no minimum spending requirement. 

However, the part I find truly puzzling is that they are going to so much trouble to encourage customers to use their credit cards when they have a pizza delivered, when I'd have thought that would be the very last thing they would want.  Surely they want the drivers to take cash and get back for the next delivery, not spend time taking an imprint of the customer's credit card.

On top of that, DBS give you 90 days credit on your $80 pizza.

Desperate or what? 


Won't get fooled again

Both the Standard and the SCMP report on the games played by Hong Kong property developers. 

From the SCMP (subscription required):

Cheung Kong (Holdings) executive director Justin Chiu Kwok-hung says prices for mid-end properties have peaked for the next six months, after the developer slashed prices on some high-floor units in its latest Tseung Kwan O project.

Other developers branded the recent price cuts as "bogus", and a strategy to talk down the market before next week's government land auction.

[..]

It is not the first time Mr Chiu has expressed pessimism about prices. In October last year, a day before the auction of the former quarters for married police officers in Ho Man Tin, he said the site was unlikely to fetch the $7 billion analysts and surveyors had been predicting. "If the site is sold for more than $7 billion, it will be difficult for developers to justify the cost," he said.

The developer then paid $9.42 billion for the 191,126 sq ft site.

Clearly a case of actions speaking louder than words. More from the Standard:

It is a common practice for Hong Kong developers to announce aggressive price expectations for new developments before official launches. The final price tags are often below the asking prices, which are seen as a test of the market.

Cheung Kong (Holdings) has lowered by more than 10 percent the aggressive prices it set last week for high-floor apartments at its Metro Town project in Tseung Kwan O after the units received a lukewarm response from buyers.

So they are trying to fool buyers into thinking that the new "reduced" prices are reasonable, and other developers into bidding lower for new sites.  Hmmm....