Hong Kong TDO Reform: Proposed Cooling-Off Periods for Beauty and Fitness Sectors
Hong Kong has launched a two-month consultation period on introducing a statutory cooling-off period for and imposing a contract duration limitation on pre-paid consumer contracts in the beauty and fitness industries. This initiative targets longstanding issues of unfair trade practices (“UTP”) to protect the rights and interests of consumers by amending the Trade Descriptions Ordinance (“TDO”), the primary consumer protection legislation in Hong Kong.
Background & Proposal
According to statistics released by the Customs & Excise Department (C&ED), nearly 90% of improper selling tactics complaints, such as excessive pre-payments, wrongly accepting payments (WAP), and high-pressure sales methods, involve the beauty and fitness services industries. Such practice easily leaves consumers vulnerable to financial loss.
The closure of PHYSICAL Fitness & Beauty, one of the largest gym chains in Hong Kong, in 2024 further exposed the prevalence of UTPs such as WAP, where traders accept payments from the consumer without intending to provide the good and services as promised. For the fitness and beauty industry, this commonly involves businesses persuading consumers into signing and paying for long-term service contracts whilst knowing that the said businesses are about to be closed.
With the fitness sector taking up around 50% of WAPs, as well as cases involving single pre-payment complaints that exceed HK$2 million, the government sees statutory safeguards as essential to protect consumers from significant financial harm.
The public consultation involved three key policy proposals specifically targeting the beauty and fitness industries (Premises that provide one single type of beauty or fitness services (yoga studios, dancing studios, martial arts studios, etc.) are proposed to be exempted, as the Government only received very few complaints associated with such premises. These measures are meant to target high-risk models that provide long-period, multi-service packages; which often involve large pre-payments.
The three key policy proposals are:
Statutory cooling-off periods on pre-paid consumer contracts
Consumers will have 7 calendar days to reconsider contracts, with a mandatory 14-day deadline for merchants to issue refunds. The Government proposes three possible thresholds where contract amounts above such thresholds will be subject to the mandatory cooling-off requirements, namely HK$3,000, HK$8,000 and HK$15,000.
Traders will be mandated to provide information to consumers on the cooling-off periods before entering into contracts.
Statutory limit on contract duration
Beauty and fitness contracts will have a proposed maximum duration of two years, contracts of indeterminate duration are prohibited. and the said contractual services must commence within three months of signing. These aim to reduce risks associated with long-term prepayment commitments.
Expanded Organized and Serious Crimes Ordinance
Section 13L (wrongly accepting payment) of the Trade Descriptions Ordinance (TDO, Cap. 362) will be added to the Organized and Serious Crimes Ordinance to give the C&ED additional investigative and enforcement powers. For example, custom officers can apply for court restraint orders to freeze assets of dishonest traders; dishonest proceeds can also be confiscated.
Traders who do not comply with the statutory cooling-off periods or maximum contract duration requirements would be subject to both civil and criminal sanctions, though only fines (and no custodial sentence) have been proposed.
Significance
The statutory proposal can potentially reshape the beauty and fitness industries both operationally and in terms of public perception. Certain actors in these industries rely heavily on sales tactics instead of quality of services for profit. Stricter measures may encourage more sustainable business models built on transparency, ideally supporting the development of higher-quality services. Additionally, the infamous aggressive practices have damaged public trust in these sectors. Introducing statutory cool-off rights may help improve consumer confidence and public perception of the industries.
As of the date of this article, the Consultation Paper can be accessed at https://www.cedb.gov.hk/assets/resources/cedb/consultations-and-publications/Consultation_Paper-Trade_Descriptions_Ordinance_2026_en.pdf
Our relevant practices
Haldanes’ Corporate & Commercial, Intellectual Property, and Media, Entertainment & Sports teams work closely with business owners, multinationals, and lifestyle brands to navigate the evolving regulatory landscape in Asia. While these proposed Trade Descriptions Ordinance (TDO) reforms focus on consumer protection, they directly impact business infrastructure, commercial contracts, and asset protection. Anthony Leung’s practice focuses on advising clients across dynamic consumer-facing industries—e.g. art, food and beverages, hospitality, gaming, and entertainment groups, sports, etc. — on the operation, regulation, and compliance of their businesses. As consumer contracts face mandatory cooling-off disclosures, strict two-year caps, and tighter enforcement parameters, our team is well-positioned to assist these sectors in auditing standard commercial terms, safeguarding commercial intellectual property, and ensuring comprehensive regulatory alignment.
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