Hong Kong Travel Insurance Scam

Hong Kong holidaymakers are being unfairly steered towards certain insurance plans from travel operators when booking tour packages, the city’s consumer watchdog said on Friday, decrying the sales tactic as depriving customers of the right to choose.

The Consumer Council surveyed 18 operators of three popular short-haul tours to Osaka, in Japan, and Beijing and Chaoshan in mainland China. It found EGL Tours had made it mandatory for customers to buy its Osaka five-day trip with a specific travel insurance plan.
Even those who already had annual travel insurance could not be exempted, it said.

Council chief executive Gilly Wong Fung-han said the marketing strategy was common in the industry, despite the council having raised concerns about it seven years ago. "Consumers should have the choice whether they want to buy from the travel agent or their own insurance agent,” she said.

In a reply to the watchdog, EGL Tours, which offered the Osaka trip for HK$10,399 (US$1,330) in late July, said only travellers joining its tours to Japan were required to buy designated insurance plans, because the plans also covered losses caused by earthquakes, which are relatively common in the country.

Still, the council noted four other firms required travellers to get their designated insurance plans unless they could show they had bought annual or comprehensive travel insurance. If consumers could prove to the travel agencies later they had secured their own plans, a refund could be made.

It added that Morning Star Travel had a preset payment item for customers to buy their designated insurance products for online tour enrolments. But the firm did not reply to the watchdog on whether those who had bought an annual travel insurance package could get a waiver.

Wong said the sales practices would be unfair to consumers because sometimes tours could be cancelled when not enough people signed up, and in that case customers would be inconvenienced. She also asked why only those with an annual insurance plan could be exempted. “Why does [the insurance] have to be year-round? Not everyone travels year-round,” she said.

In a reply to the watchdog, WWPKG Holdings, one of the firms that offered the exception when customers had year-round travel insurance, said the company advised customers to buy its designated plans because the Travel Industry Council (TIC) suggests travellers get their own insurance coverage before going overseas. The fees could be waived if travellers had their own insurance arrangements, it said.

Morning Star Travel did not reply to the council, but an employee told the Post that consumers could just tell them they would not buy their insurance plans later, to arrange a refund.

Meanwhile, the council said premiums for travel insurance sold by travel agents were “generally unreasonable”. In one case, the fee was equal to nearly 30 per cent of the tour price.

It urged the TIC to devise clear guidelines on selling travel insurance, adding that authorities should consider regulatory oversight to safeguard consumers’ right to choose.

Separately, another council report studied 20 textbooks which were republished with revisions in 2019. The new editions of the books became more expensive by 4 to 6 per cent year on year, higher than the inflation rate of 2.8 per cent in the same period.

Its panel found only two books had needed a new edition, while the changes to 16 were considered “marginally necessary”. Revision was unnecessary for the other two, it added.