In this file photo dated March 12, 2020, visitors wear face masks at the Hong Kong Central Library in Causeway Bay. (CALVIN NG / CHINA DAILY)

Hundreds of parents and staff fell victim to the abrupt closure of a Hong Kong private tutoring company with five centers, with the Consumer Council reporting it had received at least 63 complaints involving HK$664,087 in prepaid tuition fees. 

Experts from the education sector said the protection of consumers’ rights in such prepaid consumption is still insufficient, while calling on the public to stay alert to potential frauds and the authorities to strengthen regulation and law-enforcement.

Lawmaker Chu Kwok-keung, who represents the city’s education sector, said that according to current regulations, licensed education centers are not allowed to collect more than one month's tuition fees in advance

Brilliant Education was established in 1996, and operated centers in Kornhill, Chai Wan, Shau Kei Wan, Ho Man Tin and Siu Sai Wan, offering programs for kindergartners to senior secondary students.

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On Saturday, the company suddenly announced the closure of all of its centers, saying it has “fulfilled its historical mission”, without mentioning the reason or offering refunds.

Affected parents and staff set up a WhatsApp group to protect their rights on Saturday night; it had attracted over 600 members on Monday afternoon.

According to the authorities, the company’s behavior may have breached regulation by collecting tuition fees more than a month in advance. According to the Education Bureau, one of the centers wasalso unregistered. 

By 6 pm on Monday, the Consumer Council had received 63complaints from parents about prepaid tuition fees, involving a total amount of HK$664,087, with the average loss per case ofHK$10,541. One complainant reported a loss of over HK$50,000, the council’s chief complaints and advice officer Dragon Chong Lung-ng told a radio program on Monday.

Hong Kong Customs said it has received 119 reports about the closure of Brilliant Education , as of 5 pm of Sunday, and Hong Kong police have received at least two reports.

A student’s parent surnamed Chan told the radio program that shehad paid HK$18,000 in advance to one of the centers as tuition fee for her child. 

She said the center had called her in the middle of July, promising a discount for advance payment which would increase if she signed up for more courses.

Chan did not immediately accept the offer. But the center called her again the next day and offered an additional 30 percent discount. 

Chan finally prepaid for six months of tuition, however, the center suddenly announced its closure two weeks later. She said she suspected that Brilliant Education had been experiencing operational difficulties for some time but had concealed this fact from parents while continuing to collect tuition fees. 

During the radio program, Chong said that if a company is aware that it is likely to be unable to provide services and still collects money from parents, it might contravene the Trade Descriptions Ordinance.

The council will try to contact the responsible person at Brilliant Education to refund parents, Chong said.

He also suggested that parents who paid by credit card should contact the credit card center as soon as possible to try to get a refund. He reminded consumers that prepayment carries certain risks, and they should try to minimize the amount of prepayment to reduce potential losses.

A spokesperson of the Education Bureau said that the company hadnot registered its center in Ho Man Tin. 

Lawmaker Chu Kwok-keung, who represents the city’s education sector, said that according to current regulations, licensed education centers are not allowed to collect more than one month's tuition fees in advance. 

He said he doubted the education company’s conduct was fraudulentfor demanding large sums of money from parents in advance and then suddenly closing down. He suggested that the police should intervene and closely follow up on the matter.

Chu added that previously, the supervision of education centers focused more on student enrollment and whether the advertisements were misleading, with less emphasis on monitoring operational aspects.

He called on related departments to strengthen regulations in this area, including requiring institutions to submit proof of their operating conditions to protect the rights of parents.

Lawmaker Tang Fei, who is also vice president of the Hong Kong Federation of Education Workers, said that consumption with pre-payment had caused lots of controversy, particularly in industries such as beauty centers, slimming centers, and fitness centers. 

There is little chance for consumers to recover their prepayments once the service provider ceases trading, Tang said. Although the government has introduced a seven-day cooling-off period arrangement for consumers to cancel the contract, this arrangement only applies to the initial payment and does not cover the recovery of prepaid fees after the business is closed.

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Tang added that although current legislation prohibits tutorial centers from collecting more than one month's tuition fees at a time, the general public seems to be unaware of this. He encouraged thegovernment to better educate the public on this, as well asstrengthen law enforcement and regulation to protect consumers’ interests.

The Labor Department said it will offer necessary assistance to affected employees, while the Mandatory Provident Fund Schemes Authority said it will file a civil claim on behalf of the affected employees to purse remaining MPF arrears from the company.

According to the Non-Compliant Employer and Officer Records of MPFA, Brilliant Education had been pursued for MPF arrears inmultiple cases.