Speech on Consumer Protection (Fair Trading) (Amendment) Bill – 9 March 2012

Sir, many I spoke with welcome this amendment because of prior bad experiences with purchases. Like them and Member Mr Lim Biow Chuan, I had at some point in time purchased products that failed to work soon after the purchase was made. Most retailers in Singapore do not have a ‘no-question-asked’ refund policy. This Lemon Law will force retailers to re-think the business model they use to transact with consumers.

The amendment now makes provision that if a product is found defective within six months of delivery, the customer has the right to demand the seller to make repair or replacement within a ‘reasonable time’ and ‘without causing significant inconvenience’ to the consumer. Or the customer can keep the defective product and be given an agreed discount, or return the product for total refund.

There are four areas I wish to highlight as potential concern areas in the execution of the bill, for which I would be grateful for the Minister’s clarifications or assurances:

  1. What constitutes a refund? Like Mr Hri Kumar, I wonder if retailers will attempt to get around compensation issues by offering or contracting in-house vouchers of the same value as the defective product to the customer as compensation. How do we prevent retailers from such attempts to dilute the consumer’s rights?
  2. A retailer may sign a contract with the customer to state that the product is “As-Is” due to special pricing or promotion or due to the nature of that particular product, with no refund or exchange allowed. Section 13 of the existing Act seems clear enough that it bars sellers and buyers from contracting out of a refund for other considerations such as a lower price.

However, many retailers and consumers may not know of this provision. Retailers may attempt creative ways to contract themselves out of the provisions in this Act during the initial implementation stage. A lot of monitoring and education needs to be done.

The Minister of State has spoken about “As-Is” products. What must retailers now have to do to highlight specific defects in specially priced products, and state that clearly in their contracts and advertising?

  1. The amendment covers physical products. I understand a big area of consumer complaint is regarding packages offering services, such as Spa services. I am citing this as an example but I do not wish to generalise that such packages are bad. One may purchase a package only to find that the centre is perpetually overbooked and can hardly use the package. Or if we sign up for some miracle treatment to restore hair only to find that it does not work after 6 months of faithfully trying the services? What recourse avenues are there for consumers have under the current law now? I appreciate that the Ministry will need time to work out this current amendment on dealing with physical products. I trust it will cover services more comprehensively in a future amendment of the Act.
  2. I understand it will be difficult to cover online purchases as online shops will likely be outside of our jurisdiction or we may even be unable to identify or locate some online shops. Nevertheless, online shops registered in Singapore should have to abide by these rules. I like to hear from the Minister of State on his views on online purchases.

I support the Bill as it is a move in the right direction towards the type of shopping experience we get in first world countries. The execution must be managed carefully to ensure that retailers and consumers are adequately educated so that both groups are fully aware of their rights and obligations under this amendment.

We should be mindful that Singapore is a cosmopolitan city, with consumers, retail frontline staff and even retail owners coming from a diversity of international backgrounds. Non-Singaporeans may be used to the retail practices in their native countries. A good engagement programme with different stakeholders in the implementation is critical to its success. Can the Minister of State elaborate on the steps which the ministry will take to educate retailers and consumers in conjunction with the implementation?

We have just finished the Budget debate, which had a lot of focus on SMEs. The bulk of our retailers are SMEs. The larger retailers will have better resources to get themselves acquainted to and cope with the changes. Smaller retailers may find the changes difficult to understand and deal with. Retailers should also be mindful that they need work out their own agreements with product manufacturers to ensure that they are not stuck with an untenable position when servicing the customers. They will need to factor for refunds and exchanges. Retailers may also now turn conservative about carrying lower-priced products that may not be built-to-last, even if there are consumers willing to buy these because these consumers are highly price conscious. This will lead to changes in our retail model over the next few years.

I hope MTI can extend good support to the SME retailers to ease them in the implementation. Engaging in partnership with organisations such as the Singapore Retailers Association will be helpful. I hope too that there will be a balanced approach in the implementation so that we do not unnecessarily put genuinely good but small retailers out of business.

I trust that if we execute this amendment well, there will be a more pleasant and reassuring shopping experience for us all.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s