Need for holistic reform in consumer protection

The number of complaints due to sudden business closures has shot up and was expected to reach 500 by the end of last year, according to the Consumers Association of Singapore.
The number of complaints due to sudden business closures has shot up and was expected to reach 500 by the end of last year, according to the Consumers Association of Singapore. PHOTO: ST FILE

The Consumer Protection (Fair Trading) (Amendment) Bill tabled in Parliament, unfortunately, does not seem to address the lingering problem of retailer insolvency where there have been prepayments made by customers ("New law gives shoppers more protection against errant retailers"; Sept 14).

The recent cases of businesses suddenly winding up or disappearing are merely the latest in a string of such cases where consumers have been left in a quandary.

According to the Consumers Association of Singapore, the number of complaints due to sudden business closures has shot up and was expected to reach 500 by the end of last year.

Perhaps we should look at the recommendations made by Britain's Law Commission in its report, Consumer Prepayments On Retailer Insolvency, presented to the British Parliament on July 13. There were five key areas highlighted for reform:

  • Regulating savings schemes which pose a particular risk to vulnerable consumers
  • Introducing a general power for the government to require prepayment protection in sectors which pose a particular risk to consumers
  • Giving consumers more information about obtaining a refund through their debit or credit card issuer
  • Making a limited change to the insolvency hierarchy, to give preference to the most vulnerable category of prepaying consumers
  • Making changes to the rules on when consumers acquire ownership of goods

A holistic reform package such as the above should be similarly considered for Singapore, and the authorities should address consumer concerns head-on. Any piecemeal reform may make matters worse.

David Chang Cheok Weng

A version of this article appeared in the print edition of The Straits Times on September 24, 2016, with the headline 'Need for holistic reform in consumer protection'. Print Edition | Subscribe