A furniture firm that was set up a year ago with $1 has disappeared, after collecting thousands of dollars from customers for goods that were never delivered.
Since April, 54 complaints have been lodged against the firm called Royal House (The Rome Gallery) for its failure to fulfil contracts ranging from $500 to $6,500, said the Consumers Association of Singapore (Case).
It urged consumers to be prudent in dealing with lowly capitalised or newly set up companies, noting that new firms "may lack the capital and the resources to continue their operations in the long term".
This is the latest case involving prepayments - following the high-profile closure of gym chain California Fitness in July - which highlights again the lack of protection for consumers who make upfront payments.
Customers say the furniture retailer had been hawking its goods at furniture fairs up till as recently as July.
The following month, the firm's chief executive and director Chia Meng Siang, who is also known as Gary, texted customers to say the firm could no longer operate as it had cash flow issues and "huge financial debt problems" due to "improper operation of the business".
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Before you hand over your cash...
What consumers should do before making any prepayments:
•Do an online search of the company. Read reviews of the firm on online forums.
•Find out how the company is faring by checking its accounts through the Accounting and Corporate Regulatory Authority.
•Buy from the more than 700 CaseTrust accredited retailers which provide prepayment protection, in sectors from motoring to renovation as well as spa and wellness. The accreditation, by the Consumers Association of Singapore, certifies a business as honest and fair. The list can be found at www.casetrust.org.sg
•Avoid purchasing prepaid packages involving large sums or lengthy contract periods.
He added that he was "very guilty and very sorry" to customers who paid deposits or full amounts but did not receive their goods.
He did not respond to phone calls from The Straits Times.
An IT manager who wanted to be known only as Mr Yogesh, 41, paid the firm $2,188 - the full amount - for a two-piece sofa set at a furniture fair at Singapore Expo in June. The delivery date was pushed back twice - from July 9 to July 14, and then to July 23. The sofas never arrived.
When he went to the company's address at Woodlands Industrial Park, he found the office shut.
He filed a complaint with Case and a police report.
"As a consumer, what are my legal options? I can't afford to find a lawyer to claim $2,188. Hiring a lawyer will cost more than that," said Mr Yogesh, who has joined a Facebook group with 25 other affected customers to share updates on the case.
Another consumer, who gave her name only as Kristine, bought a two-piece sofa set at $1,800 from the company - also at an Expo fair - on July 31.
When the items were not delivered on Sept 9 as promised, she tried to call the firm, but its phone number was no longer in use.
It was then that she did an Internet search and read on an online forum that other customers had similar experiences with Royal House.
Said the 34-year-old finance executive: "I ordered the furniture so recently. The firm must've already been doing badly then. I feel like I've been scammed."
Madam Joanne Chong, 54, who sublet her rented warehouse in Woodlands to Royal House, told The Straits Times the firm owes her $5,000 in unpaid rent.
Case said in an alert on its website that consumers should be careful when making purchases, especially at furniture fairs, as organisers may not conduct in-depth background checks on the exhibitors.
Case executive director Seah Seng Choon advised consumers to pay only upon delivery of goods and, if a deposit is required, to negotiate to pay as low a deposit as possible. He said: "We strongly advise consumers against paying high deposits at such furniture fairs, especially when the business or the fair organiser do not offer prepayment protection."
Last week, Minister of State for Trade and Industry Koh Poh Koon said in Parliament that it would be "very challenging" to impose a broad-based measure on all businesses to protect consumers against loss of prepayments from business closures.
