Why It Matters

Moving against errant retailers

Crowds have thinned at Sim Lim Square since errant retailers engaging in dishonest sale practices there made the news in Nov 2014.
Crowds have thinned at Sim Lim Square since errant retailers engaging in dishonest sale practices there made the news in Nov 2014. PHOTO: NEW PAPER FILE

Errant retailers will find it tougher to hide unfair sales practices with proposed changes to strengthen consumer protection laws here.

For years, shopping malls such as Sim Lim Square and People's Park Complex have been unable to shake off a handful of errant retailers who tend to avoid penalties by shutting their businesses once court orders have been taken up against them. Often, they open a new shop under a different name with consumers none the wiser.

The Government aims to plug this loophole in the Consumer Protection (Fair Trading) Act by requiring that business owners who have had court orders or injunctions taken up against them inform consumers about it, even if they open a new shop.

"We are going to strengthen the framework to make sure that the injunction is not just on the shop itself or the company, but on the individual," said Mr Teo Ser Luck, Minister of State for Trade and Industry, on Monday.

However, errant business owners can still avoid recognition by setting up a new shop under someone else's name, said Mr Seah Seng Choon, executive director of the Consumers Association of Singapore.

He added: "This is a problem that is not addressed as the publicity of the court order applies only to the individual business owner, and not his family members or friends."

If an errant retailer opens a new shop under someone else's name, it would be near impossible to enforce the requirement to publicise the court order; hence, for truly errant retailers, the impact could be minimal, said Ms Kala Anandarajah, head of competition, antitrust and trade at law firm Rajah & Tann Singapore.

To beef up consumer protection, an agency within the Ministry of Trade and Industry will be appointed to investigate and take action against recalcitrant retailers, including gathering evidence that could support court orders. In its review of the law earlier this year, the ministry looked at places such as Hong Kong, where there are public agencies to take action against unfair trade practices.

A version of this article appeared in the print edition of The Straits Times on July 22, 2015, with the headline 'Moving against errant retailers'. Print Edition | Subscribe