Consumer Protection

The prescribed claim limit has been increased from $20,000 to $30,000 to allow consumers to rely on the CPFTA for larger transactions.

b. Extend Small Claims Tribunals & jurisdiction.

The Small Claims Tribunal’s (SCT) jurisdiction has been extended to time share related actions arising from the Consumer Protection (Cancellation of Contracts) Regulations, thus providing consumers with a low cost avenue to pursue such actions. The SCT has also been given jurisdiction over actions insofar as they relate to a deposit paid in relation to or in contemplation of a motor vehicle sale contract. This provision was made because, prior to the change, the SCT only heard cases relating to concluded contracts. Cases arising from the new Consumer Protection (Motor Vehicle Dealer Deposits) Regulations may involve actions for the return of deposits when the contemplated vehicle sale contract falls through because the dealer did not obtain financing as agreed with the consumer.

c. Extend the limitation period for actions by specified bodies .

The CPFTA allows specified bodies (CASE and STB) to seek a court declaration that a supplier has (or is about to be) engaged in an unfair practice and/or an injunction against the supplier. The limitation period for such actions has been extended from one year to two years. The starting date of the limitation period has been aligned with that for consumers (namely, the date of the consumer's knowledge of the unfair practice).

d. Extend the limitation period for actions by consumers .

The limitation period for consumer actions in respect of unfair practices has been extended from one to two years to align with the limitation period for declaration or injunction actions by specified bodies. The courts have been given the discretion to stay such proceedings if there is a corresponding action for a declaration or injunction by a specified body. This allows consumers to await the outcome of the specified body's corresponding action in order to rely on findings of the court in the corresponding action in support of their own actions against the supplier.

e. Inclusion of Financial Products and Services under the CPFTA.

Financial products and services regulated under certain Acts were excluded from the CPFTA. With the amendments, financial products and services regulated under the following Acts administered by either the Monetary Authority of Singapore (MAS) or International Enterprise Singapore have been brought under the CPFTA.

• Banking Act
• Finance Companies Act
• Financial Advisers Act
• Insurance Act
• Section 28 of the Monetary Authority of Singapore Act
• Money-changing and Remittance Businesses Act
• Securities and Futures Act
• Commodity Trading Act
• Moneylenders Act (w.e.f. 1 April 2010)

Key amendments to the Regulations under the CPFTA

Cancellation periods for direct sales contracts

Under the Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations 2009 (which replace the former Regulations by the same name), the right to cancel contracts within the “cancellation period” has been extended to time share related contracts (such as a time share resale contract); the former Regulations applied only to direct sales contracts and time share contracts. The duration of the cancellation period has been increased from 3 to 5 working days. Suppliers are required to provide refunds within 60 days after the cancellation of a contract under the Regulations.

Direct sales contracts are essentially contracts entered into during an unsolicited visit. Under the former Regulations, an “unsolicited visit” extended to a visit by a supplier (not expressly requested by the consumer) that takes place after the supplier telephones or visits the consumer indicating his willingness to visit the consumer.

To address feedback that some direct sales contract suppliers had sought to circumvent the Regulations by making their initial contact with the consumer at places other than a residence or the place of business of the consumer, the Regulations have been amended to clarify that an unsolicited visit arises so long as the initial contact occurs at any place other than the supplier's permanent place of business. This will include a meeting at the supplier's exhibition booth at a trade fair, where the supplier indicates his willingness to visit the consumer.

Collection of deposits by motor vehicle dealers

Motor vehicle dealers often package the purchase and financing of a motor vehicle together, collecting a deposit (which comprises the down payment, the bid for the Certificate of Entitlement and the fee for a loan application) from the consumer. In some cases, the deposit is not refundable if the purchase falls through, upon a failed loan application. Under the new Consumer Protection (Fair Trading) (Motor Vehicle Dealer Deposits) Regulations 2009, motor vehicle dealers will be required to be transparent about their deposit policies and, upon the consumer’s request, to produce a written statement from the financial institution to prove the loan rejection when they intend to retain the deposit.

Unsolicited goods and services

Suppliers sometimes send goods or provide services to consumers without their prior consent, and subsequently demand payment from them. Goods or services may also be provided on a free trial basis, with or without the consent of the consumers. This places a burden on the consumer to opt-out from the arrangement and may result in consumers being charged for goods and services without their knowledge or consent.

The Consumer Protection (Fair Trading) (Opt-out Practices) Regulations 2009 allows consumers to treat all unsolicited goods and services (except for mis-deliveries) as unconditional gifts from suppliers, unless the consumer has acknowledged in writing his willingness to accept and pay for such goods and services. Consumers can claim a refund of payments made for such goods and services. The refund claim must be made within 12 months after the payment, and the supplier will have 60 days to make the refund.


2. When will the Consumer Protection (Fair Trading) (Amendment) Act and the Regulations come into effect?

The Consumer Protection (Fair Trading) (Amendment) Act and the Regulations will come into effect on 15 April 2009.

3. Do the Consumer Protection (Fair Trading) (Amendment) Act and subsidiary legislation apply retrospectively?

No. The changes made by the Consumer Protection (Fair Trading) (Amendment) Act and subsidiary legislation apply to material events that take place on or after the date the Amendment Act or subsidiary legislation comes into effect, i.e. 15 April 2009.

For example, the changes made by the Amendment Act will not apply in relation to a consumer action for an unfair practice that occurred before that date. This means that actions cannot be taken under the Consumer Protection (Fair Trading) Act for unfair practices involving the supply of previously excluded financial products and services which occurred before that date. Similarly, the former Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations will continue to apply in respect of the cancellation of direct sales contracts and time share contracts entered before that date.

• to do or say anything, or omit to do or say anything, if as a result a consumer might reasonably be deceived or misled;
• to make a false claim;
• to take advantage of a consumer if the trader knows or ought reasonably to know that the consumer
  • is not in a position to protect his own interests; or
  • is not reasonably able to understand the character, nature, language or effect of the transaction or any matter related to the transaction; or

  The trader should provide the consumer with all relevant and material information so as not to mislead the consumer. The consumer can then make an informed decision. Traders should review their business practices; in particular, what information they provide to consumers and how they convey information.

  The court, in determining whether or not a trader has engaged in an unfair practice, would consider the reasonableness of the actions of the trader. The court would also take into account, in granting remedies to the consumer, whether the consumer had tried to resolve the dispute with the trader before commencing the action and, if any specified dispute resolution scheme was available to the consumer in respect of the dispute, whether the consumer sought to resolve the dispute through such a scheme.

  5. What can a consumer who has encountered an unfair practice do to seek recourse?

  The consumer should first seek to resolve the dispute with the trader. Businesses should consider having in place a dispute resolution or alternative mediation process so that there is a platform for settling disputes with consumers. Currently, mediation services are available through Community Mediation Centres, Singapore Mediation Centre, CASE and various industry-specific mediation facilities. If the dispute cannot be settled, the consumer may file a claim in court for civil remedies. Most claims for unfair practices under the Act should be filed in the Small Claims Tribunal. The consumer may also have rights of action under contract or tort law. The consumer should seek legal advice in case of uncertainty.

  When considering a claim for unfair practice under the Act, the court will take into account whether the consumer made a reasonable effort to minimise any loss or damage resulting from the unfair practice and resolve the dispute with the trader before commencing action. The court would also take into account, in granting remedies to the consumer, whether the consumer tried to resolve the dispute with the trader before commencing an action and, if any specified dispute resolution scheme was available to the consumer in respect of the dispute, whether the consumer sought to resolve the dispute through such a scheme.

  The Financial Industry Disputes Resolution Centre Ltd (FIDReC) has been prescribed as a specified dispute resolution scheme in respect of disputes relating to MAS-related financial products or services supplied by a subscriber to FIDReC.

  6. Is there a cap on the amount of claim that can be filed under the Act?

  Yes, there is a cap of $20,000 on the amount of claim for an unfair practice that can be filed under the Act. This cap has been increased to $30,000 from 15 April 2009.

  7. By when should aggrieved consumers file a claim in court?

  Consumers should file their claim within a year from the occurrence of the unfair practice or the earliest date when the consumer could reasonably have discovered the unfair practice, whichever is later. This period has been extended to two years from 15 April 2009.

  8. What are the remedies that the court may grant under the Act?

  The court may grant remedies that include variation of the contract, orders for repair or replacement of parts for goods, restitution of money or property, award of damages for loss or damage suffered as a result of the unfair practice or (in appropriate cases) order of specific performance. In the case of the Small Claims Tribunal , it may make orders under section 35 of the Small Claims Tribunal Act, such as orders to pay money and work orders to rectify a defect in goods or to make good any deficiency in the performance of services, by doing such work or attending to such matters (including the replacement of goods or parts) as may be specified in the order.

  9. What are the transactions that are excluded from the Act?

  Please refer to the First Schedule of the Act. Land transactions are excluded from the Act. Rentals of residential property and services provided by real estate agents to their clients are however included. Investment, insurance and banking transactions and other financial activities already regulated by specified legislation administered by Monetary Authority of Singapore (MAS) or certain other government agencies are currently excluded from the Act. With effect from 15 April 2009, the Act has been extended to apply to the supply of financial goods and services regulated under various Acts administered by MAS and International Enterprise Singapore.

  10. How does the Act address the problem of those traders who consistently engage in unfair practices?

  There are provisions targeted at traders who persist in engaging in unfair practices. Under the Act, a District Court or a High Court could grant a declaration and an injunction against an errant trader, on the application of a specified body. CASE and the Singapore Tourism Board have been appointed as specified bodies under the Act to look after the interests of local consumers and tourists respectively. Before filing an action for a declaration or injunction, the specified body must first obtain the endorsement of an Injunction Proposals Review Panel. The Panel will review whether there is a public interest to be safeguarded through the injunction.

  Process-wise, unless there are exceptional circumstances surrounding the unfair practice that warrant the specified bodies doing otherwise, the specified bodies should first offer an errant trader a non-litigious option in the form of a Voluntary Compliance Agreement (VCA) before an injunction is applied for. A VCA is a voluntary agreement between a specified body and the errant trader, whereby the trader agrees not to engage in an unfair practice. The trader is free to turn down the option and instead let the Panel and the court decide on the injunction application.

  11. Would consumers be able to cancel contracts under the Act?

  The Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations allow for cancellation of time share and direct sales contracts within a 3-day cancellation period (excluding Sat, Sun and public holidays). With effect from 15 April 2009, the Regulations have been extended to include time share related contracts (such as time share resale contracts) and the cancellation period has been increased from 3 to 5 days. The cancellation period is specifically targeted at situations where the consumer is subjected to high-pressure sale tactics. During the cancellation period, consumers should review their purchasing decision and, if they decide to cancel the contract, give the trader notice of cancellation in the manner provided under the Regulations.

  In the event that the consumer encounters an unfair practice in the course of a consumer transaction, he can also commence action in respect of the unfair practice under the Act and seek civil remedies. He may also exercise any other rights of action he may have under any other law, for example, contract or tort law. This is irrespective of whether the cancellation period under the Regulations has lapsed.

  12. How do consumers cancel timeshare and direct sales contracts within the 5-day cancellation period?

  To cancel a contract, the consumer should give the supplier a notice of cancellation (see Annex A) in writing of the consumer's intention to cancel the contract.

  A notice of cancellation must be:
  a) delivered personally to the person designated in the consumer information notice; or
  b) sent by pre-paid post to the address designated in the consumer information notice; or
  c) sent by facsimile transmission to a facsimile number designated in the consumer notice.

  A consumer information notice is a document provided by the supplier, required under the Regulations, that contained the following details:
  a) Name of supplier.
  b) Supplier's reference number, code or other details to enable the transaction to be identified.
  c) Designated person(s) to whom notice of cancellation to be given, including at least one name and at least one address or facsimile number.

  If the supplier did not designate the necessary person, address or contact number in the consumer information notice, the consumer can give notice of cancellation under the Regulations by a notice in writing, to the usual or last known address of the place of business of the supplier or designated person (if any). If the supplier or designated person is a body corporate, the notice can be left or sent by pre-paid post to its registered office or principal office.

  A notice of cancellation sent by pre-paid post is deemed to have been given at the time of posting, whether or not it is actually received. The consumer is advised to send the notice by registered post to facilitate proof of posting.

  13. Where can one obtain a copy of the Consumer Protection (Fair Trading) Act or the Consumer Protection (Fair Trading) (Amendment) Act?