Consumer protection act to get more bite?
Ministry of Trade and Industry mulls changes to give consumer protection act more enforcement powers
Mention Sim Lim Square and many will remember it with a frown and a shake of the head.
The electronics mall became synonymous with dishonest retailers in late 2014, after some of their unsavoury sales tactics came to light.
In particular, one shop, Mobile Air, and its boss Jover Chew, became the face of unfair sales tactics there.
Then, the Consumer Protection (Fair Trading) Act (CPFTA) drew ire for lacking bite when it came to dealing with persistently errant retailers.
Some even side-stepped injunction orders - a court order for retailers to stop their unfair practice - by operating under a different signboard, The New Paper previously reported.
To give the Act more teeth, the Ministry of Trade and Industry (MTI) is proposing to amend the CPFTA, after reviewing the legislation last year.
The amendments include giving statutory board Spring Singapore investigation and enforcement powers and requiring more of errant retailers under injunction orders.
Errant retailers who do not comply with injunction orders may be seen as being in contempt of court, an offence that carries penalties ranging from a fine to imprisonment.
From today, the ministry will hold a public consultation on these proposed amendments until June 15.
Consumer Association of Singapore (Case) executive director Seah Seng Choon lauded the amendments as a step in the right direction.
Explaining the significance of the proposed changes, he told The New Paper: "The enforcement regime will now be strengthened because the agency that MTI has roped in to help - Spring - will have power to go into the company to interview the business owners, seize products or even ask for documents as evidence of their unfair practices."
An MTI spokesman added that such powers are in line with those provided to other government agencies that need to conduct investigations and take enforcement actions.
If proposed changes to the Act are passed, the cat-and-mouse game with retailers will also stop, Mr Seah pointed out.
The current Act allows for Case and the Singapore Tourism Board (STB) to take up court orders against errant retailers to stop unfair business practices. But these retailers found ways to side-step the court orders, Mr Seah said.
Since the Act was enacted in 2004, only seven injunction orders have been taken against errant retailers - six by Case and one by STB.
When asked if the small number of injunctions were a result of the CPFTA lacking bite, Mr Seah disagreed and added that the bigger problem lies in enforcing the injunction orders.
"For instance, we can take an injunction order against a company. But all they need to circumvent the law is to set up a new company. Then, the injunction order would not apply," he said.
This was what happened at Sim Lim Square in 2014.
With the amendment requiring retailers under an injunction order to report any company or employment changes to Spring, Mr Seah said that the court order would now apply regardless of changes.
The Case executive director was quick to add that only a small portion of the retailers here are incorrigible. Most cases are resolved through negotiation and mediation, he said.
Case statistics show that the mediated cases in Singapore have a resolve rate of 76.3 per cent. Of the 190 cases mediated by Case last year, 145 were resolved.
Retailers at Sim Lim Square, who had to deal with plummeting business after the bad press, welcomed these proposed amendments.
Sim Lim Square retailer Choicecycle CCTV's senior security advisor Jason Chen told TNP: "Today, 100 per cent of the retailers in Sim Lim Square are reliable operators. But we can't be assured that they won't return in the future.
"Once these measures are implemented, it will not only help to protect consumers, but also help Sim Lim Square business operators,"
When asked if he is worried that the proposed CPFTA amendments will be less favourable towards retailers, Mr Chen said: "Laws only apply to those who break it. We have no worries and do not feel (the laws are) unfair."
Errant retailers play a game of cat and mouse
THE SIM LIM SQUARE SAGA
The outcry over errant retailers at Sim Lim Square had been brewing for years.
But the anger reached a high in November 2014 after Vietnamese tourist Pham Van Thoai was seen crying while kneeling and begging for a refund at now-defunct mobile phone shop Mobile Air.
Mr Pham had been told to pay $1,500 for the warranty of a $950 iPhone 6 that he had paid for.
The incident came a week after the same shop, run by Jover Chew, refunded a Chinese student $1,010 in coins. She had earlier been asked to pay $1,400 on top of the $1,600 that she had paid for an iPhone 6 Plus.
She took her case to the Small Claims Tribunal, which ordered the shop to refund her $1,010.
Following news reports on the incident, China's Ministry of Foreign Affairs posted a notice on its website, warning Chinese tourists about shopping for mobile phones in Singapore. The notice said there had been many cases of fraud when Chinese tourists purchased electronic goods like mobile phones.
It reminded tourists to look out for notices of errant retailers put up in the malls.
Vietnamese media also picked up on the plight of Mr Pham, further damaging Sim Lim Square's reputation.
International news agencies such as the BBC also reported on the incident and the story was picked up by major news websites overseas.
Chew eventually shuttered his business after his details and photos were splashed on the Internet.
The Consumer Association of Singapore (Case) has been publishing a blacklist of errant shops in Sim Lim Square since April 2013.
But some of these blacklisted shops simply switched their signboards to escape the blackmark.
One such shop was Cyber Maestro. After it was put on Case's blacklist and also had a court injunction against it for unfair practices like overcharging and exerting undue pressure to enter into a transaction in November 2014, the shop closed down and a new tenant, Megacentrix Technologies, and subtenant VS One took over.
But a check revealed that the person behind VS One was related to the boss of Cyber Maestro. The two businesses also share the same registered address and the shareholders of both businesses are also husband and wife.
The same thing happened with Chew's Mobile Air. After he closed the shop, a new business known as HJ Mobile took over the shop space less than two weeks later.
A Sim Lim Square spokesman told TNP then: "Everything in the shop is the same. The people working there are the same. It's just the signboard that is different."
A check with the mall's list of tenants shows that the shop space has been taken over by other vendors.
Last October, four of Chew's employees were sentenced to jail terms ranging from four to 14 months after being found guilty of conspiring to cheat customers.
A month later, Chew was jailed 33 months for cheating 26 customers of over $16,000.
PROPOSED CHANGES TO CPFTA
The Ministry of Trade and Industry (MTI) proposed to amend the Consumer Protection (Fair Trading) Act following a review of the legislation last year.
As part of the review, the ministry consulted industry stakeholders. They also studied the consumer protection laws in Australia and Hong Kong, which have similar business environments.
Here are some key proposed amendments to the Act:
1. Enforcement powers
Spring Singapore (Spring), a statutory board under MTI, will be appointed as the administering agency, with investigation and enforcement powers under the CPFTA.
This means officers from Spring can enter premises with or without a warrant, and seize goods and documents to gather evidence to file timely injunction applications.
2. Publicise injunction orders
The court may additionally require an errant retailer to publicise that it is under injunction.
This includes notifying and obtaining written acknowledgment from consumers prior to any transactions, or incorporate notices of the injunction order in receipts or invoices issued to customers.
3. Report changes
An errant retailer under injunction must notify Spring when it changes:
- its premises or the number of premises it operates;
- its Internet address or the number of Internet addresses at which consumer transactions are entered into;
- its form from a firm or a company to a limited liability partnership.
- its directorship and partnership.
The individuals working in such a retailer should update Spring on the changes in their employment status.