Amendments to the Consumer Protection (Fair Trading) Act (CPFTA)

CPFTA came into effect on 1 March 2004, aimed at creating a fair trading legislation to foster a fair and equitable trading environment or marketplace. The retail sector is an important part of Singapore’s economy as well as significant source of tourism revenue. It is important to promote a fair trading culture among the retailers, in order to protect the interests of locals and tourists.

Originally the CPFTA was mooted as part of the efforts to weed out errant traders, however the loopholes within the legislation failed to substantially and adequately safeguard consumer interests.

The consumers affected by any of the unfair trade practices listed in the Act can seek civil remedies by approaching the Consumer Association of Singapore (CASE). Tourists affected by deceitful trading practices must approach the Singapore Tourism Board (STB). The remedial measures are purely civil remedies and will not lead to any criminal sanctions against the traders. However according to the latest amendments, the failure to comply with the requirements of court will amount to criminal offence.

The Background

The Act is periodically reviewed to ensure its relevance in the evolving landscape. The amendments have been tabled to weed out some of the retailers who have been flouting rules persistently. Though unfair trading practices are pursued by only a small section of retailers, there has been an upsurge in the recent times of recalcitrant retailers especially involving prepayments for product/services such as spa service, fitness centers, travel services and wedding services. The repercussions of unfair trade practices is worse when it involves tourists, the brand image of Singapore gets adversely impacted upon and when such incidents go viral, genuine retailers and businesses also get affected.

There were loopholes in the previous provisions preventing enforcement of compliance. Some recalcitrant retailers continued to engage in duping customers. Most often, they will shutdown the company that had been prosecuted and will set up a new company and continue their errant trading practices under the new identity. In such cases, the Act did not serve its purpose. Hence the proposal for the amendment was made in May 2016 culminating in the passing of The Consumer Protection (Fair Trading) (Amendment) Bill 2016 in September 2016. The latest amendments have sharpened the claws of the Act to clamp down on errant retailers. The Ministry of Trade and Industries (MTI) reviewed the amendment proposal and the amendments were enacted after a detailed public consultation of the proposal. The two key amendments made to the act will soon come into effect.

SPRING empowered as enforcement agency

SPRING Singapore has now been empowered with investigative and enforcement powers by virtue of the latest changes to the Act. The agency can investigate the errant retailers and gather evidence. It can file for an injunction against the guilty retailers. SPRING can enforce the retailers to comply by the injunction orders issued by the court.

Court can issue additional orders

In order to ensure that the customers are aware of the injunction and to enable them to make an informed decision on purchases, the court may require the errant retailer to prominently publicize that it is under injunction. In addition, in order to clamp down on circumventing practices of setting up new commercial entities, to continue unscrupulous trading practices, the court may require the errant retailer to notify SPRING on any changes to the entity. In the case of guilty individuals they have to notify SPRING of any changes in their employment status. This helps to ensure that the guilty retailers are continuously tracked and that they comply with the injunction orders and any other relevant requirements.

It must be noted that CASE continues to remain the primary contact point (for tourists, it is the Singapore Tourism Board (STB)) for affected customers seeking redress for their grievances. CASE will continue to investigate complaints and negotiate for compensation from guilty retailers. If the errant retailers continue to persistently engage in malpractices to deceive customers, CASE will notify SPRING to take further action however, the errant retailers may enter into a Voluntary Compliance Agreement (VCA) with CASE, to discontinue such acts of non-compliance and continued conformity to the VCA will prevent escalation to SPRING.

A list of 24 unfair practices is provided in the second schedule of the Act. This provides greater clarity as to what constitutes unfair practices. The list covers acts that are related to making false statements or misrepresentation, omission of details, overpricing, pressure tactics to sell, not issuing a copy of documents to the customer upon request, not supplying goods/services after accepting payment etc.

It is of interest to evaluate the protection available to consumers who buy online. It has been stated that the Act’s provisions will also protect the online consumer. However, when online transactions are cross-border in nature, involving overseas retailers or suppliers, the Act may not have the powers to extend protection to the customers. Therefore realizing the significance of consumer awareness the government is educating consumers about the need for making well-informed decisions and to scrutinize the sellers offering before making any transaction.

It must be noted that while the Act allows only civil remedies, the police may still charge the retailer under other criminal legislation, if the particular transaction involved offences that are criminal in nature. The objective is to uphold the rights of the consumer and to improve transparency and legitimacy in trading practices. Genuine retailers who comply with the applicable laws, should not be affected by the amendments.