SINGAPORE — The motorcars and beauty industries accounted for the highest number of complaints to the Consumers Association of Singapore (CASE) last year, with consumers having suffered some $2.37 million in prepayment losses.
In a media release on Monday (20 April), CASE said the highest number of complaints it received – 1,683 cases – had been against the motorcars industry, with 42 per cent of the reports made involving defective or non-conforming goods.
The beauty industry accounted for the second-highest number of complaints, at 1,598 cases. About one-third of these complaints involved pressure sales tactics, said CASE.
Of the 14,867 complaints CASE received last year, 85 per cent were instances when consumers were given advice on how to follow up directly with the businesses.
The remaining 15 per cent were filed with CASE, with the association then going on to negotiate or mediate the complaints on behalf of consumers. “Approximately 70 per cent of the filed cases were resolved, with nearly $2.6 million (in-cash and in-kind) recovered for consumers,” said CASE.
With regard to the $2.37 million in losses incurred, the bulk of the amount came from the motorcars, beauty, renovation contractors, bridal, and fitness club industries.
“While businesses generally collect some form of prepayment from consumers before the delivery of goods and services, the amounts collected for these industries tend to be substantial as they involve big-ticket items or long-term commitment,” said CASE.
The association highlighted that 33 complaints received concerned the sudden closure of at least 15 motorcar dealers, the non-transfer of car ownership by these dealers, or both. The total amount of prepayment losses suffered by these consumers came up to $1.15 million.
CASE cited a complaint involving a consumer who paid up $78,000 for a pre-owned car. Even after a four-month wait, the dealer still did not transfer the car ownership to the consumer. The dealer later become insolvent.
“Subsequently, the bank also repossessed his car as the dealer had not paid off the outstanding loan on the vehicle,” said CASE, noting that it will intensify its efforts to educate consumers on the risks involved in making prepayments as well as on how they can protect themselves.
It said it would also engage industry stakeholders and government agencies to consider targeted prepayment protection for certain key industries.
“We are deeply concerned about the amount of losses suffered by consumers due to sudden business closures. In view of the current economic landscape and as more businesses are affected, it is likely that this issue will remain a pressing concern for consumers,” said CASE president Lim Biow Chuan, who is also Member of Parliament for Mountbatten.
About 42 per cent of the complaints against the motorcar industry related to defective goods, with about two-thirds involving pre-owned motorcars.
CASE cited the example of a consumer who had purchased a pre-owned motorcar for $39,135, which later broke down four times within two months due to an engine oil leak and other defects.
While the car dealer agreed to repair the car for free on the first three occasions, the dealer was unwilling to bear the repair cost after the motorcar was brought back for the fourth time.
“After CASE’s intervention, the dealer agreed to absorb the fourth repair cost of $780 for the vehicle,” said CASE.
The association cited Part III of the Consumer Protection (Fair Trading) Act (CPFTA), also known as the “Lemon Law”, which states that consumers are “entitled to a repair or replacement of goods that do not conform to the contract”.
“If a repair or replacement is not possible or if the same cannot be done within a reasonable time and without causing significant inconvenience to the consumer, he can request for a reduction in amount to be paid for the non-conforming good or to rescind the contract,” said CASE.
The association noted that the Standard and Functional Evaluation (SAFE) Checklist was introduced in 2017 to guide consumers on the checks they should perform on pre-owned motorcars and to encourage them to send such vehicles for independent evaluation before making a purchase.
Going forward, CASE said it plans to step up efforts to encourage consumers and stakeholders to adopt the SAFE Checklist.
About a third of the complaints against the beauty industry last year involved salespersons taking advantage of consumers by exerting undue pressure or influence.
CASE said that, in one case, a consumer had visited a beauty salon for eyebrow embroidery treatment at a promotional price of $99.
“The consumer complained that the salon staff proceeded to embroider one side of her eyebrow and then informed her that she had been given a premium eyebrow embroidery treatment costing $2,280,” said the association.
“The staff allegedly told the consumer that she will not embroider the other eyebrow unless she paid for the premium treatment. The consumer was left with no choice but to pay $2,280 for the premium treatment.”
Under the CPFTA, such actions constitute an unfair practice as suppliers are not allowed to take advantage of consumers by exerting undue pressure or influence on them to enter into transactions. In such cases, consumers have the right to seek recourse against the retailers.
CASE said it issued an advisory in July last year to alert consumers to the aggressive sales tactics used within the industry and to remind consumers who do not wish to enter into a transaction that they have the right to decline and walk away.
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