Introduction
It’s a dog-eat-dog world out there. There are unethical businesses which will lie and take advantage of their customers just to make a sale. One example occurred way back in 2014, when an unsettling video of one Pham Van Thoai circulated on the net, which showed him crying and begging for a refund from Mobile Air, a mobile shop formerly based at Sim Lim Square.[1] The background to this was that he had been tricked into signing a contract to pay an additional sum of $1,500 as a warranty for the phone he had just purchased.[2] While the offenders involved were duly penalised,[3] unfortunately, the reality in Singapore is that such unfair practices are often not a crime, and getting a remedy may not be as simple as making a police report.[4] This article explains how you can defend yourself against unfair business practices when making purchases,[5] and the legal remedies you can seek if you have fallen victim to such practices.[6]
Defending against Unfair Practices
It is better to learn to avoid falling victim to unfair practices than to have to later go through the struggle and process of getting a legal remedy. You can build a defence against unfair practices by learning how to identify and walk away from unfair deals.
Identifying Unfair Practices
The first and most important step in dealing with such practices is knowing what they are. Simply put, unfair practices are legally defined as practices which:
- May reasonably cause consumers to be deceived or misled,
- Make a false claim; or
- Take advantage of consumers if the consumer is:
- not in a position to protect their own interests; and
- not reasonably able to understand any matters related to the transaction (e.g. the language or the effect of the transaction).[7]
There are many types of unfair practices, which can be identified through these key characteristics. The Second Schedule of the Consumer Protection (Fair Trading) Act (“CPFTA”) contains a non-exhaustive list of acts which are legally considered unfair practices.[8] The following are some examples of unfair practices.
Causing Consumers to be Deceived or Misled: Advertisements
Advertising a product or service in a way that has a misleading or deceptive effect on a reasonable consumer has been identified as an unfair practice in the case of Freely Pte Ltd v Ong Kaili (“Freely Pte Ltd”).[9]
In the case of Freely Pte Ltd, a business promoting an options trading course stated in the course of their advertising that the conductor, Dr Chiang, was a PhD holder in options trading.[10] However, Dr Chiang’s PhD was not from an accredited university.[11] At the Small Claims Tribunal, the Referee held that reasonable consumers would have thought that Dr Chiang had a PhD from a credible university, and consequently, was an academic expert on options trading.[12] As his PhD was not obtained from an accredited university, the statement was held to be misleading, and the business had engaged in an unfair practice.[13] The High Court agreed with this decision.[14]
Making False Claims
False claims involve businesses lying about the goods and services they sell, such as:
- claiming that their goods and services have certain characteristics, e.g. uses, benefits, or ingredients that they do not have;[15]
- claiming that their goods and services are of a particular standard or quality which they are not;[16] or
- lying about the history, or use of a good.[17]
Taking Advantage of Consumers: Undue Influence
Exerting undue pressure or influence on consumers to enter into business transactions takes advantage of consumers and is an unfair practice.[18]
For example, aggressive sales tactics and pressure selling are ongoing problems in the beauty industry, and the Consumer Association of Singapore (“CASE”) has received numerous complaints from consumers.[19] In one case, two sales persons pressured an elderly lady to buy S$5,000 of beauty products by making her sit through two hours of persistent promotion.[20]
When shopping, consider how you are being treated. If a salesperson is preventing you from leaving the store or overly persistent in encouraging you to make a purchase, it is likely that the business is using pressure sales tactics. Finally, before purchasing, think about the contractual terms being offered and whether they are fair to you.
Walk Away from Unfair Deals
Once you have recognised an unfair practice, resist making financial commitments and exercise your right to walk away.[21] CASE recommends that when faced with deals with unclear terms and aggressive sales tactics, be polite but firm in refusing.[22] Leave the premises whenever feeling uneasy, overwhelmed, or intimidated by sales pitches.[23] If you are restrained from leaving, you can, and should, call the police for help.[24]
You can also avoid unethical businesses by choosing where to shop more carefully. For instance, generally, CaseTrust Accredited businesses which display the CaseTrust logo are reliable, as they are required to commit to maintaining good business practices.[25]
Legal Remedies for Victims of Unfair Practices
If you have suffered loss or damage due to an unfair practice, your legal options under the CPFTA are:
- negotiating with the business with the help of CASE;[26] and
- starting a lawsuit against the business, i.e., a consumer suit.[27]
In Singapore, consumers are expected to take personal responsibility when deciding to enter into a transaction, and also in seeking remedies when there are problems.[28] Thus, you must take the initiative to pursue these remedies.[29]
Negotiate with the Business
You can first consider negotiating with the business for compensation through CASE. CASE is able to facilitate negotiations with businesses for the purpose of stopping the use of unfair practices,[30] and you can seek help by making a complaint to CASE. If the business agrees, a formal commitment can be made between CASE and the business in a Voluntary Compliance Agreement not to engage in the unfair practice,[31] as well as commitments to compensate you.[32]
Start a Consumer Suit
Alternatively, you can sue the business under s 6(1) of the CPFTA.[33] To do so, you must show the court that an unfair practice had influenced your transaction with the business.[34] You must also meet the following conditions when filing your claim.
First, you can only claim for amounts involving $30,000 and below.[35] If the transaction involves more than $30,000, you will have to forfeit the additional amounts under this option.[36] Second, there is a time limit involved. Action must be commenced within two years of the later of these key dates:
- The date of the last instance of unfair practice;[37] or
- The earliest date you knew that the business used an unfair practice, including: when you first knew that the business had been deceptive, misleading, or had taken advantage of you;[38]
Finally, you can choose to sue in the Magistrate Courts, District Courts,[39] or the Small Claims Tribunal (“SCT”).[40] The SCT is an attractive option as there are no resulting financial constraints from having to hire a lawyer,[41] as lawyers are not allowed in SCT proceedings.[42] All parties will have to personally present their case.[43] Notably, suits in the SCT must be made within two years of the latest key date.[44]
Limitations to Legal Remedies
However, there are limitations to these legal solutions. First, there is no guarantee that the negotiations or a consumer suit will be successful. Negotiations are voluntary, and the result depends on what the parties are willing to agree to. You may have to make compromises in order to reach an agreement. As for consumer suits, the courts will make the final decision, and the best you can do is to try to prove your argument.
Second, it may be difficult to obtain the necessary evidence of the unfair practice to prove your argument in a consumer suit. This is especially so because businesses often take advantage of customers in the confines of a store.[45] The best evidence in such cases will likely be security camera footage, but this is not always available.
Third, even with a successful negotiation or suit, the business might refuse to comply and pay compensation. In such a case, additional legal proceedings are needed to enforce your right to compensation.[46] This means more delay in getting compensation.
Conclusion
Given the limitations to legal solutions, your best option is to build your defence. Learn how to identify unfair practices, and shop with discernment. And if unsure about whether a business is being fair, it may simply be better to walk away.
Disclaimer: This article does not constitute legal advice or opinion. Lexicon and its members do not assume responsibility, and will not be liable, to any person in respect of this article.
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to a practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.
[1] The New Paper, “Sim Lim Square’s phone scam makes headlines internationally” (7 November 2014), retrieved from <https://www.tnp.sg/news/sim-lim-squares-phone-scam-makes-headlines-internationally> (last accessed 5 May 2021).
[2] Ibid.
[3] Siau Ming En, “Jover Chew gets jail, fine for ‘audacious’ cheating schemes” (30 November 2015), retrieved from https://www.todayonline.com/singapore/mobile-airs-jover-chew-sentenced-33-months-jail-fined-2000> (last accessed 5 May 2021).
[4] Loo Wee Ling and Ong Ee-Ing, “The 2016 amendments to Singapore’s Consumer Protection (Fair Trading) Act: A missed opportunity” (2017) 36(2) University of Tasmania Law Review 15, at Part VI.A.
[5] Consumer Protection (Fair Trading) Act (Cap 52A, Rev. Ed. 2009) (“CPFTA”), at s 2(1) and s 4.
[6] Id, at s 6(1).
[7] CPFTA, at s 4; see also Second Schedule, Part 1.
[8] CPFTA, supra n 2, at Second Schedule, Part 1. See also at s 4(d): it is an unfair practice to do anything specified in the Second Schedule of the CPFTA.
[9] [2010] 2 SLR 1065.
[10] Id, at [9]–[10]. See also [2]–[3]. 48 participants of the course had initiated claims against the business at the Small Claims Tribunal.
[11] Id, at [9].
[12] Id, at [46]. The High Court upheld the Referee’s decision at the Small Claims Tribunal.
[13] Id, at [46]–[48].
[14] Id, at [48].
[15] CPFTA, supra n 2, at Second Schedule, Part 1, para 1.
[16] Id, at Second Schedule, Part 1, para 2.
[17] Id, at Second Schedule, Part 1, para 3 and 4.
[18] Id, at Second Schedule, Part 1, para 12.
[19] Consumer Association of Singapore (“CASE”), “Media Release–Beauty Industry accounts for highest number of complaints, motorcars industry complaints drop substantially” (1 March 2019), <https://www.case.org.sg/
admin/news/pdf/301_pdf.pdf> (last accessed 28 April 2021) at p 1–2.
[20] Id, at p 2.
[21] CASE, “Consumer advisory–CASE alerts consumers against aggressive pressure sales tactics in the beauty industry” (26 July 2019) <https://www.case.org.sg/consumer_guides_consumeralerts_archive.aspx?month=July
&year=2019> (last accessed 28 March 2021).
[22] Ibid.
[23] Ibid.
[24] Ibid.
[25] CaseTrust website, About page <https://www.casetrust.org.sg/About-CaseTrust> (last accessed 30 April 2021).
[26] CPFTA, supra n 2, at s 8.
[27] Id, at s 6–7.
[28] Low Gary, Enforcement and Effectiveness of Consumer Law (Singapore consumer law) (Springer International Publishing, 2018) at p. 116; see also Singapore Parliamentary Debates, Official Report (13 September 2016) vol 94 (Mr Charles Chong, Deputy Speaker): “under this amendment…consumers who are victims of errant retailers…will need to find redress through legal action that they undertake and finance themselves or with the help of CASE”.
[29] Ibid.
[30] Id, at p 117; CPFTA supra n 2, at s 8(1).
[31] CPFTA supra n 2, at s 8(1)–(3).
[32] Id, at s 8(1) and s 8(3). See also Gary Low, Enforcement and Effectiveness of Consumer Law (Singapore Consumer Law) (Springer International Publishing, 2018) at p 117.
[33] CPFTA, supra n 2, at ss 6(1) and s 7. See also Loo and Ong, “The 2016 amendments to Singapore’s Consumer Protection (Fair Trading) Act: A missed opportunity”, supra n 1, at Part V.
[34] Freely Pte Ltd v Ong Kaili at [74].
[35] CPFTA, supra n 2, at s 6(2)(a) and 6(6).
[36] Id, at s 6(3) and 6(6).
[37] Id, at s 12(1)(a).
[38] Id, at s 12(1)(b)
[39] Loo and Ong, “The 2016 amendments to Singapore’s Consumer Protection (Fair Trading) Act: A missed opportunity”, supra n 1, at Part V; CPFTA, supra n 2, at s 7.
[40] Singapore Parliamentary Debates, Official Report (13 September 2016) vol 94 (Dr Koh Poh Koon, Acting Minister of State for Trade and Industry); CPFTA, supra n 2, at s 7(1) and 7(2A).
[41] Singapore Parliamentary Debates, Official Report (25 August 2008) vol 84 at cols. 3069–3094 (Lim Biow Chuan), at col 3080; Small Claims Tribunal Act (Cap 308, 1998 Rev Ed) (“SCTA”), at s 23(1)–(3).
[42] Ibid.
[43] Ibid.
[44] CPFTA supra at s 7(2A); SCTA, supra n 39, at s 5(3)(b).
[45] See Main Text at Part II.A.(3): case of elderly lady forced to sit through a long promotion of products.
[46] Loo and Ong, “The 2016 amendments to Singapore’s Consumer Protection (Fair Trading) Act: A missed opportunity”, supra n 1, at Part V; Rules of Court (Cap 332, R5, 2014 Rev Ed) at O 45 r 1.