(Delivered in Parliament on 13 September 2016)
Madam Speaker the Consumer Protection Fair Trading Amendment Bill seeks to empower SPRING Singapore to become an enforcement agency to investigate, obtain and enforce Court injunctions against errant retailers. The amendments aim to deter errant retail practices and to publicise the occurrence of such practices so that consumers are aware of which retailers have received injunctions.
Consumer protection is important for many reasons. Not only is it the right thing to do for the sake of fairness. It also yields economic benefits. It enhances the Singapore brand for tourism. Moreover consumer protection, by reducing information asymmetry and imbalances in power between consumers and retailers, also enhances the efficient operation of markets.
Being pro-market does not mean being pro-business but striking the right balance between being pro-business and pro-consumer.
So this is clearly a step in the right direction.
In our GE2015 Manifesto, the Workers’ Party called for the government to be more proactive in seeking court injunction orders against errant retailers and to also provide more resources to the government bodies tasked with this role.
However I do have a number of clarifying questions and suggestions.
Firstly, under this amendment and according to the FAQ released by MTI in May this year, SPRING will not be responsible for providing redress or compensation to consumers who are victims of errant retailers. Rather they will need to find redress through legal action that they undertake and finance themselves, or with the help of CASE. This is a huge concern because many consumers would shrink from taking legal action, even in the Small Claims Tribunal, due to their lack of experience with the legal system and concerns about time and costs.
Will CASE be sufficiently resourced to assist all consumers who are in need of help to pursue a claim of redress against an errant retailer? Will the kind of assistance that can be provided and the sequence of steps that can be expected when one files a request for such help be well-publicized? This is seen on the websites of some of the Australian state consumer protection agencies like NSW Fair Trading, for example.
Secondly, an enhanced enforcement regime presupposes that there are clear guidelines to retailers about what is and is not considered unethical or errant conduct, and that measures are taken to educate retailers about their obligations. Unfair practices are defined in the second schedule of the CPFTA. However many retailers would not be aware of these provisions or how they are operationalized in practice. So my first question is – how will retailers be educated about their responsibilities under the CPFTA? Which agency is tasked with this responsibility?
Thirdly, consumer protection depends on consumers being aware of their rights and taking action when they experience errant conduct. Which agency will be responsible for educating consumers and how? In this context, I suggest that SPRING consider requiring mall operators to display consumer protection posters or signs to remind consumers of their rights.
Fourthly, beyond just obtaining injunctions against errant conduct, will SPRING or another organization under MTI look into requiring merchants to implement broad-based pan-industry measures that are fairer to consumers? For example in Australia, the Consumer and Competition Commission requires grocery stores to display unit prices clearly for the produce they sell. The Commission also defines certain types of contract clauses as oppressive and hence illegal. Will this kind of proactive, preventive groundwork also be done in Singapore? I suggest that an agency – which could be SPRING, the CCS or another agency – be tasked to proactively require whole industries to adopt fair consumer practices in this way.
Fifth, SPRING is not primarily an investigative agency. How will the officers of the new department be trained in law enforcement techniques? Will SPRING draw learnings from any other consumer protection agencies in developed countries which have a long track record of operation?
Sixth, how will SPRING approach the issue of offshore online retailers who may not have a legal entity in Singapore and where legal action in the Courts may be problematic? Such retailers can be expected to take up a larger share of e-tailing revenues in the future as new platforms emerge to connect not only large vendors but also mid-sized vendors in countries like Japan, Korea, the USA and Australia with Singapore consumers. I wonder if there is a role here for the International Consumer Protection and Enforcement Network or ICPEN.
Seventh, will there be an escalating scale of severity of action taken in the case of repeat offenders – who may be companies or individuals who set up successive companies to cover their tracks? This may be necessary to create a strong deterrent against those who are egregious offenders who feel that they can prey on certain vulnerable groups of customers.
And finally, will SPRING’s new enforcement powers apply to products sold via legitimate Multi-Level Marketing (MLM) schemes or via illegitimate pyramid schemes where there may be no retailers with shop-fronts? MLM is a substantial industry. Including MLM under this framework will help the legitimate MLM industry to protect its reputation, to grow and to contribute to the economy.