“Lawyers and members of parliament say more safeguards should be put in place for the sale of prepaid packages, though they acknowledged these safeguards should not go as far as to stifle enterprise” (MPs, Lawyers Call for More Safeguards for Consumers Buying Prepaid Deals, Kelly Ng).
In the call for stronger consumer safeguards – after the abrupt closure of gym chain California Fitness, leading nearly 400 former customers to contact the Consumers Association of Singapore (Case) “to seek advice on getting refunds of membership fees paid” (TODAY, Jul. 23) – remarks by members of parliament (MP) lack one thing: specificity. MP and Case president Lim Biow Chuan said that consumer protection is inadequate, but the Ministry of Trade and Industry has not gone beyond its remark to “review the feedback on prepayment protection”. MP Liang Eng Hwa wants to protect consumers without stifling “promising enterprises”, but neither posited specific recommendations nor specified how a balance could be struck.
For too long, recourse through Case or the Small Claims Tribunal has been deemed to be ineffective – to the extent that Case, for instance, has often been treated with derision and scepticism – especially for those with smaller claims. It also feels like a long time since the government has taken meaningful policy action, because of closures in other service industries, such as spas, beauty parlours, and wedding salons. CaseTrust accreditation in some sectors may have provided greater transparency and raised standards of those businesses which have chosen to opt in, yet its overall effectiveness across different industries is not as clear. What moreover is not clear is whether such accreditation should be expanded to others too.
And as Singaporean consumers look forward to more specific recommendations by the government, they should also understand that suggestions such as insurance coverage and restrictions on the value of prepaid packages would most likely lead to higher prices, when operators pass on the additional costs. In this vein, perhaps policymakers should also consider endeavours to raise levels of financial literacy, so that consumers are cognisant of the inevitable risks of prepaid packages, the predatory practices – in particular, if accreditation is not available, or not taken up – of companies, and even the dangers of credit card payments. Constant references to “caveat emptor” would amount to little, if consumers do not have the necessary information, or if they do not see the need to seek out information on their own.
A version of this article was published in TODAY.