Mr Speaker, Sir, I rise in support of the Bill that will help to protect consumer rights better and ensure better equity in retail transactions, in the case of a defective product. This Bill will also see retailers and suppliers of goods taking a more responsible attitude in the quality of their merchandise. All these will culminate in a better reputation for Singapore as a retail hub in the region.
I would now like to touch on several issues and ambiguities that are not fully covered in the Bill.
To begin with, the definition of what makes a good defective is very much left to open interpretation. The seller and buyer will surely take a different view on this and claims or refunds will take time to settle without a clear definition even though the burden of proof now lies with the seller. For second-hand goods, it would be an even more tedious process in establishing right and wrong. Taking for example of a purchase of a second-hand car, a friend of mine shared that a few months after purchase, problems started erupting and the new owner has to spend monies in replacing the air-conditioning system, lights, brake pumps and brake pads etc. At the point of purchase, one would never imagined that one has to fork out so much more since all these malfunctioning parts to be replaced have never been mentioned in the first place. The worse thing is that they all happen progressively in which no physical inspection can help to identify. In the case of the car air-conditioning, the new owner was just told that it was a bit “weak” and there were no further explanations. In the new law, I suppose we would be able to ask for a replacement car of similar make or model or to receive a further discount? However, I think it is a weak case. First, he accepted the fact that the car is having a “weaker” air-conditioning system. Second, a second-hand car would surely have come under prolonged use and its parts are more liable to break down or be worn out. I am not sure how realistic it is to ask the second-hand car dealer to guarantee that all the parts would be in tip top condition? Third, and most importantly, the car is still in good driving condition. Would it be regarded as a defective product since the car can still be driven? For big-ticket items like a car, it would be far better to state specifically in legal annexes what would be the conditions of exchange and how the refund/discount policy can be like. To place all baskets of goods in the same coverage of the law seems to be a simplistic approach. It is more likely for the second-hand car owner to settle the repairs first rather than to wait for a car of a similar make, model and mileage to be exchanged. In practicality, it probably will not happen at all.
The simplicity of the laws of exchange without considering the nature of products sold is another shortcoming. I worry for sellers who may face a high rate of returns and refunds. This will directly add on to costs for the businesses and impact on them financially. Taking the example of apparel, this is probably one difficult category of product to establish the nature of defects for it does not just concern size and fitting but also comfort and aesthetics. Apparel can shrink after repeated washing and hence the size does not fit or becomes tighter. The colors on our shirts and dresses can also fade off after some time. Would all these therefore fit into a defective product? The seller can argue that perhaps the wrong washing method is deployed and hence causing the “defect”. The consumer can continue to insist that this is not the case. How would the tribunal be able to establish the process of law in this case? In a most ludicrous situation, the consumer may have added on to their waistline causing their clothes not to fit anymore. Would this require for sellers to have an exchange of goods when these clothes are brought back to them within six months of purchase? Should the seller therefore record every single customer and every single waistline to ensure the veracity of the purchase? I am not saying that all our consumers are unreasonable. In fact, unreasonable customers would be a minority. However, from this simple example, we can see the challenges in which the law can be exercised and be potentially abused by consumers.
Through the earlier two examples, other than the ambiguities of what constitutes a defect, it is clear that another flaw of the Bill is the one-size fits all approach in covering exchanges, discounts and refunds for all goods. On the point of equity, it may be useful to consider different time periods for different categories of goods. For example, defects in a car may take more than six months to manifest as compared to apparel. Conversely, a six months period for apparel may be too long and subject the fabric to higher wear and tear or damage.
The other area of ambiguity is on what really constitutes a proper exchange and refund of defective goods. Some retailers may just replace the product with a refurbished product rather than a new product that works. Such a refurbished product will usually be sold at a discounted price so the point of equity cannot be taken as the same. There are no safeguards in place in the law to stipulate how an unscrupulous retailer will be punished if they resort to pass off used products as new replacement products. I am shocked at a recent case that one customer of a major mobile subscriber has received a used phone with the contacts of strangers in the inbox when this phone is passed off as a new phone. The broad wording of the law also seems to suggest that the retailer would have the discretion to provide an exchange, refund, discount or even to send the defective product repeatedly to the service centre rather than to meet the customer’s specific request.
The implementation of the new law also has to take into account new shopping trends such as online shopping. A recent article in The Straits Times on 3 March highlighted on how more and more people have taken to shop online for their furniture. So what happens when the furniture they have ordered and paid for by their credit cards is not the same as ordered or even delivered? Would the new law be able to extend its reach even beyond borders? Many of the online furniture stores may be based overseas and even the local ones would have their manufacturer suppliers abroad. It is difficult to see how a replacement or refund can be sought readily if the seller cannot be located in Singapore. If there is a differential treatment based on whether the seller is local or foreign, would the law be fair to our local sellers?
On online payment itself, I thought there is a critical need to build safeguard mechanisms online to deter mistaken purchases. This is because the products delivered or received may not be fully representative of what is seen online or the pre-supposed functions are not even there. Sometimes, it can even be the wrong click of the computer mouse. I have personal experiences of online purchase once made is almost impossible to reverse or seek a refund. The process of filling in appeal letters to banks to rescind online payment is usually tedious and onerous. In most occasions, the appeals are unsuccessful.
Many of the online purchases may not feature physical goods but services instead. The new law would not be able to cover this area since the definition is strictly on physical goods. There are a broad range of services that consumers purchase such as spa packages and time-share travel packages which will not be covered in the new law. We know their notorious reputation for failing to deliver what is promised, both online and offline. Yet, in the current amendments, we seem to be content in letting go of this category of purchases that has brought about so much bad press to us.
I am also fairly concerned about the spike in complaints about online group discount purchases. How can we ensure that retailers deliver their end of the bargain? I am of the opinion that stronger measures need to be put in place to protect unknowing consumers who may have purchased products at the spur of the moment attracted by the price discount alone. Are we able to shut down these online platforms should the complaints escalate further?
The introduction of the lemon law to me is just a start in educating consumers on their rights and how to exercise them. The scepticism amongst consumers is understandable as the new laws will not remove all the lemons. It would be far better to promote a retail environment where exchanges are made without any questions and on the spot and also a consumer culture which thrives on information sharing. This is already happening in the United States, Japan and Europe. I hope there will be the day where the law will not be needed to make a buyer and seller pleased with the transaction that has been made.
Thank you.
