Amendments Proposed to Enforce and Enhance Consumer Protection in Singapore

June 24, 2016

The amendments to the Consumer Protection (Fair Trading) Act allow more aggressive and invasive action to be taken against errant businesses engaging in unfair practices.

The Ministry of Trade and Industry, Singapore, recently proposed certain amendments to the Consumer Protection (Fair Trading) Act (CPFTA) to enhance the enforcement and investigative powers contained therein. The key amendments include the following:

  1. The designation of the Standards, Productivity and Innovation Board (SPRING) as the primary investigative and enforcement body.
  2. The conferment of certain investigative powers on SPRING, such as the power to
    1. conduct investigations if there are reasonable suspicions of a supplier engaging in or a person knowingly abetting an employer of an unfair practice;
    2. demand and require production of documents, articles, or information;
    3. enter business premises with or without a warrant;
    4. take copies or extracts of documents as evidence; and
    5. seize and detain goods and conduct tests on them.
  3. The expansion of the court’s power under s9(4) of the CPFTA to grant orders additional to an injunction or declaration, including an order to require publicity of the injunction against the business at its own expense. This appears to be in response to instances in which Singaporean businesses avoid injunctions by operating under a distinct corporate identity.
  4. The removal of the Injunction Proposals Review Panel (IPRP), which gives SPRING full discretion to apply to the court for injunctions (the IPRP presently reviews injunction applications by the Consumers Association of Singapore [CASE] and the Singapore Tourism Board [STB] to ensure that only serious cases are filed in court).

These amendments are expected to align Singapore’s consumer protection framework with other jurisdictions in terms of enforcement and investigative rigour. The current consumer protection framework under the CPFTA relies heavily on mediation and applications for injunctions or declarations made through CASE and STB. Yet these bodies do not possess investigative powers and face difficulties procuring evidence in support of their applications. In comparison, major economies such as Australia, the United States, and the United Kingdom have all conferred on their consumer protection agencies significant investigative and enforcement powers.

For example, the Australian Competition and Consumer Commission already has the power to enter business premises under warrant or by consent to seize goods, documents, and information as evidence. Domestic and European Union enforcers also possess the power to enter premises in the United Kingdom without warrant to seize evidence on grounds of a reasonable suspicion of a breach or infringement. In the United States and Australia, individuals may be compelled to produce documents to their respective commissions, similar to a subpoena, with such evidence possibly being taken under oath or declaration.

Retail businesses and other businesses that deal with consumers should take note of these enhanced enforcement measures. If passed, businesses should expect more aggressive and active enforcement by SPRING. A corollary of the additional investigative powers is necessary for businesses to maintain clear documentation of and transparency in dealings with consumers. Businesses that have not addressed prohibited unfair practices should refer to the CPFTA and take preemptive action to ensure that all employees are compliant. Such actions will aid in avoiding liability to injunctions and the reputational harm if publicity orders are made.

The draft bill was put to a public consultation from 16 May to 15 June 2016.