Parliament speech on the ‘Lemon Law’

I welcome the amendments to the Consumer Protection (Fair Trading) Act and the Hire Purchase Act to include so-called ‘Lemon Law’ provisions. This is a progressive step to bring Singapore’s consumer protection regime up to speed with other developed countries like Japan, the US, Canada, Australia, and the EU.

Parliament

Speech during the debate on the amendments to the Consumer Protection (Fair Trading) Act and Hire Purchase Act, on 9 March 2012.

————

Mr Speaker,

I welcome the amendments to the Consumer Protection (Fair Trading) Act and the Hire Purchase Act to include so-called ‘Lemon Law’ provisions. This is a progressive step to bring Singapore’s consumer protection regime up to speed with other developed countries like Japan, the US, Canada, Australia, and the EU.

If executed well, the Lemon Law could help weed out poor practices by a minority of retailers in Singapore, and reward those with good practices. This could lead to improved customer service and greater customer satisfaction.

In addition, as poor retail practices are weeded out, it will inspire more confidence among both local consumers and the millions of tourists who arrive at our shores each year to shop. They will be more at ease to buy goods here, without worrying about having limited recourse should the goods turn out to be defective. In turn, we could see fewer tourists leaving Singapore with a bad taste in their mouth because of unpleasant shopping experiences.

Sir, I have a few questions about the proposed amendments, as well as some suggestions on how the execution of the Lemon Law could better achieve its objective of protecting consumers.

Section 12C states that the transferee may require the transferor to repair or replace the goods. Can the consumer ask for a replacement without attempting a repair? This could make it much more convenient for the consumer, as he would not need to make multiple trips to the service centre.

The proposed Section 12D(3) states that if the customer rescinds the contract, any reimbursement due to him may be reduced to take into account the use he has had of the goods since they were delivered to him. I note that based on existing common law, the court has sometimes decided not make any deduction for use because of the inconvenience the buyer has already suffered in having to deal with the defective goods .

This being the case, may I ask the Minister of State what will be the basis for calculating this reduction of the quantum of reimbursement? Will the reduction be for only the duration of use until the first repair attempt, or for the entire duration the product has been in the customer’s possession even if it included multiple failed repair attempts in between?

The lemon laws in many states in the US specify that the reduction of reimbursement is for the consumer’s use of the vehicle only until the first repair attempt, because it recognises that the consumer’s continued use of the lemon is not a valuable benefit to him.

I also have concerns about whether a minority of consumers might abuse the Lemon Law to make dishonest claims. This could lead to an increase in retailers’ costs, which could get passed on to other consumers. Does the Ministry intend to introduce any measures, including punitive measures, to discourage frivolous customer claims?

Could the Minister of State also explain what the rationale was for specifying the 6 month period after the purchase of the goods, during which the customer can exercise his rights under this law? Why 6 months and not more or less?

Sir, I now come to the implementation of the Lemon Law. I believe much will need to be done to educate consumers about their rights under the Lemon Law. Without adequate public education, consumers may not reap the full benefits of the amended law.

There could be several situations where consumers’ lack of understanding of their rights may disadvantage them when dealing with savvy retailers.

The first is a situation that may arise when retailers get their customers to sign away their rights through a contract. At the point of the retail transaction, customers often do not have the time to read through the fine print before signing and completing the purchase. Section 13 of the Act states that the provisions of the Act shall prevail notwithstanding any agreement to the contrary. However, if the customer were to return to the retailer and request repairs, replacements or a refund, the retailer may simply pull out the contract and turn down the request. If the customer is not aware of his rights under Section 13, he would naturally assume that since he had signed the contract, he has no further recourse.

Secondly, some consumers may have difficulty distinguishing between the manufacturer’s warranty and their rights under the Lemon Law. Many goods sold in Singapore, especially consumer electronic goods, come with a warranty from the manufacturer. The retailer requires the consumer to approach the manufacturer directly to rectify any defects within the warranty period.

However, if the manufacturer does not fulfil its agreements under the warranty, or the warranty is shorter than 6 months, the consumer may not be aware that he still has the right to go to the retailer to request remedies for the defective product.

It is important for consumers to be informed about the avenues available to them if they are unsuccessful in claiming remedies from retailers for defective goods. Since many shoppers in Singapore are tourists, it may be ineffective to run expensive television ad campaigns. Instead, clear signs could be required to be displayed at all retail outlets highlighting a telephone hotline and a website that shoppers can call or visit to learn about their rights as consumers, and the avenues for recourse under the Lemon Law.

The website could include a “frequently asked questions” section to clarify consumers’ and retailers’ rights and responsibilities in plain English, with appropriate translations.

In addition, the relevant authority could require that the hotline be printed on the receipts issued by retailers, for shoppers’ easy reference.

Retailers too, should be educated about their obligations under the amended law. If not, many of them might continue with their old practices and cause much confusion and frustration among consumers.

In conclusion, I believe the amendments tilt the balance more in favour of consumers and this will lead to Singapore becoming a more attractive retail destination. However, the situation should also be closely monitored to ensure that this does not inadvertently lead to higher business costs, which could get passed on to the very consumers that this Bill seeks to protect.

Mr Speaker, with that, I support the Bill.

Author: Gerald Giam

Gerald Giam is the Member of Parliament for Aljunied GRC. He is a member of the Workers' Party of Singapore. The opinions expressed on this page are his alone.

7 thoughts on “Parliament speech on the ‘Lemon Law’”

  1. Hi Gerald, I do enjoy the way you have framed this specific issue plus it does. Thank you for this excellent piece and though I can not really agree with the idea in totality, I value the viewpoint.

Comments are closed.