So, you’ve set up an ecommerce store to sell products online to consumers in Singapore. Although you’re selling your products online, you’re still subject to the Consumer Rights Act of Singapore, properly known as the Consumer Protection (Fair Trading) Act. In effect since 1 March 2004, the act is designed to protect customer rights in the country.
The Consumer Rights Act of Singapore protects local customers from unscrupulous sellers and faulty products in Singapore. The act lists the various customer rights that Singaporean buyers are entitled to, and the regulations sellers have to abide by while dealing with customers in Singapore. These rights apply whether they’re buying from a brick-and-mortar store or an online shop.
As an online business owner, it’s helpful to understand the Consumer Protection (Fair Trading) Act and the regulations around consumer rights in Singapore. It'll help you maintain a good reputation with your buyers. Let’s take a look at how the Consumer Rights Act of Singapore works.
What does the Consumer Rights Act Singapore cover?
The Consumer Protection (Fair Trading) Act was created in 2004 to protect Singaporean customer rights and prevent sellers from engaging in unfair practices or selling defective goods. Notably, the act only covers transactions between a business and a customer, also known as B2C transactions. As such, it does not offer any C2C or B2B consumer rights. However, both local Singaporean customers and tourists who purchase goods in Singapore are entitled to protection under the act.
One of the main purposes of the Consumer Rights Act of Singapore is to protect customers from sellers who engage in unfair practices. The act lists 24 unfair practices. If a business engages in any of these, customers have the right to sue. As such, it’s important that online retailers are aware of what these unfair practices are. They include:
- Saying that the goods have ingredients or benefits that they don’t have.
- Claiming that the goods are new when they have been damaged or altered.
- Charging a higher price than initially quoted, unless the consumer has agreed to this in advance.
- Exerting undue pressure.
- Claiming that a discounted price will only be available until a specific date, when the seller knows this price will be available for a much longer period.
In addition, the Act protects customer rights in cases where a seller:
- Make a false claim.
- Does or says anything, or omits to do or say anything, that can reasonably cause the buyer to be deceived or misled.
- Takes advantage of a consumer with full knowledge that the buyer is either unable to protect their own interests or cannot reasonably understand the nature, language, or effect of the transaction.
Direct sales contracts and other regulated contracts
Singapore’s customer rights act also covers several types of regulated contracts, including direct sales contracts. Accordingly, customers have the right to cancel these within five days of entering the contract.
There are three types of regulated contracts covered by the Consumer Rights Act of Singapore. These are:
- Direct sales contracts: For example, when an insurance agent visits an office to sell insurance packages.
- Long-term holiday product contracts: Such as when a consumer enters into a contract, typically of more than one year, with holiday clubs to receive discounts on holiday packages or accommodation for trips.
- Time-share contracts or time-share-related contracts: With time-share contracts, a person invests money in a vacation property to use it for a specified number of days each year. Time-share-related contacts are used to dispose of those days if the investor does not want to use them.
When a regulated contract is canceled, the following rules apply:
- The contract and all of its terms are no longer enforceable.
- If the customer has paid out any money, the seller has to repay the exact amount within 60 days of the contract being canceled.
- Customers have to return the products or items they received once they have received a refund.
- Any security provided by the customer—such as a bank guarantee—becomes void, and any property must be returned to the customer.
What is the Lemon Law?
Part three of Singapore’s consumer rights act is better known as the “Lemon Law.” Introduced on 1 September 2012, the law essentially protects customers against unsatisfactory goods. Under the Lemon Law, sellers are legally bound to provide goods that are in no way damaged or defective—they must be of satisfactory quality and performance. It also applies to goods that do not fit their descriptions or serve their purposes.
When does the Lemon Law apply?
The Lemon Law applies to all types of general consumer goods purchased in Singapore. This includes—but is not limited to—clothing, electronics, furniture, and books. Second-hand goods such as cars are also covered; these are decided on a case-by-case basis depending on the product's age and price at the time of the sale. However, the law does not cover transactions relating to houses, land, rented, or leased goods. Similarly, it does not apply to any services and does not have oversight over C2C or B2B consumer rights.
Of course, customers also have to prove the product in question was damaged or defective at the time of purchase or delivery. The customer has to show that they did not do anything to spoil the product. As such, customers will not receive any remedies if:
- They damaged the item.
- The item was damaged due to misuse or mishandling.
- The goods were damaged while the customer or their agent tried to repair them.
- The customer was told about any defects or damages before they purchased the item.
- The consumer changed their mind after the purchase.
- The damages or defects are due to regular wear and tear.
What happens when a customer files a claim under the Lemon Law?
To enforce the Lemon Law, a customer must file a claim on their defective product within six months of purchasing it. Singaporean buyers can do this through the Consumers Association of Singapore (CASE); tourists who made purchases in Singapore should file their claim initially through the Singapore Tourism Board. Any customer may also file a claim with the State Courts of Singapore.
Once the claim has been made, the relevant authorities will look into the case to decide an outcome. If the claim is decided in the customer’s favor, then as the retailer, you will have to provide compensation. You may be obliged to provide a replacement item, full refund, or repair the product in question.
How do I follow the Consumer Rights Act Singapore?
When you run an online shop that sells goods to consumers, you have to take responsibility for the items that you sell, even when you don't make the products. You should do everything possible to ensure that you abide by the Consumer Protection (Fair Trading) Act and protect your buyers’ customer rights. Here are five ways you can do this.
1. Ensure that your products are not defective
Before selling your products, check that they’re not defective or damaged. While you can’t guarantee that every single item will be in perfect condition, you can check your stock to make sure you’re satisfied with the quality before you ship items to your customers.
Of course, you don’t have any control over what happens during delivery. But, ensuring items are in good condition before they ship reduces the chances of a buyer invoking their customer rights and asking for a replacement or activating the consumer rights Singapore refund policy.
2. Have terms that state the conditions of repair, replacement or refund
While a customer’s rights include repair, replacement or refund of a defective product, you can state conditions for how the repair or replacement is given. These can include naming official representatives for repairs, limiting how many times repairs or replacements can be made, and who covers the cost of sending the defective item for a repair, replacement, or refund.
3. Don’t make false claims
Making a false claim about what your product can do or consists of is the easiest way to flout Singapore's Consumer Rights Act. Make sure you can substantiate any claims with facts, figures, and tests.
4. Don’t use language that will deceive or mislead
When describing your product, keep the language simple and use terms that consumers can understand. Don’t use terms that might be open to misinterpretation or foreign terms that require translation. Also, don’t omit important information about the product such as dimensions, recommended ages for use, and recommended duration of use.
5. Protect your consumer’s privacy
While the customer’s right to privacy is not protected by the Consumer Rights Act of Singapore, it’s good practice for sellers to ensure that their customers’ information is always protected. In Singapore, the consumer privacy act is known as the Personal Data Protection Act (PDPA) and protects customers’ data privacy.
As Singapore’s official consumer privacy act, the PDPA outlines various requirements for collecting, using, disclosing, and caring for personal data in Singapore. This covers all personal data, whether it’s stored in electronic or non-electronic formats.
According to the act, an organization shouldn’t collect, use, or disclose an individual's personal data beyond what is reasonable for providing a product or service to the customer. This means that, beyond obtaining their address and telephone number to complete the sale and delivery of their product from your shop, you are not entitled to collect personal details from the consumer.
In addition, as part of the consumer privacy act of Singapore, a business shouldn’t retain a customer’s personal data once the purchase order is fulfilled. You are also not permitted to disclose the collected personal data to anyone not directly involved in fulfilling the purchase order.
FAQs about consumer rights in Singapore
What happens if I refuse to replace, repair or refund a defective item?
What if the consumer refuses my offer of replacement, repair or refund?
What happens if my database is hacked and my customers’ personal data is compromised?
Does the Consumer Rights Act of Singapore have any subsidiaries or amendments?
- Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations 2009
- Consumer Protection (Fair Trading) (Opt-Out Practices) Regulations 2009
- Consumer Protection (Fair Trading) (Regulated Financial Products and Services) Regulations 2009
Start your online business with Shopify
Now that you have a better understanding about the Consumer Rights Act of Singapore—or the Consumer Protection (Fair Trading) Act—you’re ready to start your ecommerce business. If you’re looking for an easy way to start, you can do so with Shopify.
The platform gives ecommerce business owners many useful tools, including a logo maker, business name generator, and terms and conditions generator. It also allows you to sell, market, and manage your ecommerce operations easily, all for a small monthly fee.