Financial sector must play fair

Aug 26, 2008
Financial sector must play fair
By Jessica Lim

THE days of consumers being ripped off by unscrupulous finance-
industry players are numbered.

Parliament yesterday passed an amendment to the Consumer Protection
(Fair Trading) Act to bring the financial services sector under its
scope.

It also provided for a longer cooling-off period for timeshare-
related deals and motor vehicle sales. As the customer mulls over his
purchase or decision, the sellers have to inform them of their
rights.

The Act will be extended further by 2010 to cover moneylenders and
pawnbrokers.

Introduced in 2004, the Act is an avenue for consumers to take action
in the face of unfair practices, from dodgy second-hand car sellers'
tricks to high-pressure sales tactics.

Another change: Consumers can claim up to a maximum of $30,000, an
increase from the existing $20,000. Also, they can take up to two
years to file a claim, an improvement on the one-year limit.

These changes come amid increasing complaints to the Consumers
Association of Singapore (Case). Last year, it received almost 750
complaints linked to the Act.

Minister of State for Trade and Industry Lee Yi Shyan highlighted
them yesterday when the amendment Bill came up for debate in
Parliament.

But MPs like Madam Ho Geok Choo (West Coast GRC) wanted more. They
asked for, among other things, a cooling-off period for beauty
service transactions and an even higher claim amount.

Their suggestions were not taken up.

Mr Lee's explanation: The Act has provisions for consumers to seek
redress, making the cooling-off period unnecessary for the beauty
industry.

The claim ceiling is also enough, he said, because the Act is meant
to cover only small claims from vulnerable consumers with limited
ability to seek redress.

The move is a big victory for Case, which wants financial services to
be included even before the birth of the Act.

Its vice-president Lim Biow Chuan (Marine Parade GRC) expressed
gratitude that the Government took heed of consumers' repeated
requests.

He said: 'Most of these complaints related to the aggressive pushing
of financial products to the elderly or illiterate consumers who may
not appreciate fully the nature of such products or the risks
involved.'