'Lemon law' on defective goods to kick in from Sept

Display, discounted or sale items not exempt from new consumer rule
By Jessica Lim, The Straits Times, 10 Mar 2012

THE much-touted 'lemon law' that will require retailers to replace, exchange or give refunds on defective goods will kick in from September, after Parliament passed it yesterday.

The Consumer Protection (Fair Trading) Act will work this way:

First, the consumer can get the retailer to repair or replace the defective item. If this is not done 'within a reasonable time or without significant inconvenience' to the consumer, he can choose to either keep the item but demand a discount, or return it for a full refund.

If the product 'is found to be defective within six months of delivery, the flaw will be assumed to be inherent, unless the retailer can prove otherwise'.

In moving the legislation, Minister of State (Trade and Industry) Teo Ser Luck said that such laws would bring Singapore 'in line with the standard of consumer protection in international jurisdictions and assure both locals and tourists that the products they buy are of good quality'.

'It will encourage good business practices, and favour good retailers... this will in turn raise the standing of the retail industry in Singapore,' he added.

The Consumers Association of Singapore (CASE), which has been lobbying for a lemon law since 2005, received 1,793 complaints of defective products last year, up from 1,652 in 2009.

Members of Parliament welcomed the changes, but had questions and suggestions on implementation.

Mr Lim Biow Chuan (Mountbatten SMC) asked if retailers could refund customers through cash vouchers, or opt out of the law with a contract or display sign during sale periods.

Recounting his own experience with a faulty mobile phone that continued to turn itself off despite numerous repairs, he also asked if consumers could demand compensation for time and transport.

Noting that settling disputes in courts could involve 'significant costs and time to the consumer', Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) suggested that CASE be allowed to make awards up to certain amounts. The body, he said, could also amass a database of claims so that unscrupulous retailers could be highlighted.

Mr Teo said that the law had to be 'more open, flexible and dynamic, rather than prescriptive', given the diversity of goods in the market.

He also clarified that retailers cannot deny consumers their rights under the law 'by stipulating that it is a sale, display or discounted item that cannot be refunded or exchanged'.

The ministry, he said, will be working closely with CASE till the law's implementation to educate the public and retailers.

'A review is possible to make it more effective as we evolve,' he said, adding that the law is just the start.

'At the end of the day, what the law seeks to do is not to remove all lemons... but to encourage transparency and good business practices.'

Even as the law was passed, retailers like Mr Jimmy Fong, the chief executive of IT chain EpiCentre, still have doubts.

'How would we know if the item broke after wear and tear, or was faulty... We just have to wait and see. We will have to find out more about this.'

Six-month period for defects

NOW

Shoppers who buy a faulty item have no legal right to demand a replacement, exchange or refund, even after numerous repair attempts.

If the dispute is taken to court, the retailer often passes the buck to others, such as the manufacturer or supplier, leading to protracted court cases.

BY SEPTEMBER

If a product is proved to be defective within six months of delivery, the customer can ask the seller to 'repair or replace the goods' within a 'reasonable time' and 'without causing significant inconvenience' to the consumer.

If not, the consumer can keep the product but demand a discount on the amount paid, or return it for a full refund.

A retailer who does not want to repair or replace a defective product, or give a refund, has to prove that the product was not defective when sold.

If all else fails, the dispute can be brought to the Consumers Association of Singapore for mediation or to court.

Q&A: Repair or replace: Retailer decides

MEMBERS of Parliament had questions about the new lemon law and Minister of State (Trade and Industry) Teo Ser Luck answered.

Can consumers demand a replacement for a faulty product without getting the product repaired first?

A: No. It is the retailer's decision to either replace the product right away or send it for repairs first, depending on his own cost calculations.

Can retailers replace a consumer's defective product with a used or refurbished one?

A: Yes. Replacements can be made with items that are not new as long as they are of the make, quality, model and condition that is expected. The replacement offered can take into account wear and tear due to usage by the consumer.

Customers who are dissatisfied with the replacement can keep the item and ask for a price reduction or return it for a full refund.

Can a retailer charge a consumer for costs incurred for repair?

A: No. Retailers must bear costs incurred in providing repairs - for example, labour and material costs.

Can retailers give out refunds in other forms, say, a store voucher?

A: No. Partial and full refunds must be made in cash.

Does the law cover transactions made online?

A: Yes, for all sales - including those with foreign-based online retailers - concluded in Singapore.

However, it may not be possible to enforce a judgment against overseas retailers with no presence in Singapore.

Are store-bought pets covered under the new lemon law?

A: Yes.