Protection for Customers of Home-based or Micro Businesses

22 Ms Yeo Wan Ling asked the Minister for Trade and Industry what are the legal and consumer safety nets for customers of home-based businesses or micro businesses should customers feel that they have been unfairly treated or if the businesses have wilfully misrepresented their services and products to them.

The Minister of State for Trade and Industry (Ms Low Yen Ling) (for the Minister for Trade and Industry): Mr Speaker, the Consumer Protection (Fair Trading) Act, or CPFTA in short, protects consumers against unfair practices that all suppliers, including home-based businesses and micro businesses, might have engaged in. Misrepresentation of goods and services constitutes an unfair practice under CPFTA.

Consumers may approach the Consumers Association of Singapore (CASE) for assistance in seeking redress from suppliers. CASE can represent a consumer to negotiate a settlement with an errant supplier or mediate between a consumer and an errant supplier. If negotiation or mediation fails, consumers may file a claim with the Small Claims Tribunal or seek other forms of legal redress.

In egregious cases, CASE will refer errant suppliers to the Competition and Consumer Commission of Singapore (CCCS) for investigation under CPFTA. CCCS may then apply for a Court injunction to restrain the supplier from engaging in the unfair practice. The Courts may also make accompanying orders, which include requiring the supplier to notify consumers of the injunction order and to report to CCCS any change to its business, such as a change in address.

Mr Speaker: Ms Yeo Wan Ling.

Ms Yeo Wan Ling (Pasir Ris-Punggol): I thank the Minister of State for the reply. We have seen in my constituency the blossoming of home-based businesses, especially during and after COVID-19. In response, I have seen more residents supporting such home-based businesses, sometimes, even operated by their neighbours. While the vast majority of the home-based business transactions have yielded very happy results, residents have given feedback that more balance needs to be given to help represent the consumer rights of residents should the deal go south.

As I understand it, if the home-based business is not registered with ACRA, the only way forward is through the Small Claims Tribunal and it is an online self-help platform costing up to $25.50 for a Court application. For many of the consumers, the cost could be an issue and some would appreciate assistance with the mediation process, especially if it involves a neighbour.

Given the above, would the Ministry also consider having organisations like CASE play a bigger role in safeguarding the interests of customers of home-based businesses, especially if they are not registered businesses?

Ms Low Yen Ling: Mr Speaker, I want to thank the Member Ms Yeo Wan Ling for her supplementary questions. I am very heartened to hear that in her constituency, her residents are supporting one another's home-based businesses.

I would like to clarify that home-based and micro businesses are subject to regulations like any other businesses and these businesses need to be registered with ACRA. That is an important clarification. And in the unfortunate event that the transaction goes south, like what the Member described, consumers may approach CASE for assistance to seek redress from the errant home-based businesses.

Let me give the Member a quick example. For instance, if the consumer senses that the home-based business is engaging in unfair practices, such as misrepresentation, they can approach CASE and CASE will then take in the details of the transaction and provide advice or help to negotiate on behalf of the consumer or mediate and determine if it should be escalated to CCCS. I want to assure the Member that CCCS, which is an agency under MTI, can and has the power to investigate egregious home-based suppliers under CPFTA.

Mr Speaker: Ms Carrie Tan.

Ms Carrie Tan (Nee Soon): Thank you, Speaker. I would like to check with the Minister of State whether CASE works with the Police in cases where they have multiple complaints from various consumers against the same operator or business provider. To what extent does CASE assess that this could be more than a misrepresentation but bordering on fraud for the cases to be referred to the Police for investigation? Is there a certain threshold, such as the total number of consumer complaints against a particular service provider, before it gets escalated to become a criminal fraud case?

Ms Low Yen Ling: Mr Speaker, I want to thank the Member Ms Carrie Tan for her supplementary questions. In fact, CASE works closely not just with CCCS but also with SPF. Together, CCCS and CASE do monitor, for example, sector by sector, including by company, whether they are receiving feedback for certain misrepresentations and we will follow up accordingly.

First, CASE, to represent them to negotiate or mediate and then, if need be, escalate to CCCS for further investigation.

Let me share with Ms Carrie Tan that as far as CCCS is concerned, for example, we can even follow up with the business to enter into a Voluntary Compliance Agreement (VCA) with CASE. If we feel that there are reasonable grounds to believe that the supplier/business has engaged in an unfair practice, we will ask the company to enter into a VCA. This is serious because this includes an undertaking that the business would not engage in the unfair practice and would also require the business to compensate any consumer who has suffered loss or damage as a result of the unfair practice and, in fact, we will require them to indicate that in the invoice that they issue to their customers.

Let me also share with the Member that as we investigate each case, even as we take a case-by-case basis, there are a few considerations. For example, one, the strength of evidence obtained in the investigation, whether there is sufficient evidence for CCCS to prove on the balance of probabilities that the business has engaged in unfair practice. Another consideration is the extent of consumer harm that is caused by this business' alleged unfair practice. Third is the egregiousness of the business conduct and so on. There may also be public interest concerns.

So, all these are taken into consideration comprehensively and also seriously.