Consumers lost $2.37m in 2019 after firms suddenly shut, Latest Singapore News - The New Paper

Consumers lost $2.37m in 2019 after firms suddenly shut

This article is more than 12 months old

Consumers lost a whopping $2.37 million in prepayments last year, due to the sudden and unexpected closures of businesses ranging from renovation contractors to fitness clubs.

Nearly half of this, or $1.15 million, was the result of the shuttering of at least 15 car dealerships, as well as the non-transfer of car ownership by these dealers.

The Consumers Association of Singapore (Case) called the amount concerning, and warned that the issue of prepayment losses will likely remain a pressing one given the current economic landscape.

More than $174,900 in prepayments have been lost so far this year, Case told The Straits Times.

The car and beauty industries received the highest number of complaints last year, with 1,683 and 1,598 respectively, according to statistics released yesterday.

About four in 10 of the complaints against the car industry related to defective or non-conforming goods, mostly involving pre-owned vehicles.

A third of the complaints against the beauty industry involved pressure sales tactics.

In one instance, Case said, a consumer who visited a beauty salon for eyebrow embroidery at an advertised promotional price of $99 ended up having to fork out more than $2,000.


The salon staff embroidered one eyebrow before informing the customer that she had been given a premium eyebrow embroidery worth $2,280.

The staff allegedly threatened not to complete the other eyebrow unless payment for the premium treatment was made, Case said.

She obtained a refund of $1,800 after Case's intervention.

The consumer watchdog received 14,867 complaints last year, down from 16,090 the year before.

About seven in 10 of those negotiated or mediated by Case were resolved, with nearly $2.6 million recovered in cash and kind.

At least 427 complaints were related to the loss of prepayments due to sudden business closures, the bulk of which involved the car, beauty, renovation contractor, bridal, and fitness club industries.

Case said that it will intensify its education efforts on the risks involved with prepayments and how consumers can protect themselves.

It is also engaging government agencies and industry stakeholders to push for targeted prepayment protection measures, it said.

Case president Lim Biow Chuan said: "We are deeply concerned about the amount of losses suffered by consumers due to sudden business closures.

"In view of the current economic landscape and as more businesses are affected, it is likely that this issue will remain a pressing concern for consumers."