"Lemon law" targeted to take effect from September

SINGAPORE: The Ministry of Trade and Industry (MTI) has proposed changes to laws aimed at protecting consumers against unfair business practices.

The proposed amendments to the Consumer Protection (Fair Trading) Act and Hire Purchase Act, introduced in Parliament on Tuesday, will pave the way for the so-called "lemon law".

"Lemon laws" refer to consumer protection laws that provide remedies for consumers against latent defects in goods, colloquially known as "lemons", which fail to meet standards of quality and performance, especially after repeated repair.

For example, if a defect is found in a product within six months of delivery, it is assumed the defect existed at the time of delivery. It is then up to the retailer to prove otherwise.

In such cases, consumers can ask the retailer to repair or replace the defective product.

If the cost of repair outweighs the replacement, the retailer can choose to replace the product, and vice versa.

If the retailer fails to repair or replace the product within a "reasonable time" or "without insignificant inconvenience" to the consumer, the consumer may ask for a reduction in price or return the product for a refund.

If the retailer fails to do either, consumers may bring the matter to the Small Claims Tribunal.

The amendments, targeted to take effect in September, are designed to make commercial transactions more transparent.

The "lemon law" does not in general apply to goods with a short life span such as consumables and food.

Meanwhile, the Consumers Association of Singapore (CASE) said consumers can look forward to seek redress more effectively when they're are sold defective goods.

It said it believes this will also raise the standards of providing quality products.

CASE said this in a statement on Tuesday after changes were proposed to the Consumer Protection (Fair Trading) Act and Hire Purchase Act in Parliament.

It said it has been pushing for such a provision, as the number of cases it has received for defective products has been increasing over the years.

These consumers felt shortchanged after they were sold defective products and were not able to seek redress effectively.

In 2007, there were 1,410 cases. This rose to 1,928 in 2008.

The number dropped in 2009 to 1,652.

In 2010, it increased to 1,753, and to 1,793 in 2011.

Last year, the biggest number was for furniture with 467 cases, followed by electrical and electronic goods with 338 cases and mobile phones with 301 cases.

CASE said one area of concern is the defective products sold may not be rectified, even when they've been sent for repair several times.

MTI believes the changes would not impact honest retailers, but would instead weed out the unscrupulous ones.

Previously, there was no specific provision to deal with repairs and replacements.

The proposed amendments followed a public consultation exercise conducted by MTI from December 2010 to January 2011.