Sunday, 19 February 2012

‘Lemon law’ to protect consumers

Those stuck with faulty goods can get them repaired or replaced

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Guanyu 道 said...

‘Lemon law’ to protect consumers

Those stuck with faulty goods can get them repaired or replaced

Christopher Tan & Jessica Lim
15 February 2012


From September, consumers who find themselves saddled with defective goods need not be stuck with lemons.

Proposed changes to the Consumer Protection (Fair Trading) Act and Hire Purchase Act were introduced in Parliament yesterday, paving the way for the so-called ‘lemon law’.

They set clearer guidelines for consumers seeking redress for purchases that fall short in quality and performance, even after being repaired repeatedly.

The changes will also ensure that businesses get a chance to repair or replace the goods.

If a 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.

A two-stage framework for consumers seeking recourse will then be put in place.

First, the consumer can get the retailer to repair or replace the defective item.

The second stage kicks in if the retailer fails to repair or replace the product ‘within a reasonable time or without significant inconvenience’ to the consumer.

In this situation, the buyer can keep the product, but demand a discount, or return the product for a full refund.

Consumers will be able to take this course of action even after six months from delivery of the item, as long as they can prove the defect was present from the time the product was new.

Retailers may also choose the second step if it is not feasible to repair or replace a defective product, or if the cost of doing so is too high.

If a case cannot be settled, it can go to court, starting with the Small Claims Tribunal, and all the way to the High Court.

The burden of proof still lies with the retailer if a defect was spotted within six months of delivery - that is, he must show that the product was not inherently defective when it was sold.

The proposed changes cover durable goods - and that means everything from a pair of trousers to a car and include those bought on hire purchase, new or second-hand. But rental goods, services and buildings are excluded.

Additional provisions are made for cars. In the first move of its kind here, the Road Traffic Act will be amended to allow the Additional Registration Fee and certificate of entitlement on a defective car to be transferred to a replacement vehicle.

This will be allowed within the car’s first year, or the first 20,000km, whichever comes first, and only after three attempts to repair it have failed.

But if the flaw is safety-related, the consumer can seek redress after one failed attempt to repair it.

Allowing tax transfers lightens the business cost of motor firms and might encourage them to be more open to replacing a defective vehicle that cannot be repaired.

At a press briefing yesterday, the Ministry of Trade and Industry (MTI) said that given the diverse range of goods, it is not possible to specify the number of times the supplier is required to repair a defective item.

The proposed changes to the law will therefore give the courts room to judge what constitutes ‘a reasonable timeframe’ for repairs and ‘significant inconvenience’ to the buyer.

There is room to apply common sense, so there is no need for ‘prescriptive rules’ that might make the lemon law too complicated for businesses and consumers, it said.

The Consumers Association of Singapore (Case) has been lobbying for a lemon law since 2005, and the proposals are modelled on similar consumer protection laws in Europe.

Mr. Seah Seng Choon, executive director of Case, said he has come across cases in which consumers were told to send defective items for repeated repairs.

‘And when the item could not be repaired, the retailer just refused to replace it. This left the consumer no choice but to either give up or take the retailer to court,’ he said.

He hoped the proposed changes would put an end to such cases, and make it easier for consumers to get replacements and refunds.

Guanyu 道 said...

He also hoped that retailers would be nudged to ensure quality in the products they sell.

‘Shoddy goods which are not up to standard should not be in the market. Retailers who sell high-standard goods will certainly welcome this,’ he said.

The MTI said it took time to introduce the lemon law because it had to study existing laws here as well as practices in other countries.

A public consultation exercise was carried out between December 2010 and January last year to seek views from consumers and traders.

The changes to the law are expected to be passed and take effect from September.