Minister Iswaran's Written Reply to PQ on Separating Clients' Deposits And Payments To Prevent Unlawful Withdrawal Of Funds

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Question

Mr Gan Thiam Poh:  Will Ministry for Trade and Industry consider enhancing the protection of consumer interests by requiring merchants and sellers to set up and maintain client accounts to keep the deposits/payments separate from their daily operating accounts and making unlawful withdrawals from these accounts a criminal offence.

Written Answer (attributed to Mr S Iswaran, Minister for Trade and Industry (Industry))

The Government’s approach to consumer protection is based on promoting fair trading among retailers, and helping consumers make informed purchasing decisions. This approach has benefited consumers and businesses, as the vast majority of our retailers are legitimate businesses who want to serve their customers well.

As the nature of consumer transactions can vary widely in practice, broad-based requirements such as mandating that deposits be put into escrow accounts would be onerous, and raise the cost of doing business which will ultimately be passed on to consumers.

In sectors where deposits are the norm, the Consumers Association of Singapore (CASE) has worked with sector associations to develop the CaseTrust accreditation scheme. Most businesses accredited under the CaseTrust scheme provide protection for consumers’ deposits. This usually takes the form of business insurance which will compensate consumers if the business becomes insolvent. Currently more than 700 businesses from various sectors offering motoring, renovation and spa and wellness services are CaseTrust accredited. CASE recently announced that it has partnered the Hair and Cosmetology Association (Singapore) to work on CaseTrust accreditation to promote fair trading, improve the sector’s image and raise consumer confidence. CASE is in similar discussions with the Association of Catering Professionals. We encourage more businesses to become accredited as this helps to provide consumers with greater confidence that their interests are safeguarded.