Minister Lim Hng Kiang's Written Reply to Parliament Question on Cap on Deposits for Purchase of Goods and Services

​Question

Mr David Ong: To ask the Minister for Trade and Industry (a) whether the Ministry can consider the establishment of a cap on deposits for the purchase of goods and services to better protect consumers' interests from errant businesses; and (b) what measures has the Ministry taken to prevent errant business owners from setting up another entity to continue their malicious intent.

Written Answer (attributed to Mr Lim Hng, Minister for Trade and Industry)

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

As the nature of consumer purchases can vary widely in practice, broad-based restrictions such as imposing a cap on deposits, could have the unintended effect of restricting trade and increasing transaction costs. This will result in greater inconvenience and higher costs for consumers. If there are specific sectors which require additional safeguards to protect consumers’ interests, we are open to working with the Consumers Association of Singapore (CASE) and relevant industry associations to explore possible arrangements.

MTI is currently studying ways to enhance the effectiveness of Singapore’s consumer protection regime, with reference to practices in other jurisdictions such as Hong Kong and Australia. These will include measures to prevent errant retailers from side-stepping restrictions under the Consumer Protection Fair Trading Act by setting up new business entities. The review will be completed by mid-2015.