Mr Teo Ser Luck at the Consumers Association of Singapore (Case) - World Consumer Rights Day Financial Education Exhibition

 KEYNOTE ADDRESS BY MR TEO SER LUCK, MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE CONSUMERS ASSOCIATION OF SINGAPORE (CASE) – WORLD CONSUMER RIGHTS DAY FINANCIAL EDUCATION EXHIBITION LAUNCH, 10 MARCH 2012, ONE MARINA BOULEVARD BASEMENT 1

Mr Lim Biow Chuan, My Parliamentary Colleague and Vice-President of CASE,

Ladies and Gentlemen,

Introduction on World Consumer Rights Day

I am very pleased to be here this morning to celebrate World Consumer Rights Day and to officially launch the CASE consumer education exhibition.  World Consumer Rights Day falls on 15 March annually and has its origins from President John F Kennedy’s address to the US congress on the issue of consumer rights on 15 March 1963.

That was the first time that any politician had set out such principles, and in his speech, he said, “Consumers by definition, includes us all... They are the largest economic group, affecting and affected by almost any public and private economic decision.”  Since then, the US has worked towards establishing consumer protection laws that safeguard the interests of consumers.

Likewise, in Singapore, we recognise the importance of consumers and adopt a multi-tiered consumer protection framework with a caveat emptor, or “let the buyer beware”, as its cornerstone.  Given the diverse and evolving range of consumer products and services, the most sustainable approach is consumer education to empower consumers to discern the best deals for themselves and reject unrealistic promises.  In the long-term, an increase in consumer sophistication remains the first and best line of defence of their interests. Sustained consumer education is therefore vital in ensuring that consumers are informed to make smart choices.

CASE’s active role in consumer education is thus critical to our overall consumer protection framework and the Government has consistently supported CASE’s efforts in this regard.

The theme of this year’s World Consumer Rights Day, “Our Money, Our Rights” highlights the need for financial institutions to provide greater information transparency to consumers.  This will allow them to make better purchase decisions.  To this end, I am pleased that CASE has, with the support of various financial organisations, spearheaded this event to educate consumers on financial products and services like banking, insurance and financial planning, and their rights when purchasing such products and services.

CASE will also be launching its iPhone / iPad application today. I am certain that this application will be an invaluable tool to help consumers make informed decisions.

The exhibition will feature important milestones of the consumer rights movement in Singapore, including various consumer protection legislation such as the Consumer Protection (Fair Trading) Act (CPFTA).  This consumer protection legislation provides the next level of defence in our multi-tiered framework.  The CPFTA gives consumers legal safeguards against unfair practices, and enables them to have recourse to civil remedies before the courts. The Act also allows specified bodies such as CASE to apply for injunction orders against errant traders.

Our legislation needs to carefully balance risks against costs, as sweeping and prescriptive legislation will lead to higher business costs that may be passed on to consumers.  We regularly review and update our legislation in line with international best practices.  More recently, the Consumer Goods Safety Requirements Regulations was introduced in April 2011 to stop the supply of consumer goods that do not meet international safety standards, and to direct suppliers to inform users of safety issues. The proposed Lemon Law provisions were also tabled in Parliament last month.

The Lemon Law provisions passed in Parliament yesterday (9 March) will plug a gap in our current consumer protection legislation, and provide additional options to help consumers and retailers resolve the issue of defective goods. It will also equip businesses with a greater certainty about their responsibilities to customers and spur them to provide better quality products for consumers.

The background of the Lemon Law goes back to 2007.  CASE advocated for it due to an increasing number of complaints relating to defective products. In some cases, retailers refused to replace the product despite numerous failed attempts at repair. Consumers who were sold defective products were often unable to seek redress effectively. A taskforce was formed in September 2008 by CASE and the Ministry of Trade & Industry to examine the feasibility of implementing the Lemon Law in Singapore. Another milestone was the public consultation exercise held from December 2010 to January 2011 to gather feedback on the Lemon Law. Consumers were found to be very much in favour of the proposed provisions, and gave largely positive feedback.

The Lemon Law provisions will be included as amendments to the Consumer Protection (Fair Trading) Act and Hire Purchase Act. The provisions will provide clearer burden of proof, where defects reported by the consumer within the first six months of purchase are presumed to exist at the point of purchase unless the retailer can prove otherwise.  Consumers can also look forward to remedies of repair, replacement, reduction in price or refund should they purchase a defective product.

To allow the industry time to adjust, the amendments are proposed to come into effect only on 1st September 2012, approximately six months from now. My Ministry is already working with CASE and the Trade Associations to develop consumer guides and business advisories to provide greater clarity to both consumers and businesses. For example, guides on best practices have been issued to several Trade Associations. CASE will also commence a Lemon Law education campaign from April this year to better educate consumers on their rights and expectations under the new Law.

While such consumer protection laws may be in place, consumers must also exercise prudence and take responsibility for their transactions.  A balanced approach, where consumer education, responsibility and regulation work together, will best serve the needs of Singapore.  We believe that a consumer protection framework needs to be embraced by both consumers and businesses in order to be sustainable and effective.

In closing, I would also like to commend all the organisations, associations and government agencies that have contributed to the World Consumer Rights Day exhibition.  I wish everyone an enriching and enjoyable learning journey ahead.