Written reply to PQ on prepayment collection by businesses and losses suffered by consumers from non-delivery of goods and services

Question

Mr Don Wee: To ask the Minister for Trade and Industry regarding the collection of prepayments for services and goods (a) for each year from 2020 to 2022, which are the top three sectors with the highest amounts of prepayments lost by consumers due to businesses' failure to meet contractual obligations; and (b) whether the Government will consider legislation to prevent the collection of prepayment for services over the duration of more than six months.

Written Answer by Minister for Trade and Industry Mr Gan Kim Yong

1. The top three sectors with the highest amounts of prepayment losses reported to the Consumers Association of Singapore (CASE) from 2020 to 2022 are set out in the table below. Most of these losses were due to business closures.

2. While restricting prepayment collection will avoid monetary losses for participating consumers, it will reduce consumer options by making it harder for some businesses to supply goods and services which require advance payment (e.g. flight tickets, venue bookings for events, etc.), and lead to higher prices. The Government’s approach has been to help consumers make informed decisions and manage prepayment risks. For instance, CaseTrust-accredited businesses in some sectors offer prepayment protection that enables consumers to claim back unused prepayments if the business closes down. We will work with CASE to monitor the situation and calibrate our approach as necessary.