On 28 January 2014, the Ministry of Trade and Industry (the “MTI”) issued a press release announcing that consumers will enjoy greater protection when they purchase direct sales, time share, time share related and long-term holiday product contracts after the Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations 2009 (the “COC Regs”) are amended on 1 April 2014.
The four key amendments are set out below:
- Expanding the definition of “regulated contract” to cover long-term holiday product contracts: This amendment will give consumers of holiday clubs the same protection accorded for time share contracts. A long-term holiday product is a contract between a supplier and consumer whereby the main effect of the contract is for the consumer to acquire rights to obtain discounts or other benefits in respect of accommodation, and the contract has a duration of more than one year or contains provisions allowing the contract to be renewed and extended such that it has a duration of more than one year. It does not matter that the contact also provides for the consumers to acquire other services.
- No advance consideration: There must not be any form of payment or promise to or request that the consumer pay money or provide any advance consideration (such as signing a credit card authorisation form for an amount, with the supplier promising that the credit card authorisation form will not be processed until after the expiry of the cooling-off period) during the cooling-off period of five days (excluding Saturdays, Sundays and public holidays). The MTI has indicated that this is to ensure that the consumer is given sufficient time to review the product carefully before making a financial commitment, and so that the supplier will no longer need to refund consumers who choose to cancel the contracts. In the event that the supplier accepts or requests any form of consideration from a consumer prior to the expiry of the cooling-off period, or from a prospective consumer in contemplation of the regulated contract, the cancellation period will be automatically extended by a further three months.
- Product Information Notice (the “PIN”) must be provided: The supplier must provide the PIN to the consumer before the contract is signed. The PIN ensures that the information provided to consumer is standardised, and that the terms of the contract and obligations of the consumer are clearly explained in a single document. The information required is listed in the Third Schedule to the COC Regs. If the required information for the PIN is not included, the PIN would be deemed to be inaccurate and the consumer would automatically have an extended cancellation period of another three months.
- Cooling-off period starts after PIN and Consumer Information Notice (the “CIN”) given to consumers: The cooling-off period of five days will commence as soon as the CIN has been brought to the notice of the consumer, subject to the PIN being provided prior to entering of the contracts. The CIN informs the consumer of his right to cancel the contract under the COC Regs. In this way, consumers will have sufficient information about the product provided in the PIN, as well as a clear idea of the cancellation procedures in the CIN before the cancellation period commences. The supplier bears the burden of proof in the provision of the CIN and PIN.
As a matter of background, the MTI had, between 28 January 2013 to 1 March 2013, conducted a public consultation on the proposed amendments to the COC Regs. The MTI has also issued its response in relation to the feedback received.
The following materials are available from the MTI website www.mti.gov.sg.
- Press release
- FAQs for Businesses - Amendments to the Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations
- FAQs for Consumers - Amendments to the Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations
- Response to the public consultation on proposed amendments to the Consumer Protection (Fair Trading) Act and subsidiary legislation