The Consumer Protection (Fair Trading) Act (CPTFA) is a law that aims to enhance consumer rights and consumer protection in Singapore. Among the more specific acts provided to consumers is the right to cancel certain contracts within a prescribed period of time. During this time a consumer may review his decision to purchase a good or services and inform the trader that the agreement should be considered canceled.
Which contracts may be canceled by consumers
Previously consumers were allowed to cancel direct sales contracts. This means an agreement, whether verbal or in writing, for the direct sale of goods or services. A definition is provided by the law under which a direct sales contract should be considered a transaction that is entered into:
- during an unsolicited visit by a supplier to —
-
- the place of residence of the consumer;
- the place of residence of another person; or
- the place of business of the consumer;
- during a visit by a supplier to any place referred to in paragraph (a) at the express request of the consumer where —
- the goods or services to which the contract relates are not goods or services for which the consumer requested the supplier’s visit; and
- the consumer did not know, or could not reasonably have known, the supply of such goods or services formed part of the supplier’s business activities; or
- after an offer was made by the consumer in respect of the supply by the supplier of the goods or services in the circumstances referred to in paragraph (a) or (b)
Some contracts are excluded from the application scope of the CPFTA. These are mainly agreements regarding property, the sale of goods and services intended for business use and small sales under S$50. There are also other exceptions. With the CPFTA the scope of contracts that can be canceled by consumers was extended to time share related contracts and long-term holiday product contracts.
How to cancel a contract under the CPFTA?
To cancel a contract, the consumer should give the supplier a notice of cancellation in writing of the consumer’s intention to cancel the contract. A specific form has been provided to be used by the government. The necessary information to be included is:
- The name of the supplier;
- A reference to the contract;
- Consumer name and address;
- Optional email and phone number
- Date and signature
The notice should also contain a clear statement that the consumer wishes to exercise their right to cancel the contract under the Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations. There are three options to deliver a cancellation notice:
- Personal delivery to the designated person;
- Delivery through pre-paid post to the designated address of the supplier;
- By facsimile transmission to a facsimile number designated in the consumer notice.
A notice of cancellation sent by a pre-paid post is deemed to have been given at the time of posting, whether or not it is actually received. It is, however, advisable to use the services of a registered post.
What is the cancellation period?
The consumer has a right to cancel a regulated contract within 5 days. This does not include weekends (Saturday and Sunday) and public holidays. These are not counted within the 5 days period. The period starts after the day on which the consumer entered into the contract or after the consumer has been provided with an information notice by the supplier. The information notice includes the following details:
- Name of the supplier;
- Supplier’s reference number, code or other details to enable the transaction to be identified.
- Designated person(s) to whom notice of cancellation to be given, including at least one name and at least one address or facsimile number.
During the cancellation period, the supplier should not request or accept payment of any sum or other consideration in contemplation of or under a long-term holiday product or a timeshare contract.
