Unfair business practices in Singapore encompass fraud, misrepresentation, taking advantage of customers, offering unsolicited goods and services, and some other practices.
Unfair practices under Singapore law
A comprehensive list of unfair practices is provided in the Consumer Protection (Fair Trading) Act (CPFTA) and we will summarize them below. Here are the main practices that you should avoid applying in your own business.
Misrepresentation of certain qualities of goods and services
Such misrepresentations most often include performance characteristics, quality certificates, standard and approval claims. You should also avoid including false and misleading information to consumers about your goods and services regarding availability and new/used conditions. The CPFTA also forbids false claims about necessary or desirable additional services, parts, repairs, etc.
Misrepresenting price conditions and advantages
It is explicitly prohibited to misrepresent price benefits or advantages that do not actually exist. Charging a price for goods or services that is substantially higher than an estimate provided to the consumer is also considered an unfair practice. You should also avoid false statements for discounted prices for a stated period of time if goods or services will continue to be so available for a substantially longer period.
Taking advantage of consumers
You should avoid including conditions in your agreements with consumers that may be deemed harsh, oppressive or excessively one-sided. Another prohibited action is exerting undue pressure or undue influence on the consumer to enter into a transaction involving goods or services.
Use of “small print” to conceal important facts
Using “small print” to conceal or omit providing facts to consumers is also explicitly prohibited under Singapore law.
Sale of unsolicited goods and services
Another unfair practice is purporting to assert a right to payment for the supply of unsolicited goods or services. This includes sending invoices or other documents that may be perceived by the consumer as bills if you don’t explicitly include the following statement: “This is not a bill. You are not required to pay any money.”
Consumer rights in cases of unfair practices
When a consumer is involved in a transaction where the supplier has applied an unfair practice the consumer is entitled to receive a refund as well as other remedies. Your company may be sued for the unfair practices it applies within a period of 2 years from the transaction in front of the Small Claims Tribunal or another court. The respective court may order you to:
- Pay a refund to the consumer;
- Order restitution of any money, property or other consideration given or furnished by the consumer;
- Award the consumer damages in the amount of any loss or damage suffered by the consumer as a result of the unfair practice;
- Make an order of specific performance against the supplier;
- Make an order directing the supplier to repair goods or provide parts for goods; or
- Make an order varying the contract between the supplier and the consumer.
Application of the Consumer Protection (Fair Trading) Act (CPFTA)
The CPFTA applies to most consumer transactions but does not apply to sales of land and houses, employment contracts, and pawnbroking. The rules on unfair practices apply to transactions where either the consumer or supplier is resident in Singapore or the offer or acceptance relating to the consumer transaction is made in or is sent from Singapore.