CONSUMER PROTECTION (FAIR TRADING) BILL

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CONSUMER PROTECTION (FAIR TRADING) BILL: Resumption of Debate on Question (10 th November, 2003), "That the Bill be now read a Second time.". - [Minister of State, Ministry of Trade and Industry].

Question again proposed.

2.25 pm

Dr Ong Seh Hong (Aljunied): ( In Mandarin ): Mr Speaker, Sir, I support the Bill. Once it comes into force, the Consumer Protection (Fair Trading) Bill will effectively help to protect the interests of Singaporeans and tourists when they consume, make purchases and obtain services in Singapore, thereby enhancing our reputation as a shoppers' paradise.

This Bill has also clearly defined "unfair practices" and has listed out 20 specific unfair practices so that the victimised consumers can use as a basis to take legal action against the unscrupulous merchants. When you make a claim at the Small Claims Tribunal, you need only to pay just about $10. It is convenient. It saves time and money, and you do not have to go through a complicated legal process.

I have two issues to raise with the Minister of State:

First, the Small Claims Tribunal is operated mainly in English. For those ordinary citizens who do not speak English, they feel that they are being shut out. Therefore, can I suggest that separate service counters manned by officers who speak Malay, Tamil and Chinese be set up to serve these non-English speaking people.

Secondly, under this Bill, unfair trade practice is not a criminal offence. So if the merchants do not comply with the order of the Small Claims Tribunal and

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refuse to compensate the consumers, keep on delaying payment or even close down their business, these claimants would have a big headache. They will have to apply for a writ of seizure and sale. If the other party has absconded or has deliberately closed down its business, the claimants will have to go through more legal proceedings to enforce the court order. Otherwise, they will just have to resign to fate and give up their claims. These unscrupulous merchants will just run away scot-free.

I think putting the onus on the consumers to seek compensation is not fair. We should take some legal sanctions against these unscrupulous merchants. For example, if they refuse to pay the compensation, the officer-in-charge, the shareholders or the directors should be charged in court and fined, and the court should have the right to increase the compensation to the victims. Only then would it be fair to the victims and it would also have a deterrent effect on the unscrupulous merchants.

I am also very disappointed and puzzled as to why this Bill does not cover the insurance, financial and banking industries. As we know, almost every single Singaporean, even a little boy, would have some dealings with the bank. As we know, many parents nowadays would open bank accounts for their children. Besides, many Singaporeans are taking up various types of insurance coverage. There is no way the ordinary folks can take on these banks and insurance companies who are financial giants. As such, these ordinary citizens need the Government to protect their interests and to help them, so that they would not be bullied by these big banks and insurance companies. Recently, a very big insurance company refused to fulfil its commitment under some of the insurance policies. I think this is a good example.

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Apart from that, there is strong competition among the banks. Apart from receiving deposits, they are promoting all sorts of financial products. When they are marketing these products, they use all sorts of unfair means which we read frequently in the newspapers or heard from our friends, residents and even our family members. In fact, I have a personal experience.

Recently, I went to a bank to change my ATM card. When I was waiting to be served, I noticed that the counter staff were persistently promoting some of their products to the customers. I heard one of them telling an elderly lady, "Auntie, you put your money in a savings account, the interest is very low. Why don't you put in this particular account where you can earn much more interest?" In fact, this particular account is not a savings or fixed deposit account but an investment product, like a unit trust fund. It may not be suitable for everyone. Moreover, in the course of his sales talk, the counter staff kept emphasising the returns and did not take the trouble to understand the needs of his customer, nor explain the possible risks of such investment. For an elderly person of 60 or 70 years old, why does he need to buy a long-term investment product? And should he be buying a unit trust? He does not even know what a unit trust is! In this process, the counter staff did not tell his customers that they could also lose money from this investment, and the various fees and charges were not explained to them.

If we go by the definition under this Bill, such a sales tactic should be classified as an unfair practice, because it is in violation of clause 4(a) of this Bill, that is, failing to explain certain items to the consumers, or misleading them, and under clause 4(c)(i), that is, failing to protect the interest of the consumers. It also violates clause 4(c)(ii) as the unique features and nature of this transaction are not explained.

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Apart from them, the banks are in the habit of using the small print to conceal some very important and disadvantageous terms to the consumers. This is exactly what is described in Unfair Practice No. 20 in the Second Schedule.

When it was eventually my turn to be served, instead of proceeding to change my ATM card which was the purpose of the visit, he zeroed in on my bank account and said, "Uncle, your money in the savings account is earning very low interest. Why don't you buy this other product? It will give you more interest." I smilingly declined his offer.

But, today, if you ask me again, I would say, "I hope the Government would amend this Bill to cover banking, finance and insurance industries as well."

Mr Sin Boon Ann (Tampines): Sir, it is the duty of advertisers to tempt buyers, and it is the duty of buyers to resist them; or at least to carefully evaluate them.

Consumers are not stupid. But they are often either too busy, illiterate or not in the best position, when confronted with a hard driving and smooth talking salesman. And all too often, consumers are either taken for a ride or could have made better decisions with regard to their purchases.

Recently, a grassroots leader, who is a polytechnic diploma holder, came to see me about a contract he entered into with a door-to-door salesman for a purchase of a vacuum cleaner. This was no ordinary vacuum cleaner, but one which cost $3,000 to purchase. Now, why would anyone want to buy a $3,000 vacuum cleaner? Obviously, my grassroots leader was sufficiently tempted to want to consider it, subject, as he told the salesman, to getting his queen's, that is, his wife's, consent. Mind you, he was

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retrenched and was not drawing an income at that time. The salesman said it was okay and arranged for him to take the vacuum cleaner and to sign some papers which, as it turned out, was the sales agreement. There was no effort on the part of the salesman to either explain the terms of the agreement or allow the buyer to study the terms of the agreement. All my grassroots leader was told was to just sign the agreement and leave the rest to him. As it turned out, his wife thought that the purchase was a stupid one and went totally ballistic on finding out about the vacuum cleaner. Ah, but my friend said not to worry. The contract was subject to her consent. However, he was wrong. The contract that he signed was a firm commitment to buy and there was nothing that said he could renege from it if his wife had objected. Obviously, there was a misrepresentation by the salesman and the contract, which the grassroots leader signed, had put him in a weaker position in the eyes of the law as, indeed, my friend was in that position when he subsequently caved in to the seller's legal demand. I need not have to tell you what happened between he and his wife.

Sir, in a market driven economy, we celebrate the diversity of choices that the consumer is given. Yet, at the same time, the playing field is never even for the consumer. Often, it is the one with the financial resources who has the upper hand. Supposing a German car company buys a business-class ticket for a motoring journalist, wines and dines him for a week in Stuttgart. Do you think that bad car review is in the making?

Sir, I support the Bill whose function is to allow consumers to take action against retailers who are engaged in unfair practices. It has been a long time in coming, in making illegal, practices which we know to be totally reprehensible; such as bait and switch tactics, bogus last-day and closing down sales, and making

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advertisements look like editorials. For once, it is now possible for the consumer either on his own or through an independent body seek redress in court against unfair practices.

While I welcome the introduction of such legislation, Sir, I do not think that the objects of the Act has gone far enough to try to redress the imbalance that exists between the consumer and the retailer. There are two reasons for this. Let me explain. First, the current Bill gives the consumer redress largely through the courts. It presupposes that the consumer will always have the wherewithal to mount or initiate litigation against the erring retailer. Such an approach has its limitation. Litigation is often seen as time-consuming and an expensive way to deal with a problem. Additionally, we do not know if the prospect of being sued by the consumer would have a sobering effect on the retailer to behave. The truth of the matter is that, in the majority of the cases, consumers who have been misled or unfairly treated, would just blame it on their misfortune to have encountered such an unethical retailer. The pots and pans seller who cons the housewife, my mother included, into buying such wares on wild promises of its quality is unlikely to be brought to task before a judge in court. It is just not in our Asian culture for an aggrieved party to seek redress in court. The approach in the West may be different, but it is just not the culture here.

Sir, I am disappointed to learn that the Government has decided not to criminalise any aspect of unfair trade practices. A crime and punishment approach to complement civil remedy may be better suited in the circumstance. The point about criminalising an action is not about making it more onerous for the retailer to operate, but to serve, as my colleague has said earlier, as a deterrent against reprehensible conduct. The description of

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specific unfair practices in the Schedule makes one wonder whether there is any difference between cheating and unfair practices. Yet, on the one hand, cheating is a Penal Code offence, the punishment of which is a jail term. On the other hand, the remedy for unfair practices, as is the basis of the proposed Bill, is injunctive relief, restitution and damages. Unfortunately, unfair practices in law is not cheating as such and, yet, it is no less morally reprehensible. Sir, let me repeat. The prospect of going to jail will have a greater effect on the behaviour of the retailer than the prospect of being sued for damages.

Our policy towards protecting members of the public is full of inconsistencies. On the one hand, under the Securities and Futures Act, a person cannot offer securities to members of the public without an accompanying prospectus that gives full and accurate information about the issuer. Any fradulent or negligent misrepresentation by those involved will result in prosecution by the authority and the punishment, besides civil remedies, can include jail terms. On the other hand, we allow people to sell foreign real estate, even time-share rights, using hard pressure techniques and often on the basis of misleading representations, almost with impunity. And people have lost huge sums of money that way. Just look at the recent newspaper reports about people who have been misled about time-share contracts. In both cases, whether it is share investments, or purchases in time-share rights, people are put at risk of losing vast sums of money. Yet, with one particular type of investment, there is an overwhelming overload of protective legislation, and in the other case, the investor or the buyer is left very much on his own. Why the inconsistency?

Seen from this perspective, the present Bill does seem very much like that

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of a toothless tiger. I need say no more than to lament that even the right of the consumer to take action against an unethical time-share seller in the Small Claims Tribunal, a supposedly easier forum to prosecute a claim, is not given to him in the Bill. Although the right to terminate a time-share contract may be given by a Minister pursuant to the provisions of the Act, has the Government considered whether or not there are other remedies that the aggrieved party may want to pursue arising from the time-share contract? And I say that it is a toothless tiger even for the Government because of the rather unusual requirement for a specified body to consult a panel before taking any action against the errant retailer. Since when has the Government got to consult anyone before taking action in the public interest? I would therefore urge the Minister that, if the Government is serious in its intent to protect the consumer, then more can and should be done specifically by way of criminalising the more serious aspects of unfair trading practices.

Sir, my second comment on the present Bill relates more broadly to the question of redressing the imbalance of information between the retailer and the consumer. At the marketplace, money is often made on the basis of imperfect information flows. Thus, an ignorant consumer is often an easier target for salesman to close a deal than one who is well knowledgeable about the product that he is looking for.

It is therefore arguable that the best protection for the consumer is often not the law which helps him post facto, but information which helps the consumer decide what to buy, where to buy and when to buy. Consumers will also want to know which shops to avoid, which operators to choose and how much to pay. Such information, if made freely

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available, will minimise the risk of being taken for a ride. The point is that if I bought a handphone, the last thing on my mind is to want to take the vendor to court because it keeps breaking down. What I want help on would be information that will help me decide and a forum that will allow me to provide feedback to help other consumers make the right choice.

Unfortunately, in Singapore, the culture and the climate of consumer education is rather lacking. I applaud the effort of CASE in seeking to advance the cause of consumers in Singapore through battles with the retailers on specific issues. However, I also recognise that, as an organisation that depends on members' subscription to fund its activities, its ability to do more for consumers by way of its public education programme is rather limited. Such programmes, to achieve any real effort, can be expensive to undertake and would often continue to remain on the wish list of CASE unless Government is prepared to substantially support it through adequate subvention on its part. For instance, in the United Kingdom, there is a consumer magazine called "Which", a trusted publication of the consumer watchdog body there. It is a magazine that has earned the trust of readers as it independently reports on the quality of goods and services provided. Independent tests and surveys are objectively conducted and the results are often published in the magazine for the benefit of its readers. It is, I believe, a magazine that retailers respect and perhaps fear because of the potential damage that an adverse report may do to their sales. A magazine such as "Which" is therefore a blessing to consumers as it gives them the ability to make the right choice. However, publishing such magazines can be expensive and would require Government funding and support. Typically, advertising revenue for such magazines is never an option if integrity and independence are to be preserved. We would love to have a magazine like

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this in Singapore. However, would the Government be prepared to support its publication, and not only the publication, but also to provide it with funds to collaborate with SPRING to carry out independent tests on consumer products and services?

Sir, if the Government is determined about wanting to strengthen the consumers' position in Singapore, then it could truly do much more than what it is doing at the moment. I am just somewhat pessimistic that unless we step up our efforts in consumer education to create a greater transparency in the marketplace, not even the present Consumer Protection (Fair Trading) Bill will be sufficient to truly protect consumers from unscrupulous retailers.

Subject to the above comments, I support the Bill.

Mdm Cynthia Phua: Mr Speaker, Sir, I stand to support the Consumer Protection (Fair Trading) Bill.

Responsible retailers who believe in the principles of fair trading should support the Bill. The umbrella body representing these retailers should also participate jointly with the Consumers Association of Singapore to encourage fair trading both for the retailers and consumers. Retailers should be encouraged, in particular, to accept a goods-returnable policy, of course, with sufficient safeguards for the retail operations.

However, the specific unfair practices in the Second Schedule is a long list. It should also allow the retailers sufficient time to work out the operation details with the suppliers to safeguard their interest as well as to support the Bill. Recalcitrant offenders should be brought to book and publicly chastised. The recent media publicity on STB's

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action against some shops was commendable. MediaCorp Radio should also be commended for running the consumer watch programme. We should encourage more umbrella bodies to constantly continue to make the public aware of such recalcitrant cases.

I share with Mr Sin Boon Ann's concern on time-share contracts. I would like to request that this Consumer Protection (Fair Trading) Bill also protects the consumer's interest in proprietary clubs and time-sharing facilities and resorts, to review the form of corporation, to hold the investment of its members or, if deemed as a consumer product, the ownership of the product held in trust for the members, the adequacy of the disclosure of information to members as regards the management of the investment or products, and allow the members a general meeting to question the proper management of the club,

hence the protection of one's own investment. Lastly, to allow the members or consumers to minimise their loss with the ability to sell or transfer their investment or product at a reasonable transfer fee.

To use the Small Claims Tribunal for these cases, MTI may have to work with the Ministry of Law on their set up and the ability to cope with the cases. I understand that recently the Subordinate Courts have put a limit to the number of cases each Town Council could submit for their arrears in service and conservancy charges.

There should also be continuing public education programmes subsequent to the passing of the Bill. We hope the Government agency and CASE could work closely with the grassroots agency to inform the public of their rights under the new amendments, explain the avenues open to them to seek redress for unfair trade practices, make them aware what they need as evidence so that they do not

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unwittingly throw away important documents, and tell them how to avoid high-pressure sales tactics.

The acid test for the public before they make any commitment is to ask: "Is this deal too good to be true and what is the catch?" Then, make the decision and do not regret.

The Minister of State for Trade and Industry (Mr Raymond Lim Siang Keat): Mr Speaker, Sir, I am very pleased that this particular Bill has generated such interest among Members. I think it bodes well for the Bill, as a key thrust of the Bill is to raise awareness of the issues involved in consumer protection. I have listened very carefully to all the suggestions. In particular, I would like to thank Members for the support that they have given to the Bill.

But let me just put things in perspective to begin with. What is the underlying philosophy when we drafted this Bill? Basically two.

One is that the principle of caveat emptor remains. That is the operating paradigm. What does it mean when we say "buyers beware"? It means that, as a society, we believe that the individual should take responsibility for his or her own action when he or she enters into a transaction.

Two, we must all be aware that it is not just one interest here, but two interests to balance off. On the one hand, yes, we would like to give adequate protection for the small consumer not to be taken advantage of and enter into an unfair transaction. On the other hand, it is businesses and traders. There should be business certainty and not undue costs in complying with this proposed Act. So, let us bear that in mind, because this

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informs the Act and the drafting of the Act.

Members have raised various issues. I will take them in a cluster, because quite a number of hon. Members have spoken.

Mr Leong Horn Kee yesterday asked: what is new about this Bill? Where is the bite? As some other Members have said, this is actually quite a significant milestone in consumer protection. What it does is to provide a right of action to the individual consumer to seek redress when it comes to unfair practices. Secondly, it allows consumers to cancel certain contracts within a cancellation period. In particular, we have specified direct sales and time share. It also creates a specified body, ie, CASE and the Singapore Tourism Board (STB), in the first instance, in which they can enter into a voluntary compliance agreement (VCA) to ensure that the recalcitrant and errant trader not continue with the unfair practice. Also, it allows an injunction to be applied for by the specified body to the courts to prevent that particular practice.

Several Members have spoken on the desirability of having a Fair Trade Office (FTO). Whether we have a Fair Trade Office or not really depends on the nature of the Act. Dr Teo Ho Pin is not here today, but he put it quite graphically when he asked: "What is the point of having traffic rules when you do not have traffic police?" But the context here is quite different. Like Mr Sin Boon Ann correctly pointed out, the Bill does not create any criminal provisions. There is no penal provision here in the Bill. So, the context is quite different. What we have done here - and as Mr Yeo Guat Kwang said in his speech - is really to enable the consumer to seek civil redress, if there has been an unfair practice. Criminal offences are already in the books for the more serious offences, such as cheating, touting, false labelling. So, the Bill is really quite similar to the other consumer

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protection legislations that we have in Singapore today such as the Misrepresentation Act, Unfair Contract Terms Act, Hire Purchase Act. In none of these consumer protection Acts have we created a body to police these Acts. And the fact that there has been no agency created for these has not affected the effectiveness of the Act. The intent and purpose of the Act have been fulfilled.

Mr Leong Horn Kee asked whether the reason why we do not have the FTO is because the Ministry is concerned about the costs involved. The principal reason is that we were concerned in creating another regulatory agency which might add another layer of bureaucracy to businesses. As I said, there are two interests here in which we have to balance off. MTI, together with CASE and various bodies, did a detailed study on this. If we look at jurisdictions which have such a body, it has a tendency to grow a bureaucracy of its own, spewing forth more and more administrative directives. If Members have the time and would like to look at some jurisdictions, you will find that the amount of directives that you have to comply with for consumer protection is voluminous.

So, we were mindful of that. That was the reason, trying to minimise undue compliance costs on businesses while at the same time protecting the small consumer. What all Members must be clear here is that the laws we have reflect the sort of society we want. How we effect the laws reflects the sort of society we want. I have sat here on many occasions, and I have heard Members stand up and say, that really the sort of society they want is one that moves from a nanny-state to an enabling state, and I fully agree. And this Bill is a step in that direction. It provides the individual consumer with the right to take action rather than to rely on the state to take action on his behalf.

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As Mr Yeo Guat Kwang said yesterday, and he put it well, if we take this approach, it is much more robust and sustainable, and I am quoting him here.

Next, there was a cluster of questions on what is the role of CASE and specified bodies. To begin with, CASE. CASE is not the de facto Fair Trading Office. Under the Act, its role is quite narrow and focused. Two things. It is a specified body; this means that it can enter, as I said, into a voluntary compliance agreement. Two, it can apply for an injunction. Why have we done this? Why have we designated CASE and STB to be specified bodies? If we sit back and look at it, under the Bill, the individual who has suffered an unfair practice has a right to take action. But, beyond that, it is not in his interest. He has to be quite a rare individual to go to court, suffer the legal cost to get an injunction to provide and to protect the wider public interest. And that is the background to why we have designated CASE and STB as specified bodies, because they will then be able to act for the wider public interest, ie, there is a public good element involved here in both the VCA and injunction.

There was a suggestion as to why we did not make CASE the body to adjudicate on small claims which are less than $5,000. The problem here is, if you have read the papers you will know, when there were suggestions that CASE might be a specified body, there were howls of protests that CASE would be biased. It is consumer-centric, so it would be biased, and the retailers would therefore be at their mercy. So, to make CASE in effect the prosecutor and judge in its own cause would not be sensible. Far better to let it go to the courts or Small Claims Tribunal.

Should we give immunity to CASE in its role as a specified body? We looked into that. The decision that affects the trader is made not by CASE but by the Injunction Proposals Review Panel. And

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that is why the Panel has been given immunity and not CASE.

What about the $20,000 cap? I think it is important to go into the intention of the Bill. The Bill is to protect small consumers. In our deliberations, in the joint task force, the conclusion was that, generally, if it is a higher value item, then the consumer should be in a position to pursue this on his own because he has greater resources and expertise. More importantly, is that by putting it as $20,000 for the value of the claim, it covers most of the complaints that CASE has been handling.

Let me give Members some statistics. In 2001, 99% of disputed claims dealt with by CASE were equal or below $9,000. For 2000, 99% of disputed claims were equal or below $12,000. For 1999, 99% of disputed claims were below $7,000. Hence, a cap of $20,000 in the value of the claim covers almost all the complaints that CASE has been receiving.

The next series of questions is on why is it that the Small

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Claims Tribunal does not have jurisdication over time share, hire purchase and rentals. Mdm Halimah Yacob yesterday brought up the point that, this being the case, if someone were to purchase furniture, it might not be covered. He cannot go to the Small Claims Tribunal to have the matter resolved. In fact, most furniture purchases would actually be covered under the Small Claims Tribunal because these are not hire purchases. They do not come under the Hire Purchase Act. Typically, it is really a credit sales transaction. They are making monthly instalments and the retailer is just extending credit to them. So it is actually captured by the Small Claims Tribunal. The issue here is really less to do with the Bill than the jurisdiction of the Small Claims Tribunal, and this is what we will monitor and see how it develops and, if necessary, make the adjustments in consultation and discussion with the relevant bodies.

Mr Leong Horn Kee asked whether competitors would abuse the Act by filing complaints to a specified body and be a nuisance to a competitor.

Firstly, if it is just a trader to a trader, it is not covered by the Bill. It has to involve a consumer transaction. So, if it is a business transaction, it is not covered.

Secondly, there is a screen. CASE and STB act as a screen so that the trader, in his position as a consumer, if it is a dual-purpose good, ie, he has business purposes and consumer purposes - and that is captured under the Bill - they still have to go through a screen, and that is why we have a specified body. So, CASE or STB will do their due diligence. Even after that is done, there is a further screen, which is the Injunction Proposals Review Panel. So, there are certain safeguards to ensure there is no abuse.

Mdm Halimah Yacob and Mr Yeo Guat Kwang asked whether by having the specified body, have we not made the process too cumbersome, that it will take too long to get an injunction. The issue here is that we needed to balance between giving traders the assurance that there will be no element of bias in the application of the injunction against that of timeliness. We have to balance the two. If Members have read the papers, when the idea was first floated, retailers were concerned. They were concerned that, again, because CASE is consumer-centric, they are not being protected, hence, the Panel as an independent and objective check. But the Panel will be mindful that the time element is important, to ensure that the injunction

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process works to safeguard the public interest.

Dr Teo Ho Pin brought up the point about the voluntary compliance agreement. He asked whether it is effective if someone enters into it and then ignores it. The VCA was meant to be a non-litigious option so that it is less costly for all parties involved. If it is breached, a specified body like CASE can sue to recover its costs as a civil debt. And if the consumer's claims are included in the VCA, then that consumer can sue for his loss as a civil debt. There is no need then to prove unfair practice once it is captured in the VCA. Further, a specified body, if there is a violation of the VCA, can go ahead and apply for a court injunction, if it is endorsed by the Panel. And if there is a breach of the injunction, this could lead to a custodial sentence or fine, or both.

Several Members have spoken in this House about the 3-day cooling-off period. The first principle is that we would really like to preserve the sanctity of contracts. And what happens with this 3-day cooling-off period is that it is a signficant departure from the sanctity of contracts. Mr Ong Kian Min is not here today, but yesterday he made a good point. He said that there is only a fine line between an unfair bargain and a bad bargain. It is only a fine line. So, we have to be careful here. This is a significant departure because, within those three days, you can cancel it without any proof of duress. The issue here is really that of high-pressure sales. With high-pressure sales,

for example, if you are forced to buy a vacuum cleaner, which you do not want, you have three days away from the pressure to review your decision whether or not you should go ahead with it, ie, three days away from duress and pressure. It is not to give you time to look at the goods that you have contracted, which may be exactly as the person has described. So the vacuum

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cleaner that he has sold to you, with all the attributes, are exactly there. It is not for you to receive the vacuum cleaner and then say, "Well, I do not want the vacuum cleaner."

In the United States, they have a three-day cooling period. So it is a cooling off period, not a see-and-then decide period, not quite the same. In any case, the three-day period only kicks in when the trader informs the consumer that he has a three-day cancellation period to decide whether or not he wants to go ahead with the transaction. If he fails to do so, it starts at the time when he tells the consumer.

Mr Yeo Guat Kwang and several MPs have asked whether the limitation period could be longer than a year. We looked into this. If you look at the Small Claims Tribunal (SCT), they have a one-year limitation period and, at the same time, they encourage mediation. The point which Mr Yeo made is that by the time we go through mediation and get to the SCT, the one-year limitation period would have expired. But the experience of the SCT has not been the case. Many cases go through the SCT and are resolved, even though they encourage mediation. Mediation is fast. We have checked with the Singapore Mediation Centre. Their statistics show that 93% of cases were settled within a day and the limitation period starts when the consumer reasonably discovers the unfair practices, not necessarily the date of purchase. On balance, we have gone for a one-year limitation period to create greater certainty, mediate as many cases as possible, and if that fails, settled them in the Small Claims Tribunal.

Mr Ong Kian Min, Mr Chay Wai Chuen and Mr Yeo talked about the exclusion of some of the professional services, such as financial services, from the Bill. Mr Ong Kian Min made a point, which I agree, that professional bodies regulate their members with high standards and if they

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were to breach their standards, disciplinary action would be taken against them. But this is in no way inconsistent with the Bill. What the Bill does is to complement what the professional bodies are doing by giving the consumer the right to civil redress.

Dr Ong Seh Hong brought up the point on financial services. We have studied this carefully and worked with the Monetary Authority of Singapore on this. The position here is that there are certain Acts that have just been introduced, like the Securities and Futures Act and the Financial Advisers Act. The financial institutions are just making their adjustments now to these Acts. So, a new regulatory framework has been put in place. MAS felt that we should give them some time to settle down before we review it. So the answer is not that it would not be included, but it would be subject to review in two years' time to see whether or not to include it. The points that he has made are valid.

Several MPs have also spoken on the need for education. We fully agree with this. It is important at the end of the day to educate people so that they do not have to rely on civil action to resolve their problems. So we should have consumer education and business education on this Bill. We will work very closely with CASE and other bodies or business associations in this particular matter.

Finally, Mr Speaker, I would like to assure Members that we do not regard this as a once-off exercise. As several Members have said yesterday and today, this is the starting point. We want to kick-start it, we want to get it moving and we have taken an evolving approach on consumer protection. For us, it is a continuous learning exercise. As some of you know, MTI, at the beginning, had reservations on this Bill but by working closely with CASE and other associations,

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we have a better understanding of it. So it is a continuous learning process for us. We will monitor developments and make whatever adjustments that are necessary as things develop.

Mr Sin Boon Ann: Sir, I am just puzzled by the Minister of State's explanation of the need to balance between the needs of the traders and consumers. In this regard, he said that whether or not an injunctive relief is to be given depends on the panel beforehand. But surely whether or not there is unfair trade practice is a question of fact to be decided by law. Would it not be a proper forum for the judge, rather than for a separate panel, to decide, because if you have broken the law, you have broken the law. Why is it for the panel then to determine whether or not it is in the interest of the parties concerned to determine the question of law? Should it not be the judge?

Mr Raymond Lim Siang Keat: The panel does not decide on the merits of the case. It is a preliminary assessment whether or not they would endorse the application for an injunction. As I have said, this is to assure retailers that the cases that go up to the court have sufficient merit. It is a preliminary assessment. The actual merits of the case, as Mr Sin has correctly pointed out, is by the court. He is quite right.

Mr Sin Boon Ann: Could the Minister therefore clarify what exactly are the parameters or considerations that go into, in deciding whether or not a matter would be brought before a judge in court?

Mr Raymond Lim Siang Keat: If you look at the Bill, we have empowered the panel, taking into consideration all it thinks is necessary in making the decision whether or not they will allow the matter to proceed to court. So they have the power to do that.

Mr Sin Boon Ann: The question should be whether or not there is sufficient

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evidence of unfair practice on the part of the retailer to warrant the matter to be heard by the judge, and for the judge to decide whether or not an injunctive relief should be issued.

Mr Raymond Lim Siang Keat: As I have said, it is a preliminary assessment. They have to weigh it and say yes, there is sufficient evidence, in order to proceed. But the actual merits of the case would have to be decided by the court.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Raymond Lim Siang Keat].

Bill considered in Committee; reported without amendment; read a Third time and passed.