For Want of a Better Title

Consumer Protection (Fair Trading) Act Amendment

May 1, 2009 at 5:51 pm | Posted in But Seriously | Leave a comment

Recently gazetted, the Amendment to the CPFTA, as well as the new Regulations (subsidiary legislation), came into effect on 15 April 2009. It now covers financial products that are regulated by MAS, with the exception of Moneylenders and Pawnbrokers. I suppose for small time investors who may have lost money over the recent financial meltdown, and have not gotten much help from FIDReC, they now have recourse to the Small Claims Tribunal. No lawyers, always a good sign I guess.

Some of the changes that have come into effect with regards to financial products and services:

The amount claimable is now $30,000, up from $20,000. Above that amount you will be unable to use the CPFTA, so you will have to sue in court with lawyers (aggregated if more than one action for the same unfair practice).

The limitation period has been raised from 1 year to 2 years (from the date that the unfair practice occurred, although I am not a lawyer so I would not know).

There is a caveat though, you need to have first gone to FIDReC to attempt to resolve the matter before taking it to the Small Claims Tribunal.

Also, the court will take into account that financial products tend to have larger inherent risks than other non-financial goods and services covered under the CPFTA, but the supplier had to have revealed all information in good faith (not just disclosure).

Note that Insurers are deemed not to fall under the CPFTA insofar as their contracts prescribe and circumscribe risks and the boundaries of risk insured. The cancellation of contracts regulation (normally for time share bullcrap) exempts the MAS regulated products because other acts provide for longer periods with regards to financial products.

As a side note, sections 8 and 9 will not apply to MAS regulated products, but don’t ask me why. Go ask the Minister assigned to this (Ministry of Trade and Industry).

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Sections 4 to 6 of CONSUMER PROTECTION (FAIR TRADING) ACT (CHAPTER 52A) reproduced below (taken from Statutes Online, regulation available here).

Meaning of unfair practice
4. It is an unfair practice for a supplier, in relation to a consumer transaction —

(a) to do or say anything, or omit to do or say anything, if as a result a consumer might reasonably be deceived or misled;

(b) to make a false claim;

(c) to take advantage of a consumer if the supplier knows or ought reasonably to know that the consumer —

(i) is not in a position to protect his own interests; or

(ii) is not reasonably able to understand the character, nature, language or effect of the transaction or any matter related to the transaction; or

(d) without limiting the generality of paragraphs (a) to (c), to do anything specified in the Second Schedule.

Circumstances surrounding unfair practice
5. —(1) An unfair practice may occur before, during or after a consumer transaction.

(2) An unfair practice may consist of a single act or omission.

(3) In determining whether or not a person has engaged in an unfair practice —

(a) the reasonableness of the actions of that person in those circumstances is to be considered; and

(b) an act or omission by an employee or agent of a person is deemed also to be an act or omission of the person if the act or omission occurred in the course of —

(i) the employee’s employment with the person; or

(ii) the agent exercising the powers or performing the duties on behalf of the person within the scope of the agent’s actual or apparent authority.

Consumer’s right to sue for unfair practice
6. —(1) A consumer who has entered a consumer transaction involving an unfair practice may commence an action in a court of competent jurisdiction against the supplier.

(2) The right to commence an action under subsection (1) shall not apply where

(a) the amount of the claim exceeds the prescribed limit; or

(b) there is no claim for money, and the remedy or relief sought in the action is in respect of a subject-matter the value of which exceeds the prescribed limit.

(3) For the purposes of subsection (2)(a), where the amount claimed consists of a balance not exceeding the prescribed limit after set-off of any amount claimed or recoverable by the supplier from the consumer, being a set-off admitted by the consumer in the particulars of his claim, the amount of the claim shall not be taken to exceed the prescribed limit.

(4) For the purposes of subsection (2)(b), where the subject-matter in an action is a residential property, its value shall be —

(a) the annual value of the immovable property appearing in the Valuation List prepared under section 10 of the Property Tax Act (Cap. 254);

(b) the annual rent, or twelve times the monthly rent, payable by the tenant in respect of the immovable property (if this value is lower than the value in paragraph (a)); or

(c) if the annual value, annual rent or monthly rent cannot be ascertained, one-tenth of the last transacted price.

(5) Where the amount of a claim in an action under subsection (1) exceeds the prescribed limit, the consumer may abandon the excess and thereafter —

(a) the amount of the claim shall be deemed to be within the prescribed limit;

(b) the consumer shall not recover in that action an amount exceeding the prescribed limit; and

(c) an order of the court in relation to that action shall be in full discharge of all demands in respect of that cause of action.

(6) The prescribed limit referred to in this section shall be $30,000 or such other amount as the Minister may, by order in the Gazette, prescribe.

(7)   Any party to an action in a court under subsection (1) may, at any time, apply to that court to stay the proceedings so far as the proceedings relate to an unfair practice in respect of which an application has been made under section 9 against the same supplier.

(8)   The court to which an application under subsection (7) has been made may, if the court is satisfied that the determination in respect of the application under section 9 will be material to the action under subsection (1), make an order, upon such terms as the court thinks fit, staying the proceedings so far as the proceedings relate to that unfair practice.

(9)   Where no party to the proceedings has taken any further step in the proceedings for a period of 2 or more years after an order staying the proceedings has been made, the court may, on its own motion, make an order discontinuing the proceedings without prejudice to the right of any of the parties to apply for the discontinued proceedings to be reinstated.