Consumers lost almost $2m in prepayments in 2024; highest losses from home renovations: Case

Source: Straits Times
Article Date: 07 Feb 2025
Author: Anjali Raguraman

Losses largely due to sudden business closures, companies turning unresponsive.

Consumers lost over $1.93 million after they paid in advance for services that were not delivered in 2024.

The losses – an amount exceeding four times what was lost in 2023 – were largely due to sudden business closures and companies becoming unresponsive after consumers had made payment, said the Consumers Association of Singapore (Case) on Feb 6.

The bulk of the losses, at around $728,000, came from the renovation industry, where contractors became uncontactable during the home renovation process, leaving consumers scrambling to find an alternative contractor to complete the works.

The next highest losses, valued at around $284,000, came from engagements with the bridal industry, mostly due to the sudden closure of bridal company Love Nest in City Gate and its linked entities, L’atelier and Love Story Wedding Boutique.

According to media reports, the company – which shuttered suddenly in April 2024 – had started liquidation procedures in 2023, but continued to sell bridal packages valid till 2025.

Consumers also lost about $134,000 dealing with the moving industry, due in part to large deliveries not made or loss of goods during moving.

Case president Melvin Yong said the association is concerned about the sharp rise in prepayment losses, which were mainly driven by the renovation sector.

Of the 962 complaints received against renovation contractors, about 97 per cent were against non-CaseTrust-accredited contractors, said Case. All complaints related to accredited contractors were successfully resolved, it added.

“Consumers are advised to engage CaseTrust-accredited companies whenever the purchase involves large prepayments because these companies buy insurance to protect your interest,” said Mr Yong, adding that Case will soon announce enhancements to CaseTrust to offer consumers more choices and greater assurance.

Case currently has more than 140 accredited renovation contractors. Other than safeguarding deposits in the event of a sudden business closure, the accredited companies also adhere to the CaseTrust Standard Renovation Contract, which sets out the obligations of both parties, including work and payment schedules.

Auto sector saw highest number of complaints

As for consumer complaints related to industries, Case said the motor car sector saw the highest number of complaints, followed by the electrical and electronics, beauty, renovation and entertainment industries.

The same industry topped the list in 2023, and drew 1,306 complaints in 2024. Around 35 per cent of complaints against the automotive industry were related to car sharing and car leasing, up from 33 per cent in 2023.

Case said it has formed a working committee to address issues related to car sharing, with Mr Yong adding that consumers are advised to read the terms and conditions for car-sharing services carefully, and check online for reviews by other users.

As for the other industries, the entertainment sector saw a 281 per cent spike in complaints from 2023, with the bulk of the complaints made against the Singapore Sky Lantern Festival in February 2024 – where hundreds of attendees, who each paid $50, arrived to find that there would be no release of lanterns – and others related to ticket scalping.

The food and beverage (F&B) sector saw a 24 per cent increase in complaints, which were mainly related to the cancellation of catering firm Sakura Buffet’s licence over food safety concerns, resulting in unfulfilled orders for consumers.

Complaints against the telecommunications sector rose 34 per cent, with consumers typically complaining about poor connectivity, delayed installation of broadband services, and high charges in their bills.

E-commerce complaints reach all-time high

“E-commerce complaints have reached an all-time high, surpassing even the 2020 peak that was caused by the Covid-19 pandemic,” said Mr Yong.

Case said it received 4,641 e-commerce complaints in 2024, a 25 per cent increase from 3,711 complaints in 2023.

Around 13 per cent of the complaints were related to the entertainment industry, and 9 per cent to the F&B industry.

Mr Yong noted that the peak reflects the growing shift towards e-commerce as a preferred mode of shopping, adding that Case has worked with the two biggest e-commerce platforms in Singapore, Shopee and Lazada, to put in place an effective dispute resolution framework.

“Complaints involving these platforms have a high resolution rate of around 90 per cent... Case will continue working with other platforms to provide consumers with better protection when shopping online,” he added.

Mr Yong also called for more protections for consumers when it comes to e-commerce transactions and prepayments.

He said: “It has been many years since our consumer protection laws were last reviewed, and the 2024 statistics show that more needs to be done to better protect consumers shopping online, and also more safeguards are needed for consumers in sectors that collect large prepayments.

“Case will engage the Government on the need to update our laws, work with our stakeholders to improve consumer education, and take steps to tackle industry-specific concerns.”