The past week saw a remarkable story of how people here rallied to redeem Singapore with no help at all from government agencies. After video surfaced of Vietnamese tourist Pham Van Thoai on his knees begging for a refund from a callous shop owner, over $14,000 was raised within a day on Indiegogo to help compensate him for his loss of $550. According to reports, news reached all the way back to Vietnam, earning much praise for Singaporeans.
Yet, I daresay that for every one Thoai, there must be a thousand more tourists and local shoppers scammed by get-rich-quick businessmen (and women). Ad hoc bottom-up indignation and fundraising, however laudable in one instance, cannot be a practical solution to a persistent cancer. We need a structural response, and in the nature of structural responses, the role of the state in implementing one cannot be avoided.
For future reference, the narrative of events can be found below the commentary. Very simply this was a case of a shop trying to make a quick buck through unscrupulous means, taking advantage of a vulnerable customer. In this particular instance, the customer’s vulnerability sprang from his weak command of English — he being from Vietnam — and from an easy guess that he was a tourist, with very limited time in Singapore to seek recourse. After paying $950 for an iPhone6, a further $1,500 was demanded from him for a one-year warranty — which (as discussed below) I believe should have been complimentary. But vulnerable customers can be found among locals as well, e.g. someone who is elderly and possibly confused, or someone unable to read a contract in English.
Doing business ethically must include a recognition of such vulnerability and making reasonable efforts to overcome them in order to ensure that any deal was freely entered into, backed by informed consent.
The above however, is just a preachy statement. Any number of businesses can ignore this gold standard if they think they can get away with it. And that’s just it: if we are to stop this cancer spreading, we have to come up with an effective way to penalise wrongdoers. Ministers posting statements on Facebook saying they’re “appalled” provide no assistance. Unsympathetic Singaporeans saying “But everybody knows Sim Lim Square is full of untrustworthy sellers, he shouldn’t have gone there”, or the government-backed Consumers’ Association of Singapore (Case) advising customers to read contracts carefully before signing them, only reveal their navel-gazing tendencies. How would tourists know to avoid Sim Lim? How do non-English speaking visitors scrutinise the fine print of contracts before signing?
Consumer Protection (Fair Trading) Act
Actually, there is a law in place: the Consumer Protection (Fair Trading) Act. The behaviour of the seller (as reported in this instance) would almost certainly come within the scope of prohibited practices. For example, Section 4 of the Act says:
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), (b) and (c), to do anything specified in the Second Schedule.
Additionally the Second Schedule also lists some specific unfair practices, and these include:
11. Taking advantage of a consumer by including in an agreement terms or conditions that are harsh, oppressive or excessively one-sided so as to be unconscionable, and
20. Using small print to conceal a material fact from the consumer or to mislead a consumer as to a material fact, in connection with the supply of goods or services.
There is also a helpful (to the consumer) clause that says:
18A —(1) If, in any proceedings taken in any court between a consumer and a supplier in relation to a consumer transaction, any dispute arises as to whether the supplier has complied with any specified requirement of this Act or the regulations made thereunder, the burden of proving that the supplier has so complied shall be on the supplier.
Unfortunately, there are also weaknesses with this law. It does not make it a criminal offence akin to cheating. As a result it is not for the state prosecutor to initiate proceedings. Instead the law envisages that an aggrieved consumer will initiate a civil suit through the Small Claims Tribunal or State Courts (depending on the size of the claim). A tourist will thus find it hard to avail himself of this remedy, if at all he even knows of such a route. He is unlikely to know how long the process will take and unable to prolong his stay accordingly. The cost of accommodation alone may outweigh the amount he lost in the unfair transaction.
That said, while Section 23(1) of the Small Claims Tribunal Act requires that “a party to proceedings before a tribunal shall present his own case”, a subsection also provides that:
23(2)(h) A person who is not resident in Singapore and who is unable to remain in Singapore until the hearing of the case, any other person who is duly authorised by him in writing may, with the approval of the Registrar or tribunal, present the case on his behalf;
Hence, what we obviously need is for a special office, perhaps within the Singapore Tourism Board, tasked to take such complaints and pursue them on behalf of tourists. A prominent shop frontage on Orchard Road, open seven days a week, coupled with intensive advertising of its free services in various brochures handed out to tourists, would be a good start. Requiring all shopping malls frequented by tourists to display a large board near their entrances advising tourists of the existence of such help would also be a way to inform tourists of the remedy available.
Lifting the veil of an incorporated company
The other problem with the Consumer Protection (Fair Trading) Act is that unfair traders can hide behind two-dollar companies. As it is, comments are already circulating how shops against whom Case has taken out injunctions (via another provision of the same law) close down one day only to re-open the next under a new name. Sometimes the new business is under the same owner’s name, other times it is placed under a spouse’s or relative’s name. How is the consumer or his authorised representative going to succeed in getting compensation or satisfaction when suppliers can so easily hide behind liquidated or bankrupt companies?
A necessary improvement would be to amend the Consumer Protection (Fair Trading Act) to enable the Small Claims Tribunal (or other courts hearing a case) to make orders against shareholders and directors of a supplier, if the supplier was an incorporated company. All shareholders and directors should be held jointly and severally liable and given, say, 14 days to pay up. Failure to pay should then be made into a criminal offence — after all, it is one of ignoring a court’s orders.
As you can see, it is not difficult to have an effective way of cracking down on such unsavoury practices. We’re halfway there with the Consumer Protection (Fair Trading) Act. It just needs a bit of political will, a few tweaks to the law and a willingness to spend a bit of money supporting an office that actively pursues claims on behalf of tourists.
But as I am also painfully aware, political will to do right by the common man — sorry for the traditional, sexist expression, but “common person” still sounds strange — can be a rare thing in Singapore. Dismayingly, government departments and government-linked organisations often prefer to launch (pricey) public relations campaigns to sugarcoat problems than fix the problems themselves. I hope, at least in this case, I am wrong, but perhaps readers may want to monitor whether in the longer run the Singapore Tourism Board will respond to the Pham Van Thoai incident and the bad press it has generated internationally with a media blitz in target countries or with real solutions domestically, as I have outlined.
* * * * *
Pleading on bended knees
Based on news reports, what happened on 3 Nov 2014 at Mobile Air, the shop in infamous shopping mall Sim Lim Square, was this: Thoai was quoted $950 for an iPhone6 which he agreed to and paid in cash. The shop then asked him if he wanted the one-year or two-year warranty. He chose the one-year warranty, assuming it was complimentary. (I looked up an Apple store website and it does indicate that a one-year warranty is complimentary, so his assumption should be correct.) But instead of just completing the paperwork and handing him the purchase, the store asked him to cough up another $1,500 for the warranty. Thoai was shocked. He didn’t have this amount, so he asked to cancel the purchase. The shop however refused to refund the money. He pleaded with the shop, going down tearfully on his knees to do so. The sales clerks just laughed at him. Passers-by did not intervene. At least one however, whipped out a phone (camera?) to video the scene.
At some point, it was reported, a refund of $600 was mooted by the shop, but Thoai’s girlfriend considered that inadequate, for it would mean the shop pocketing $350. She called the police, and the shop then retracted this possible offer. I’m not sure how long the stand-off lasted, but at some point, representatives from Case came and after some mediation, the shop agreed to refund $400.
That was apparently the best that Case could do, and Thoai reluctantly accepted it, leaving him $550 poorer.
The video went viral.
Tech entrepreneur Gabriel Kang launched a fundraising campaign to help Thoai buy another iPhone — which succeeded beyond all expectations within a day. Meanwhile, some others went a little berserk and splashed personal information of Mobile Air’s owner, Jover Chew — including his address and personal photos — all over the internet. This in turn led to further actions which may fall into the area of harassment.
It also surfaced that Mobile Air has been the subject of complaints before. As you will have noted from the second photo of this article, which I took in February 2014, there were four complaints against the shop in the three-month period November 2013 to January 2014. The Straits Times too reported that
Mobile Air has long held a notorious reputation within the IT shopping mall, with Case reportedly receiving 18 complaints about the shop in the first 10 months of this year. It had also previously drawn flak for refunding a customer $1,010 in coins.
— Straits Times, 5 Nov 2014, Netizens expose details of Sim Lim Square mobile shop owner who bullied Vietnamese tourist
Jover Chew’s wife was also revealed to run another electronics shop called J2 Mobile. This too became the subject of intense media focus.
The story went viral well beyond Singapore.
The Straits Times found at least 10 Vietnamese news sites, including the websites of prominant newspapers like Thanh Nien News, and Tuoi Tre, reporting on the plight of Mr Pham Van Thoai.
— Straits Times, 7 Nov 2014, iPhone 6 incident at Sim Lim Square goes viral in Vietnam, makes international headlines
The Chinese government (see this BBC report) issued an advisory to its citizens visiting Singapore, cautioning them against unscrupulous merchants. The Singapore Tourism Board (STB) then swung into damage-control mode. That earned them rather jeering comments on social media, noting how they offered no help to Thoai but only took a delayed interest in the matter in a totally reactive manner.
Meanwhile, Gabriel Kang had a new and urgent problem. He needed a way to contact Thoai, after having raised more than enough money to buy him a new iPhone.
Mr Kang is now looking for a buyer for the silver 64GB iPhone 6 that he bought at Mustafa Shopping Centre at 2.30am on Friday. He had bought it at $1,538 – a more expensive price than the usual $1,288 – because time was running out on “Operation Ambush”, he said. He found out about Mr Thoai’s flight only on Thursday evening and the new iPhone was sold out at most places, he added.
The remaining money will be donated to a charity of Mr Thoai’s choosing.
Mr Kang said: “I will make the transfer when I know which charity he decided on. The money will be accountable to the donors.”
This was Mr Thoai’s second visit to Singapore. He first came here 10 years ago.
He and his friends were supposed to spend a couple of days in Malaysia but changed their plans after the media attention.
Instead, they spent their remaining days in Singapore “doing touristy, but low-key stuff” before their flight yesterday afternoon.
— Straits Times, 7 Nov 2014, Vietnamese tourist ripped off in Sim Lim Square declines iPhone from fundraiser, leaves Singapore
Eventually, Kang met him at the airport shortly before Thoai was to fly off. Thoai declined the gift of the iPhone, saying that a “local businessman” had already given him a gift of $550 (the amount he lost from the abortive purchase) and that he had bought another iPhone since. He did not want to profit from his misfortune by accepting any more money. Thoai however accepted a basket of food delicacies that Kang brought with him to the airport.
His holiday proved far more memorable than anyone could have anticipated.
* * * * *
Post-script 12 Nov 2014:
A story on Channel NewsAsia added important facts: The Small Claims process requires the claimant to pay hundreds of dollars upfront to start the process. as illustrated by the experience of a tourist from the UK, Paul Kirkdale, and a mobile phone shop called Mackin.
On the advice of the Consumer’s Association of Singapore, Mr Kirkdale raised the case in the Small Claims Tribunal and won. However, Mackin refused to pay. As it was a civil case, it meant the 50-year-old had to enforce the court order himself.
“I had to pay a S$120 court fee to get the process started, and a S$300 deposit to the bailiffs before they would take any action, to cover their costs in case Mackin doesn’t have the assets to pay the bills. Out of my total of S$231 claim, I had to invest another S$420, and which I potentially might not get that back,” he recounted.
“How can a company in Singapore be allowed to ignore a court order to pay money to a claimant and it is down to the claimant to pay even more money with no guarantee they will get it back? This is what these companies rely on – that the cost of enforcing the court order is not worth the risk given the original amount claimed,” he said.
The story also quotes Steven Lam, Director, Templars Law, saying what I said above: policy makers could consider inserting criminal liabilities and sanctions into the Consumer Protection Act to target shareholders, as well as shadow directors – a concept already being practised in jurisdictions such as Hong Kong, Australia, China and the United Kingdom.