The time is ripe for adopting lemon law

 Just a week after paying S$2,150 (US$1,665) for a wooden bed frame, Madam Radia Matom was dismayed to find long cracks appearing on it. She made more than 10 calls to the retailer at Harbourfront Centre in Singapore, but got no satisfaction.

A year-long battle ensued, with five mediation sessions at the Consumers Association of Singapore (Case) and two trips to the Small Claims Tribunal.

Finally, the 50-year-old housewife was offered a partial refund of S$1,000. She considered rejecting the offer and suing the retailer in court for a full refund, but was uncertain if she would succeed.

If a proposed law is passed here, success is certain for cases such as hers. But reactions to the proposed law have been mixed.

A taskforce headed by the Ministry of Trade and Industry and Case is revising the Consumer Protection (Fair Trading) Act and Hire Purchase Act, which together empower consumers to seek civil remedies for a wide range of unfair practices, from aggressive sales tactics to false claims.

Late last month, it proposed changes that will allow the courts to compel a retailer to repair, exchange or offer refunds for a good that is found to be defective within six months of purchase. Views are being sought on the changes till Jan 31.

Already, some small retailers are dreading the proposed 'lemon' law, named after the colloquial reference to a defective product as a 'lemon'. Consumers, on the other hand, are happy.

In fact, both retailers' despair and consumers' elation are unfounded. The law will not make things onerous for retailers. But neither will it provide a great deal of protection for consumers in its proposed form. But it is still a welcome step forward on the journey towards greater consumer protection.

Why do I say this? First, it is timely. The consumer watchdog received 1,785 complaints about defective goods in the first 11 months of last year, compared with 1,877 in 2009 and 2,224 in 2008. In all three years, complaints about mobile phones, furniture and electronic products were most common.

Second, retailers' concerns are, frankly, unwarranted. Several shopkeepers told The Straits Times that they fear consumers taking advantage of lemon laws by returning goods that are used or damaged through wear and tear.

Petty customers, they feel, would demand refunds on a whim. It would make it easy for people to buy something -- such as a prom dress or a Christmas tree -- use it for a few weeks, and then demand compensation. Others may return a product simply because they have grown to dislike its colour or design, they argue.

Such fears exaggerate the impact of the proposed law, which after all kicks in only when a dispute makes it to court.

On the shop floor, retailers are not forced to give in to requests for repairs, refunds or exchanges. But if a consumer proceeds to sue in court, and wins, the retailer can be ordered to replace, exchange or give a refund for the product.

Right now, with no proper lemon law, the outcome of a case depends on the judge's discretion. The retailer can also deny responsibility and blame the distributor, the importer or the manufacturer for the defect.

Consumers will thus have more recourse with defective goods. But the law as proposed will have a narrow ambit -- deliberately so.

This is a key feature of the law that merits attention: The cases affected are likely to be confined to big-ticket lemons purchased by consumers who will go the distance to seek redress.

With a limited law in place, the question may arise as to whether this law is worth putting in place at all.

The answer is clearly 'yes'.

As the experience of other countries suggests, a simple lemon law can be the start for more thorough legislation later covering different products.

This is the case in the United States, where specific lemon laws -- first created there in 1982 -- exist for vehicles, computers and even pets.

In California, for instance, retailers who deal in sick dogs can be fined up to US$10,000 or put out of business for a period of time.

Singapore's proposed law follows the British version, which is a blanket law covering many products, said Case chief executive Seah Seng Choon. He explained that complaints are received for a wide range of products. The law could be amended in future to target specific industries if needed.

A lemon law will also enhance Singapore's image as a shoppers' haven. Singapore Tourism Board figures show that tourists spent S$3.15 billion from January to September last year on shopping, up 30 per cent from 2009's S$2.42 billion.

Most important of all, the law will have the salutary effect of spurring the entire industry to improve service standards in the long run.

The use of lemon laws in the US and Britain has encouraged retailers to come up with their own policies on refunds and exchanges, and to publicise them.

This way, they avoid the risk of lengthy lawsuits or damage to their reputations from irate customers. In fact, the wish to avoid risky transactions also encourages retailers to go for reputable product sources.

The law could thus spark a sea change in the retail scene here. Few retailers here, apart from the big boys like Courts and Robinsons, now have a refund policy.

Others may offer exchanges, but on a purely case-by-case basis, leaving consumers vulnerable while the retailer decides at whim.

In short, the lemon law, though limited, has the potential to change the retail scene far beyond the courtroom.