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Surge in complaints against health clubs
Case receives nearly 1,000 complaints, highest since 1971
By Gan Ling Kai
July 23, 2009
ST FILE PICTURE
THERE'S been a surge in the number of complaints against spa, beauty and fitness clubs.
Last year, the Consumers Association of Singapore (Case) received 973 complaints against these businesses - almost three times the number of such complaints received in 2007. It is the highest number since Case was founded in 1971.
Between January and June this year, there were 308 complaints.
The complaints were mostly about service packages offered by the clubs, Mr Seah Seng Choon, 56, Case's executive director told The New Paper.
Mr Seah said some consumers claimed they were not told of vital information before club employees asked them to sign up for the packages, while other clubs allegedly refused to honour the pricing that was initially agreed upon.
Some clubs even resorted to unethical sales tactics such as pressure-selling, customers claimed.
Clubs enticed customers to sign up and pay for packages in advance by offering discounts. But there may be trouble when the club folds, Mr Seah warns.
In April this year, celebrity-owned spa Kampong Fish Therapy folded.
But some customers, who had paid in advance for and yet to use up their service packages, claimed they did not get their money back. (See reports, right.)
Said Mr Seah: 'Today, small businesses can come and go easily, and sometimes their customers may end up having no one to represent them and are unable to get a single cent back.'
Mr Seah cautions consumers against signing up for long-term packages.
'It's an unnecessary risk. We encourage consumers to go for pay-per-use services instead,' he said.
Lawyer Koh Tien Hua, 41, from Harry Elias Partnership, is also concerned about the pitfalls of paying for services in advance.
He said: 'If I buy a car, there's no guarantee it can run 2,000 miles. If you want the discount, to a certain extent, you can't expect to be protected.'
Consumers with long-term packages that are paid in advance seem to be the last to get their money back should a club close down suddenly.
Consumer's right to refund
In such cases, Mr Seah said the customer has a right to ask for a refund - through the company, the Small Claims Tribunals, or obtaining a court order from the Subordinate Court.
Still, the customer is regarded as an 'unsecured creditor', said Mr Seah.
The appointed liquidator usually collects all the assets of the company or its owner that goes bust, and pays the secured creditors first, such as the banks which provided loans to the company. Unsecured creditors will be paid only when there is money leftover.
Should there be more protection for consumers then? Yes, Mr Seah said.
'I think many (business) malpractices, such as pressure-selling and misleading claims, are already captured by the Consumer Protection (Fair Trading) Act (CPFTA), but some areas may not have been sufficiently addressed,' he said.
'As far as we are aware, there is no specific rule governing these club packages.'
Review of such acts typically happens every two or three years, Mr Seah said.
The last review of CPFTA by the Ministry of Trade and Industry was carried out in April this year, so change is not likely to take place soon, he added.
Mr Koh, on the other hand, feels that no change is necessary.
'For such cases, there's usually no fraud involved. Singapore has free trade. It is up to the customers to be aware of the consequences,' he noted.
He feels the onus should be on the consumers to push the clubs to provide a safety net.
For example, he suggested, consumers can choose to patronise only clubs that set aside reserve funds that guarantee consumers get back at least half of their advance payments, even if the company suddenly folds.
'Suing the company (after it folds) is not the solution,' Mr Koh said.
Surge in complaints against health clubs
Case receives nearly 1,000 complaints, highest since 1971
By Gan Ling Kai
July 23, 2009
ST FILE PICTURE
THERE'S been a surge in the number of complaints against spa, beauty and fitness clubs.
Last year, the Consumers Association of Singapore (Case) received 973 complaints against these businesses - almost three times the number of such complaints received in 2007. It is the highest number since Case was founded in 1971.
Between January and June this year, there were 308 complaints.
The complaints were mostly about service packages offered by the clubs, Mr Seah Seng Choon, 56, Case's executive director told The New Paper.
Mr Seah said some consumers claimed they were not told of vital information before club employees asked them to sign up for the packages, while other clubs allegedly refused to honour the pricing that was initially agreed upon.
Some clubs even resorted to unethical sales tactics such as pressure-selling, customers claimed.
Clubs enticed customers to sign up and pay for packages in advance by offering discounts. But there may be trouble when the club folds, Mr Seah warns.
In April this year, celebrity-owned spa Kampong Fish Therapy folded.
But some customers, who had paid in advance for and yet to use up their service packages, claimed they did not get their money back. (See reports, right.)
Said Mr Seah: 'Today, small businesses can come and go easily, and sometimes their customers may end up having no one to represent them and are unable to get a single cent back.'
Mr Seah cautions consumers against signing up for long-term packages.
'It's an unnecessary risk. We encourage consumers to go for pay-per-use services instead,' he said.
Lawyer Koh Tien Hua, 41, from Harry Elias Partnership, is also concerned about the pitfalls of paying for services in advance.
He said: 'If I buy a car, there's no guarantee it can run 2,000 miles. If you want the discount, to a certain extent, you can't expect to be protected.'
Consumers with long-term packages that are paid in advance seem to be the last to get their money back should a club close down suddenly.
Consumer's right to refund
In such cases, Mr Seah said the customer has a right to ask for a refund - through the company, the Small Claims Tribunals, or obtaining a court order from the Subordinate Court.
Still, the customer is regarded as an 'unsecured creditor', said Mr Seah.
The appointed liquidator usually collects all the assets of the company or its owner that goes bust, and pays the secured creditors first, such as the banks which provided loans to the company. Unsecured creditors will be paid only when there is money leftover.
Should there be more protection for consumers then? Yes, Mr Seah said.
'I think many (business) malpractices, such as pressure-selling and misleading claims, are already captured by the Consumer Protection (Fair Trading) Act (CPFTA), but some areas may not have been sufficiently addressed,' he said.
'As far as we are aware, there is no specific rule governing these club packages.'
Review of such acts typically happens every two or three years, Mr Seah said.
The last review of CPFTA by the Ministry of Trade and Industry was carried out in April this year, so change is not likely to take place soon, he added.
Mr Koh, on the other hand, feels that no change is necessary.
'For such cases, there's usually no fraud involved. Singapore has free trade. It is up to the customers to be aware of the consequences,' he noted.
He feels the onus should be on the consumers to push the clubs to provide a safety net.
For example, he suggested, consumers can choose to patronise only clubs that set aside reserve funds that guarantee consumers get back at least half of their advance payments, even if the company suddenly folds.
'Suing the company (after it folds) is not the solution,' Mr Koh said.
