Singapore: Beauty salons commit to ceasing unfair practices following complaints to the Consumers Association of Singapore

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The beauty industry has reportedly been consistently ranked among the top three industries in terms of complaints received by CASE. In March 2020, the Competition and Consumer Commission of Singapore (“CCCS“) also carried out investigations into two beauty parlors which misled consumers by charging prices for goods and services that were substantially higher than estimates provided to consumers (addressed in our September 2020 Intellectual Property Newsletter here).

Under the Consumer Protection (Fair Trading) Act (“CPFTA“), consumers who have entered into transactions of up to SGD 30,000 have the right to sue business that engage in unfair practices to obtain damages or other prescribed remedies. Given the recent stern warnings by CASE and the CCCS that they will be monitoring the industry “very closely” and “will not hesitate” to take actions against companies that engage in unfair practices, firms may do well to review their pricing practices and sales tactics to ensure that they remain compliant with consumer protection provisions.

In more detail

After being the subject of 90 customer complaints from January 2019 to 31 August 2020, three beauty salons have signed Voluntary Compliance Agreements (“VCAs“) with the Consumers Association of Singapore (“CASE“) where they admit, and resolve to cease carrying out aggressive or misleading practices.

Consumers complained that the salons in question had unduly pressured them into entering transactions, and/or made false or misleading claims, both of which are considered unfair practices under the CPFTA. Some of the unfair trade practices which these salons had subjected consumers to include:

1. Aggressive pressure sales tactics to buy treatment packages;
2. Bait-and-switch tactics where consumers were initially enticed by promotional prices before being subsequently pressured to purchase upmarket treatments at higher prices; and
3. Additional charges without their prior consent.

VCAs are documents that are signed by businesses undertaking to cease unfair practices, and may include terms requiring them to compensate consumers, or offer cooling-off periods for them to cancel their existing contracts. Recalcitrant businesses that commit further unfair practices after signing a VCA may be subject to declaratory proceedings or injunctions by the District or High Courts on application by the CCCS.