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Product Regulation & Liability

Singapore: Consumer watchdog seeks court order against water system retailer over unfair trading practices

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In brief

On 16 December 2022, the Competition and Consumer Commission of Singapore (CCCS) commenced proceedings in the State Courts against a retailer that sells alkaline water systems, Triple Lifestyle Marketing Pte. Ltd. (TLM), and its director. In particular, the CCCS applied for the court to make findings that TLM engaged in unfair trading practices and to issue an injunction to restrain TLM and its director from continuing such unfair trading practices.

In more detail

TLM sells long-term maintenance service packages for alkaline water systems via door-to-door sales. When consumers sign up for a package, they would receive a water dispenser, water filtration system and periodic water filter replacements. In the service agreement of the maintenance package, it states that TLM is required to repair the water dispenser or filtration system if there are any defects.

Since January 2020, there were numerous consumer complaints lodged against TLM. The complaints generally involved instances where TLM was unresponsive to repeated service requests or when TLM did not show up for appointments to replace or repair faulty products.

Due to the high number of complaints received, the Consumers Association of Singapore (CASE) issued two company alerts on TLM to warn consumers about TLM’s unfair practices in February 2021 and April 2022. CASE also asked TLM to enter into a voluntary compliance agreement, but TLM did not sign this. CASE then referred the case to the CCCS for investigation under the Consumer Protection (Fair Trading) Act (CPFTA) in November 2022.

After the CCCS’ investigations, it applied to the State Courts to make findings that TLM engaged in unfair trading practices, including the following:

  • TLM falsely claimed that TLM or its products were accredited and Thomson Medical Centre was one of its customers
  • TLM misrepresented that its water dispenser was free for a limited period of time
  • TLM misled consumers that it would repair or replace faulty products or provide a change of water filters when requested under the service package, or misled consumers by giving false excuses about its delay or inability to do so
  • TLM accepted payments for its maintenance service packages which included a 1-year warranty for its “tankless” water dispensers when it knew or ought to have known that it would be unable to provide such repair or replacement services within the warranty period
  • TLM misled consumers that alkaline and/or filtered water can prevent or improve the condition of diseases such as cancer, diabetes, kidney disorders, etc.

CCCS also applied for an injunction against TLM’s director to restrain him from knowingly abetting, aiding, permitting or procuring TLM to engage in the abovementioned alleged unfair practices.

This case exemplifies the CCCS’ strict stance against companies that persistently engage in unfair trading practices in violation of the CPFTA despite repeated warnings issued. Companies should ensure that its trading practices remain in compliance with the CPFTA.

Contravention of the CPFTA may result in the CCCS applying to the courts for a declaration that the errant company is engaging in unfair trading practices and for an injunction restraining the company and its director(s) from doing so. The court may also issue accompanying orders, such as requiring the errant organisation to notify its consumers about the declaration or injunction before entering into contracts with the consumers, and to include a statement about the declaration or injunction in every invoice or receipt. Failure to comply with the court’s orders may result in an offence of contempt of court.

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Author

Andy Leck is the head of the Intellectual Property and Technology (IPTech) Practice Group and a member of the Dispute Resolution Practice Group in Singapore. He is a core member of Baker McKenzie's regional IP practice and also leads the Myanmar IP Practice Group. Andy is recognised by reputable global industry and legal publications as a leader in his field. He was named on "The A-List: Singapore's Top 100 lawyers" by Asia Business Law Journal 2018. In addition, Chambers Asia Pacific notes that Andy is "a well-known IP practitioner who is highlighted for his record of handling major trade mark litigation, as well as commercial exploitation of IP rights in the media and technology sectors. He's been in the industry for a long time and has always been held in high regard. He is known to be very fair and is someone you would like to be in the trenches with you during negotiations." Furthermore, Asian Legal Business acknowledges Andy as a leading practitioner in his field and notes that he “always gives good, quick advice, [is] client-focused and has strong technical knowledge for his areas of practice.” Andy was appointed by the Intellectual Property Office of Singapore (IPOS) as an IP Adjudicator to hear disputes at IPOS for a two-year term from April 2021. He has been an appointed member of the Singapore Copyright Tribunal since May 2010 and a mediator with the WIPO Arbitration and Mediation Center. He is also appointed as a Notary Public & Commissioner for Oaths in Singapore. He previously served on the International Trademark Association’s Board of Directors and was a member of the executive committee.

Author

Ren Jun Lim is a principal with Baker McKenzie Wong & Leow. He represents local and international clients in both contentious and non-contentious intellectual property matters. He also advises on a full range of healthcare, as well as consumer goods-related legal and regulatory issues. Ren Jun co-leads Baker McKenzie Wong & Leow's Healthcare as well as Consumer Goods & Retail industry groups. He sits on the Law Society of Singapore IP Committee and on the Executive Committee of the Association of Information Security Professionals. He is also a member of the Vaccines Working Group, Singapore Association of Pharmaceutical Industries, a member of the International Trademark Association, as well as a member of the Regulatory Affairs Professionals Association. Ren Jun is ranked in the Silver tier for Individuals: Enforcement and Litigation and Individuals: Prosecution and Strategy, and a recommended lawyer for Individuals: Transactions by WTR 1000, 2020. He is also listed in Asia IP's Best 50 IP Expert, 2020, recognised as a Rising Star by Managing IP: IP Stars, 2019 and one of Singapore's 70 most influential lawyers aged 40 and under by Singapore Business Review, 2016. Ren Jun was acknowledged by WTR 1000 as a "trademark connoisseur who boasts supplementary knowledge of regulatory issues in the consumer products industry." He was also commended by clients for being "very responsive to enquiries and with a keen eye for detail, he is extremely hands-on. His meticulous and in-depth approach to strategising is key to the excellent outcomes we enjoy."

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