In brief

On 18 May 2023, the Competition and Consumer Commission of Singapore (CCCS) issued a warning against Salon One Pte Ltd and its related entities (“Salon One“) for its unfair practices under the Consumer Protection Fair Trading Act 2003 (CPFTA).

Investigations by the CCCS revealed that Salon One had made unsubstantiated representations on its herbal head spa treatment as being able to prevent various diseases such as Alzheimer’s disease, brain stroke, etc. Salon One had also made false representations that there were price discounts, where in fact such discounts never existed as they were discounted from prices that were never offered.

To address the CCCS’s concerns, Salon One and its director gave the CCCS undertakings to ensure compliance with the CPFTA.

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In more detail

Between October 2017 to August 2022, the Consumers Association of Singapore (“CASE“) received 95 complaints from consumers against Salon One.

Despite several of Salon One’s entities entering into a voluntary compliance agreement with CASE in October 2019, Salon One persisted with its unfair trading practices.

In October 2020, CASE referred Salon One to the CCCS, which conducted investigations into the conduct of Salon One. Investigations revealed that Salon One engaged in unfair practices, such as the following:

• Making unsubstantiated representations in promoting its herbal head spa treatment, in particular, that it could prevent Alzheimer’s disease, brain stroke, cerebral haemorrhage, etc.
• Falsely representing to its consumers through marketing or staff that there were discounts for basic haircuts for both members and non-members when they never existed

Other findings from the CCCS’s investigation were that Salon One performed the following:

• Displayed outside its premises banners offering discounted prices for specific services for an “opening promotion” that had been kept up long after the stated opening dates, which the CCCS found to create a false sense of urgency for consumers as they were led to believe that the discounted prices were available for a limited period only 
• Engaged in persistent sales talks, which caused consumers to feel pressured to buy services and products even though the consumers had already declined or expressed that they had no interest

To address the CCCS’s concerns, Salon One and its director gave the CCCS undertakings to ensure their compliance with the CPFTA. The undertakings require that Salon One and its director, amongst other things, would carry out the following:

1. Stop engaging in the identified unfair practices or any other unfair practices under the CPFTA
2. Not make any claims or guarantees about the results, benefits or effects of their treatments or products unless the claims or guarantees are substantiated by scientific data or other objectively verifiable evidence
3. Take all reasonable steps to ensure that their staff do not exert undue pressure on consumers to buy their products or services
4. Include in their contracts/invoices/receipts for their services or products a term that allows consumers a five-day cooling off period to cancel their transactions, and make sure that this term is acknowledged by the consumers
5. Establish an internal compliance policy to ensure that their marketing materials and practices comply with the CPFTA 
6. Provide staff training on what acts constitute unfair practice under the CPFTA and maintain records of the training completed

Key takeaways

The CCCS continues its strict enforcement against errant companies that persistently and egregiously engage in unfair trading practices in contravention of the CPFTA. If necessary, the CCCS can seek declarations and court injunctions against errant businesses. The court may also issue accompanying orders, such as requiring the business to notify its consumers about the declaration or injunction before entering into contracts with its consumers and include a statement about the declaration or injunction in every invoice or receipt. Failure to comply with the court’s order may result in an offence of contempt of court.

For further information and to discuss what this development might mean for you, please get in touch with your usual Baker McKenzie contact.

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