Complaints and Investigations against Car Dealers for Misleading Financing-related Sales Practices

Mr Yip Hon Weng asked the Deputy Prime Minister and Minister for Trade and Industry (a) whether there has been an increase in complaints, investigations or enforcement actions in the past three years against car dealers for misleading or unfair financing-related sales practices; (b) whether existing consumer protection frameworks adequately cover dealer-provided financing arrangements outside MAS regulation; and (c) whether safeguards or disclosures are required to address potential conflicts from dealer-linked financing commissions.

In the past three years, the Competition and Consumer Commission of Singapore (CCS) and the Consumers Association of Singapore (CASE) received, on average, under 10 complaints a year on misleading or unfair financing-relating sales practices by car dealers.

In addition to the Monetary Authority of Singapore's motor vehicle financing rules, we have other regulatory frameworks and safeguards in place to protect consumers against misleading or unfair sales practices. Under the Consumer Protection (Fair Trading) Act (CPFTA), businesses, including car dealers, are expected to provide accurate and reliable information about their goods and services. Consumers who encounter misleading or unfair practices may approach CASE for assistance. The CCS can also take action against businesses which persist in egregious unfair practices.

In addition, the Hire-Purchase Act (HPA) protects consumers who enter into hire purchase agreements for cars from unfair terms and hidden costs. For example, the HPA mandates the disclosure of key transaction information, such as the cash price, the applied and effective interest rates, and the total amount payable, so that consumers can make informed decisions. This is also consistent with the provisions under the CPFTA, which require prices and their accompanying conditions to be accurate and clearly communicated to consumers.

Furthermore, under the Misrepresentation Act, consumers may rescind a contract and claim damages against the car dealer if they entered into it because of the car dealer's misrepresentation.