Segregated Account Requirements for Businesses that Collect Client Monies through Prepayment Packages

Mr Abdul Muhaimin Abdul Malik asked the Deputy Prime Minister and Minister for Trade and Industry in view of the recent rise in complaints against the beauty industry, whether the Ministry will consider mandating businesses that collect client monies through prepayment packages to place such monies in segregated accounts separate from their operating funds.

The Government works closely with the Consumers Association of Singapore (CASE) to promote fair trading practices and help consumers make informed purchasing decisions, including those that involve prepayment.

Under the Consumer Protection (Fair Trading) Act 2003, it is an unfair practice for a supplier to exert undue pressure on a consumer to enter into a transaction, or to accept payment for goods or services when the supplier knows it is unable to provide the goods or services.

The Government has also worked with CASE to develop industry-specific CaseTrust accreditation schemes. In the beauty industry, consumers of CaseTrust-accredited businesses can claim a refund of the unused portion of their prepayments if the accredited business closes, under the scheme's mandatory prepayment protection insurance.

In March 2025, the Government took the further step of convening an independent Consumer Protection Review Panel to review key consumer concerns, including the adequacy of existing protections for high-value package purchases. The Panel is expected to share its findings and recommendations later this year.