Consumers urged to safeguard prepayments

There is a rise in lost prepayments when businesses close down.

The Consumers Association of Singapore (CASE) has warned consumers of the alarming rise in the amount of prepayments reported lost when businesses close down. 

According to their data, consumers lost $1.05m in 2014, $1.9m in 2015, $3.59m in 2016, and $1.81m in the first half of the current year.

Overall, CASE received more than 2,000 complaints from consumers who reported losses of around $8.35m arising from these business closures.

"Many of these complaints relate to businesses becoming insolvent and failing to deliver the promised goods or services after collecting payment. With the current uncertain economic outlook, the risk of business insolvency may increase," CASE said in a statement.

CASE also highlighted that the Motorcar industry had the highest number of reported losses at $2.74m, followed by the Fitness Club industry ($1.39m), Renovation Contractor industry ($1.02m), Travel industry ($860,000), Hair industry ($700,000) and Furniture industry ($620,000).

"Consumers should be extra vigilant and do their due diligence when transacting with businesses in these industries," CASE noted.