CASE calls for mandatory safeguards after S$3.82 million in losses linked to fitness closures

It also called for potential cases of wrongful trading to be appropriately investigated, with enforcement action taken under section 239(6) of the Insolvency, Restructuring and Dissolution Act 2018, where the relevant legal requirements are met.

CASE said this may include circumstances in which the collection of substantial prepayments shortly before liquidation warrants closer examination.

“Effective investigation and enforcement, where supported by the evidence, would strengthen accountability and provide a meaningful deterrent,” it said.

The association said its three proposals were complementary and intended to strengthen Singapore’s overall consumer protection framework.

It stressed that the proposals “do not constitute an allegation of wrongdoing against any particular business or individual”.

CASE President Melvin Yong called for the proposed safeguards to be introduced “promptly” to protect consumers, establish clear and responsible standards for businesses and give consumers greater confidence when purchasing prepaid packages.

“Consumers should not continue to bear substantial losses when prepaid services cannot be fulfilled because a business ceases operations,” said Mr Yong.

“The recent fitness closures and sharp rise in reported prepayment losses highlight the limitations of relying solely on voluntary measures. The time has come to introduce mandatory safeguards in sectors involving substantial or long-term consumer prepayments.”