📋 Tender Overview
The State Courts have declared that Fashion Interactive Pte. Ltd. Fashion Interactive an e-commerce retailer selling shoes on its website myglamorous.sg and its director Mr. Magaud Olivier Georges Albert Mr. Magaud have engaged in unfair trade practices under the Consumer Protection Fair Trading Act Cap 52A the CPFTA and ordered them to cease such practices declaration and injunction. The Court Order takes effect from 6 January 2020.The Competition and Consumer Commission of Singapore CCCS applied to the State Courts on 28 November 2019 to obtain an injunction against Fashion Interactive and its director Mr. Magaud to stop them from engaging in an unfair practice known as a subscription trap on its shoes e-commerce website myglamourous.sg. A subscription trap is a practice by suppliers to mislead consumers into signing up for a recurring subscription by giving consumers the impression that they are only making a one-off purchase of goods andor services. If consumers do not cancel such subscriptions typically within a grace period they would be liable for recurring charges.The Consumers Association of Singapore CASE had earlier intervened to help affected consumers obtain refunds for the charges made by Fashion Interactive to their creditdebit cards. However CASE continued to receive new complaints about Fashion Interactive automatically charging consumers recurring monthly membership fees without their knowledge or consent. CASE issued a Consumer Advisory in January 2019.CCCSs FindingsFollowing referral from CASE CCCSs investigations revealed that Fashion Interactive had not sufficiently disclosed key information to consumers and consumers were misled into purchasing a membership subscription with recurring monthly fees. Investigations also revealed that Mr. Magaud directed the design of the advertisements and myglamorous.sg website. He wanted the focus to be on the discounts and shoes and not on the membership subscription and its recurring monthly fees.Consumers were enticed to click on the SHOP NOW action button on Fashion Interactives advertisements placed on FacebookGoogleAd by the greatly discounted prices shown. Upon clicking through and being led to the product page on the myglamorous.sg website consumers were exposed to more images of shoes and discounted prices. Throughout the purchase process there was no notice provided to consumers that they were unable to purchase shoes at the advertised price without first subscribing to Fashion Interactives VIP Club membership with recurring monthly fees. Consumers were led to believe that they were consenting to a one-off purchase of shoes when they clicked on the PLACE YOUR ORDER button at the payment page. Under the prominent and boldly-coloured PLACE YOUR ORDER button was a check box with an opt-in sentence.CCCS found the opt-in sentence failed to adequately inform consumers that by clicking on the check box they would be consenting to Fashion Interactives membership terms and recurring monthly fees. Further CCCS found that the need to click on the check box could be bypassed. For consumers who did not click on the check box and attempted to complete the transaction by clicking on the PLACE YOUR ORDER button a pop-up box would appear asking for the consumers consent to agree to the Terms and Conditions. CCCS found that in this pop-up box key information stating that the consumer agrees to subscribe to the membership and be charged a recurring monthly fee was omitted. Consumers who proceeded to click the I agree button did not know that they had consented to be charged a recurring monthly fee. Further Fashion Interactive neither provided information of the membership subscription and its recurring monthly fees in its post-purchase email sent to consumers nor sent any invoices or receipts to notify its customers of the membership subscription and recurring monthly fees.Court OrderThe Court Order prohibits Fashion Interactive whether by its directors agents employees or otherwise from misleading consumers into signing up andor continuing with a subscription service requiring payment or recurring payment. In addition the Court Order prohibits Mr. Magaud from abetting Fashion Interactive in misleading the consumers into signing up andor continuing with a subscription service requiring payment or recurring payment relating to online transactions or services when it had appeared to the consumer that he was purchasing goods or products rather than services or recurring services.Fashion Interactive must notify CCCS of any changes related to its business including changes to its internet addresses or name and if it establishes a website or mobile application for consumer transactions. In addition Mr. Magaud must notify CCCS of the status of his employment directorship and partnership. The Court Order also requires Fashion Interactive to perform the following for a period of three years i.e. until and including 5 January 2023 a display the details of the declaration and injunction on the landing page of its website b before entering into a contract with consumers notify them about the declaration and injunction and obtain the consumers acknowledgment of such notification and c include in every invoice or receipt a statement that a declaration and injunction has been granted against it.The use of subscription traps contravenes the CPFTA which states that it is an unfair trade practice to omit to provide a material fact to a consumer use small print to conceal a material fact from the consumer or mislead a consumer as to a material fact in connection with the supply of goods or services. Retailers should provide clear and accurate information on the price of goods and services including costs such as subscription fees in their advertisement.
