CONSUMERS will get greater protection under strengthened law covering fair business practices to come into force later this year.

Some of the changes to the Consumer Protection (Fair Trading) Act will include regulated financial products and services, motor vehicle dealer deposits, timeshare products and opt-out practices, Minister of State for Trade and Industry Lee Yi Shyan said in Parliament on Monday.

Singapore is also studying the feasibility of a lemon law to give consumers protection against products with latent defects, known colloquially as 'lemons'.

'The principle of 'Caveat Emptor' or 'Buyers beware' remains the cornerstone of the consumer protection framework in Singapore,' he said during the debate on his ministry's budget.

'For it is in exercising their judgment, including rejecting shoddy goods, that our consumers could develop a sharper instinct in differentiating quality offerings from bogus claims.'

He was responding to Mr Yeo Guat Kwang (Aljunied GRC) and Mr Lim Biow Chuan (Marine Parade GRC) who had asked for an update on the review of the Act which came into effect in 2004.

The Act was reviewed in late 2006, led by a taskforce comprising the Consumers Association of Singapore (Case) and the Trade and Industry Ministry.

A public consultation was also conducted last October. Proposals are now being finalised, said Mr Lee who gave a preview of the changes.

First, financial services such as insurance and banking which are currently excluded from the Act will be included. This will enable consumers to seek redress through the Act.

They will also benefit from greater protection in areas such as undue pressure during sale which are currently not covered by the financial services-related legislation.

Second, consumers will be able to to treat all unsolicited goods and services as unconditional gifts from the businesses. This is to stamp out practices where businesses give consumers free goods and services only to bill them subsequently.

For goods and services provided on a free-trial basis, businesses will have to remind consumers that the trial period is ending.

Third, motor vehicle dealers will have to disclose their deposit policies clearly in their sales contracts. This follows feedback that some dealers have been confiscating deposits, citing a failed loan application as the reason but without providing any proof.

Fourth, Case and the Singapore Tourism Board will have a longer time than the current one year to take action against errant businesses.

Fifth, the Act's limit of $20,000 will be raised to $30,000 to take into account larger consumer transactions over the years.

Turning to the complaints against the timeshare industry, Mr Lee said the Act will be changed to allow consumers to cancel their contracts within a five-day cooling period. It is now three days.

Consumers and timeshare businesses could also resolve their disputes faster and cheaper as the ministry is exploring whether the Small Claims Tribunal can hear certain straight-forward cases.