Parallel importers of cars have had a patchy reputation since they first appeared in the early 1990s to give authorised agents a run for their money.

But in about a fortnight's time,some will take a stab at respectability by enrolling in a certification scheme run by consumer watchdog Consumers Association of Singapore (Case).

The scheme, called CaseTrust, will see Case officers examining the practices and books of parallel importers.

Those deemed trustworthy can display the CaseTrust,logo at their showrooms.

Industries which have joined CaseTrust include employment agencies, renovation contractors and travel agents.

This is the first time firms in the motor trade are joining the scheme, even though car-related complaints- involving mainly parallel importers and used car dealers regularly top Case charts.

The notoriety is shared by time-share firms, beauty salons and property agents.

Case said it received 757 complaints against motor firms in the first six months, of which 61 were handed over to the association to resolve.

Of these, 52 involved parallel importers .Singapore Vehicle Traders Association president Neo Nam Heng, the parallel importer which is the main driver behind the move, said: "We want to segregate the bad eggs from the rest to enhance the image of the trade".

Motor companies that want to be CaseTrust-certified must undergo a stringent audit by Case.

Their track record and financial health will be scrutinised and they must not accumulate more than five complaints a year.

Observers said this should weed out fly-by-night outfits which keep changing names and locations because of soured deals with customers. "There will be no $2 companies," Mr Neo said.

Companies will also have to put their money where their mouth is. They must buy a $50,000 insurance bond, which will be used to settle disputes with customers.

Disputes will be settled by a panel which includes representatives from Case, theFinancial Industry Disputes Resolution Centre and a retired court judge.

If the panel decides that the dealer is in the wrong, the insurance firm will pay the consumer.

It will then recover the sum from the dealer responsible. Mr Neo said: "This is a resolution body that will have real teeth."

CaseTrust for the motor trade is expected to be launched at the end of the month.

Case executive director Seah Seng Choon said the industry's move shows, "resolve and commitment to clean up the image of the industry".

But the Motor Traders Association, a body for authorised car agents, had a lukewarm response. President Michael Wong said:"The question is what can the scheme do for me. I've been around for over 20 years and I'm not about to collapse like a deck of cards."  

How to get certified...

THE Consumers Association of Singapore (Case) will spend four to six weeks auditing a motor company before deciding if it can be CaseTrust-certified. They will have to abide by a code of conduct, which says:

• Dealers must refund the
  deposit if the customer's car loan
  application is not approved.
  However, they may be allowed
  to charge an administrative fee
  of up to $500.
  
• Dealers must state clearly the
  certificate of entitlement (COE)
  amount they will bid. Currently,
  many fudge this. Some delay
  bids for certain customers so
  they can use their deposits to bid
  for buyers who pay higher
  prices.
  
• The COE rebate level must
  also be specified. This refers to
  the amount of rebate a buyer is
  entitled to if the COE premium
  falls.
• The delivery timeframe must
  be clearly stated. The guideline
  discussed is 48 days.
  
• Equipment and accessories
  must be clearly noted.
  Sometimes, promises from the
  salesman- such as alloy wheels
  and leather upholstery- go
  unfulfilled.
• The vehicle's year of
  manufacture must be clearly
  stated.
  
• Warranty terms must be
  clearly stated.
• Customers must be alerted to
  safety recalls

Christopher Tan

This article was first published in The Straits Times on August 13,2008.