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

Consumers reported nearly S$6.7 million in prepayment losses from January to September, about 147 per cent more than for the whole of 2025.

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05 Oct 2026 12:38PM (Updated: 05 Oct 2026 12:42PM)

SINGAPORE: The Consumers Association of Singapore (CASE) has called for mandatory safeguards in sectors involving substantial or long-term prepayments, after consumers reported nearly S$3.82 million in losses following the closure of several fitness businesses.

The association said on Monday (Oct 5) that it received 1,610 complaints linked to the closures between Sep 10 and Sep 30.

Of these, 1,518 complaints involving about S$3.78 million in reported losses were related to True Fitness and True Yoga, whose outlets closed on Sep 11.

Another 92 complaints, involving about S$32,800 in reported prepayment losses, were related to Yoga Inc, which closed its remaining outlets last month.

CASE said it had assisted affected consumers in lodging claims and proofs of debt with the relevant liquidators.

From Jan 1 to Sep 30, consumers reported nearly S$6.7 million in prepayment losses to CASE.

“This was approximately 147 per cent higher than the S$2.71 million in prepayment losses reported for the whole of 2025,” it said.

“The scale of these reported losses underscores the need for stronger safeguards, particularly as consumers are generally treated as unsecured creditors when a business enters liquidation,” it added.

CASE cited measures introduced or proposed in jurisdictions including Hong Kong, Taiwan, the United Kingdom and New York State to protect consumers who make advance payments.

Singapore should similarly consider mandatory safeguards in sectors involving substantial or long-term consumer prepayments, CASE said.

How other jurisdictions protect consumer prepayments

Hong Kong

The city has proposed a seven-day cooling-off period and a 14-day refund period for prepaid beauty and fitness contracts. 

Other proposed measures include a two-year cap on contract duration and enhanced enforcement powers for Customs and Excise over payments accepted in circumstances prohibited under the Trade Descriptions Ordinance. 

The government is also consulting on whether the protections should apply to contracts worth HK$3,000 or more, HK$8,000 or more, or HK$15,000 or more.

Taiwan

Authorities require fitness centres to provide consumer protection mechanisms for prepaid fees, such as trust accounts or performance guarantees. The required protection must cover at least 50 per cent of fees collected.

United Kingdom

The government has introduced targeted protections for certain consumer savings schemes. Since Jan 1, businesses operating qualifying schemes must safeguard consumer payments through arrangements such as insurance or trusts, allowing consumers to recover protected funds if the business becomes insolvent.

New York

The State requires health clubs to provide financial security, such as a bond, letter of credit, or certificate of deposit, to protect consumers who prepay for memberships. 

Health club contracts are capped at 36 months, with annual fees limited to US$3,600. Consumers also have three days after signing to cancel their contracts.

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PROPOSED SAFEGUARDS

CASE proposed three measures: mandatory cooling-off periods for high-value prepaid packages, mandatory CaseTrust accreditation in sectors involving substantial or long-term prepayments and appropriate investigation and enforcement in potential cases of wrongful trading.

Mandatory cooling-off periods would give consumers time to consider commitments involving substantial upfront payments and cancel without penalty, CASE said.

The association also proposed making CaseTrust accreditation compulsory for businesses in sectors involving substantial or long-term consumer prepayments, including the beauty and fitness industries.

Such accreditation would require safeguards including prepayment protection, transparent pricing, clear contractual terms, proper disclosure and reasonable refund arrangements, CASE said.

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.”