Are they going overboard with their requirements? They seem to be quite happy to give hassle to their customers.
www.tankinlian.com/latest.aspx
They also require me to find out the KVA of the electric supply. As I do not know the answer, I have to find out from the developer. The staff who answered my call also did not know the KVA. So, it was really a hassle.
Why do they ask for it? They want to ask for the appropriate deposit based on the KVA. It would have been easier if they collect an intial deposit and adjust it according to the consumption. There is a simplier way for consumers, but they prefer their way for their own convenience. They don't care about the hassle that they give to others. It seems to be quite common in Singapore!
Tan Kin Lian
The reason is very simple. You are entering into a contract with SP Services. Just like insurance, where a third party cannot apply for a policy on behalf of someone, SP Services can only enter into a contract with the correct party.
ReplyDeleteThere has been cases of people stealing electricity from another person's premise. You cannot discount the possibility of someone opening a bogus account, activating the electricity supply, then stealing electricity from that premise and leaving SP Services with nobody to collect the bill from.
I work for a service provider (not SP Services) and I can assure you we do even more stringent checks of the company. We require the company to submit its M&A, Certificate of Incorporation, board authorisation for signatory, and banker's guarantee for deposit. This is standard contract procedure and our customers fully understand the reason for such documentation (we also provide the same to them).
BTW there are more than a million electricity accounts in Singapore with hundreds opening and closing accounts in a day. We like to think we're the only customer deserving special service but we're literally just one in a million.
SP Services already collect an adequate deposit (see their enquiry about KVA). I don't see how anyone can gain access to the premises to take the electricity supply from another premise. It is easier for them to do it in their own premises.
ReplyDeleteJust because it is possible for someone to do it, it seems that every one has to suffer the hassle.
Quite typical of the kind of thinking in Singapore. Is it called "kiasu"? Or just lack of common sense?
I am not asking for special attention. I am only asking for less hassle. I belief that many of the one million customers would prefer less hassle too!
ReplyDeleteIt's standard practice for SP has to make sure that the account holder is the lessee (owner) or one of the the co-lessees (owners).
ReplyDelete1. It prevents a lessee from using a temporary tenant to open utilities account, then default on the bill when the tenant left.
2. There's also the issue of third party liability to visitors to and neighbours of the premises in case of casualty and damage caused by use or misuse of SP utilities.
KVA is kilo-volt ampere. The electric cabling contractor should provide, e.g. regular powepoints are different from aircon powerpoints and total powperpoints.
I don't think it's fair to say it's only Singapore. Go to any country and try to open an utilities account without proof of lease or ownership and I don't think it can be done too. I've rented apartments in US and Thailand. Both are the same too.
ReplyDeleteIt's worth exploring, based on the numbers mentioned in another comment, if we can save 1 hour for each account, we can save "more than a million" man hours (and "hundreds" of man hours in a day), not too bad. Maybe that's why the government thinks productivity/efficiency can still be improved.
ReplyDeleteA few days ago, HDB announced that the 1 millionth HDB flat was completed.
ReplyDeleteSP service requires every account to place a deposit for that account. For a 4-room flat the deposit is $70. Hence, SP service will have $70 million in its bank account. What it does with the money is anybody's guess. It is better than a listed company where the latter still has to issue shares but SP service get $70 million for nothing.
Vincent Sear, do you remember whether you were required to place a deposit for opening an account when you were in the US and Thailand?
I stayed for couple years in UK, and I didn't need to put up a deposit when opening a utilities account. But that was over 10 years ago, so things may have changed. Anyway I remember it was more competitive overseas as there are more than 1 service provider to residents --- I switched between BP and other smaller local companies 3 times to take advantage of lower rates.
ReplyDeleteOh, in the UK I also could request a utilities account setup simply by calling a 800 toll free number from my apartment block's common payphone. (1st day land in UK, blur sotong, no phone no nothing, luckily got tips from friendly neighbours) BP sent a meter-man the next day to verify and activate the utilities. The guy just looked at my passport and the lease agreement. No need to give documents, make photocopies etc.
ReplyDeleteBut as I said, all this over 10 years ago. Maybe now they're more paranoid or hard-nosed, cut cost etc.
Captaincaveman, in US, yes, I was asked to place a US$200 deposit. In Thailand, no, none was asked for, but indirectly, yes. The Thai landlord signed guarantor, and the rental deposit was computed to include utilities liabilities.
ReplyDeleteThe SP services deposit started more than 10 years ago. If I had put that $70 deposit into a saving account I could have at least $73.50 by now assuming the interest is 0.5%. So can you imagine how much SP services could have made using all those deposit money?
ReplyDeleteYou get your electricity on credit. What if you suddenly decide to abscond? What's SP Services to do with the unpaid bill then? It still has to pay the electricity generators for the electricity.
ReplyDeleteDo you think that, lucky for you, you got the electricity "for free"? As long as other people pay, it's free of charge to you?
SP Services collects a deposit to protect itself from default risk. It's no different from landlords collecting a deposit from their tenants.
Spur, Mr Tan's is opening a non-residential account under company name. Hence the requirement for corporate documentation. For a domestic account, you can open it in person, via phone, fax, mail, online or even SMS.
ReplyDelete@ eve+line,
ReplyDeletehow many Singaporeans will abscond from paying? Besides, where can they run to?
if SP services were to ask PR or foreigner to place a deposit of $700 or $7,000 I can understand the fear of them running back to their own country without paying. But Singaporean? Come on give me a break!
Wow, you know, you're totally right. It totally makes sense. There's absolutely nothing more to be said about this.
ReplyDeleteSay, can you lend me $1,000? Sorry, no collaterals or guarantor. I can give you a copy of my IC? Anyway, don't worry. Afterall, I'm Singaporean. How many Singaporeans will abscond from paying? Besides, where can I run to?
@ eve+line,
ReplyDeletewell if you lend a Signaporean money and you have his particulars such as nric number then there are ways you can get back your money through the judiciary system. As for companies like SP Services, they will have their lawyers to do the work for them.
Why punish everybody just because a handful of them may default on payment? By doing so, SP Services ends up with million of dollars to do whatever they want with it. Better than borrowing from the banks - no interest rate to worry.
SP only retains about one month worth of deposit. In home or shop rentals, three-month is common.
ReplyDeleteIf you want SP to stop retaining deposit, then SP can go straight law by law. The moment someone fails to meet a bill due, straightaway cut of water, electricity and gas. No grace period. If you want landlords to stop retaining deposits, same, the moment someone fails to meet a rental due, straightaway evict him onto the street. No grace period.
Recover debt from the judiciary system... really? Have you done business before? Do you have any idea how debt recovery is done?
ReplyDeleteIf it's really so easy, ah long will no longer have to hang pig's head on people's door. Debt collection agencies will have to close down because it's soooo easy to recover debt. Just go to the courts can liao.
Because why? Court time is free! Judge time is free! Lawyer time is free!
On the other hand, the electricity SP Services buy to resell to domestic customers is not free. They also have to do settlement every day (i.e. pay every day). They also have to pay PUB for the water, pay the rubbish collectors for refuse collection, whether or not they collect any money from the customer. So cash sitting there idly earning interest? I don't think so.
(Anyway I do not know what they do with the cash because I'm not from SP Services.)
BTW, $70 deposit for 4-room, I think it's not even enough to cover 1 month bill.
BTW I had a look at Singapore Power's financial statement. SP Services doesn't state their customer default rate. But the Group financial statement had a provision of $49.6 million of impairment losses for trade receivables in 2010.
ReplyDeleteThis is for the entire SP group (i.e. include their Singapore and overseas operations) so I do not know how much can be attributed to SP Services.
If SP wants to start their business, they will have to take the risks of doing business and not pass the buck to the consumers. So this issue of collecting deposits and all the other major inconveniences should be borne by the business owner and not pass to the consumers. Major business owners like SP have the necessary financial and legal clout to get justice easily. Try owing the Town Council money and you will know what I mean. So why still have to pass the risk to consumers in its own favour by collecting deposits? Even if they want to collect deposits then they should add the interests in to be fair to consumers.
ReplyDeleteBy "justice" do you mean, if you owe the utilities bill, straight away cut your electricity and water supply, call bailiff in to sell off your furniture, and do not restore supply until your bill is fully paid?
ReplyDeleteBecause this is the fairest. You owe money, you pay. The debt doesn't just fly away and disappear. It must be paid.
Or, want to be a bit more humane, spread the debt to all the other obedient customers like you and me, we all chip in a bit more, other people don't pay never mind, we all help a bit lah. Hmm maybe I also don't pay because other people will help me pay.
So how? I dunno man, I don't run a business. I just talk only.
>>Even if they want to collect deposits then they should add the interests in to be fair to consumers.
ReplyDeleteWell, since the deposit is sometimes not even enough to cover a month's bill, since SP actually have to pre-pay on behalf of customers, and since customers are usually given about 2 weeks to pay the bill, SP Services is actually lending money to customers.
How about you pay SP Services interest then?
@ eve_line,
ReplyDeleteof course it is not free of charge to get your money back through the judiciary system. It can be tedious and time consuming to do so too. No, I have never done any business before. Have you? My point is that there is avenue for you to get back your money.
Base on your logic, all the supermarkets in Singapore should also start demanding their customers to place a deposit if they intend to buy goods in their stores. Why? Because the supermarkets have to pay their suppliers for the goods they displace for sale in their store, they have to pay the utility bills, they have to pay their employee, they have to pay their rental, etcs.
Like what Falcon said "If SP wants to start their business, they will have to take the risks of doing business and not pass the buck to the consumers. So this issue of collecting deposits and all the other major inconveniences should be borne by the business owner and not pass to the consumers. Major business owners like SP have the necessary financial and legal clout to get justice easily."
You say you have avenue to recover money, but you cannot specify what. Well I can, because my colleagues have attempted to recover debt before. It is a tedious, expensive process and even if the court issues orders, you may still not see your money.
ReplyDeleteThe idea is not to go there in the first place. Hence the due diligence, deposits / banker's guarantee etc. But SP Services has no choice but to accept all customer applications. They cannot turn away credit-unworthy customers like most other businesses can.
Buying goods at a supermarket is a different thing. If you know a bit of contract law, the customer is not obliged to pay until he walks out of the supermarket. If he walks through the cashier for payment, the contract is completed. If he attempts to walk out without paying, that's automatically classified theft and he is now subject to criminal proceedings.
A contractual relationship already exists between SP Services and the customer once the electricity supply is turned on. When electricity flows into the residence, the customer has already started owing money to SP Services. It's just that SP Services decides to bill the customer every month instead of every day or every week. Meanwhile, the customer enjoys "free electricity" or more accurately electricity on credit.
Risk management is part of doing business in Singapore. You expect SP Services to take on the risk, sure thing, pay for it. You will, either directly or indirectly. SP Services can buy insurance for instance. Then book the insurance as part of OPEX and recover it from revenue. Or start billing customers at shorter intervals, you receive a bill every week and immediately payable or risk electricity and water supply cut. How about that?
But to expect SP Services to waive deposits and do nothing to manage customer default risk is asking SP Services to do a very irresponsible thing. Who wants to do this kind of business?
Everybody wants to pass the buck and thinks that it can be done for free. So easy right?
@ eve+line,
ReplyDeleteBy avenue I mean through the judiciary system which I have already stated clearly in my earlier posting.
You seem to have some knowledge on contractual law, risk management and what have you. However, coming back to the issue of SP Services deposit for opening an account, it is clear that we have opposing view and that we will not be swayed easily from our views. It is normal for people to have different views on everything.
Lastly, I shall leave it to the readers to form their own opinion and better still if they could just make a simple posting here stating whether they are for or against the SP Services of requesting a deposit.
As it stands now it is 2 against (myself and Falcon) to 1 for (eve+line).
Wishing you a Merry Christmas and a Happy New Year!
SP services requires that I make the deposit of $500. I think this is completely illegal issue. Why should I borrow $500 to that organisation for one year use without paying me the interest? Of course, they rotate millions by just collecting deposits. It's an illegal business in many normal countries. Why is it legal here in Singapore? Is it possible to judge them in court? Is there any law regulating this issue and giving the permission to the SP services to act as they do?
ReplyDelete