The renovation industry, a key contributor to Singapore’s urban lifestyle and development, is increasingly grappling with a serious challenge. In recent years, cases of renovation nightmare stories and scams taking place in renovation projects have surged, threatening both homeowners and interior designers themselves. These cases not only cause financial distress to the parties involved but also damage trust in an industry that plays a vital role in shaping Singapore’s living spaces.
The growing problem of renovation scams
Renovation scams in Singapore often involve unreliable IDs, shoddy workmanship, lack of transparency, and can take place in a few forms.
The most straightforward case involves misappropriation of funds, where homeowners’ funds paid to the IDs do not go towards the deliverables and works but towards their own pockets. In some cases, this takes place without the firm or bosses being aware of their actions.
In the worst case, a company can even shut down operations without prior warning. When either of these happens, homeowners are left stranded before their renovation even takes place or is completed.
The second and perhaps more sinister form comes about when the homeowner makes upfront payments to their ID firms based on progressive payment milestones, and are promised certain deliverables but the workmanship and end result is not up to expectation.
Oftentimes, homeowners also have little to no say by the time it comes to this, since they had already paid the ID, sometimes in full.
Resistance to change in the traditional industry
The renovation sector is traditionally slow to adopt new technologies. Many firms rely on manual processes and outdated payment systems, clinging to long-standing practices. For small and medium-sized enterprises (SMEs), the perceived high cost and complexity of digital solutions deter innovation. This reluctance not only fosters inefficiency but also leaves businesses and homeowners vulnerable to scams and financial mismanagement.
Also Read: Singapore’s green future – Are homes and condominiums ready for EVs?
Contractors, subcontractors, and designers all play a role and contribute to this problem — making it easier for accountability to slip through the cracks. Without proper digital tracking systems, it becomes difficult for firms and bosses to monitor transactions and hold their interior designer hires accountable throughout the whole renovation & project management process.
On top of that, traditional payment methods like cash or bank transfers, although simple and straightforward, make it easy for dishonest IDs to misuse funds without being detected until it’s too late.
Fintech solutions: Prevention over cure
To address these issues, fintech payment solutions are emerging as a critical defence. These innovations provide secure, transparent methods for managing transactions, enabling all parties to track payments in real-time and ensure funds are used appropriately.
One such platform is HomePay, designed for the renovation sector to combat chance for fraud and irresponsible delivery. HomePay’s escrow payment system ties payments to project milestones, ensuring funds are released to IDs or contractors only when pre-defined deliverables are checked and approved by homeowners. This milestone-based payment approach minimises the risk of scams, guarantees deliverables, and builds mutual trust between homeowners and IDs.
—
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.
Join us on Instagram, Facebook, X, and LinkedIn to stay connected.
Image credit: Canva Pro
The post The growing problem of renovation scams in Singapore appeared first on e27.