Dog and Cat Grooming Prepayment Trust Faces Hurdles; Taiwan's MOA Proposes Three New Guarantee Methods

(Central News Agency, reporter Wang Shufen, Taipei, 11th) The standardized contract for dog and cat grooming services took effect in May last year. It mandated that if a business receives prepayments of NT$10,000 or more, it must place them in a bank trust. However, no bank was willing to undertake this service. Today, the Ministry of Agriculture (MOA) announced a draft amendment to add three types of履约 guarantee mechanisms: financial institutions, electronic payment institutions, and mutual guarantees among peers.

The MOA today announced the draft amendment to the "Matters to be Recorded and Not to be Recorded in the Standardized Contract for Dog and Cat Grooming Services."

The MOA stated that due to changes in the market environment and commercial considerations of financial institutions, domestic banks have become stricter in their willingness and review conditions for undertaking prepayment trust services for micro-enterprises. To resolve the difficulties for business operators in providing履约 guarantees, three new履约 guarantee methods for dog and cat pet grooming business operators have been added.

According to the new methods, the first is a direct guarantee from a financial institution to the consumer. If the business fails to fulfill its obligations, the institution can refund the consumer for unused services. This allows business operators more flexible use of funds, as they do not need to freeze all prepayments or open a dedicated trust account requiring frequent deposits and withdrawals.

The second method involves a financial institution or electronic payment institution holding the funds in custody. This eliminates the threshold for businesses to set up their own trust, directly using the platform's mechanism to protect consumers. It has high legal compliance and aligns with the trend of digital consumption.

The third method adds mutual guarantee agreements among peers. This eliminates the need to seek services from financial institutions, significantly lowering the capital threshold for businesses. It is suitable for small and medium-sized enterprises or micro-studios.

The MOA said that after the amendment, diverse options will be provided. Dog and cat grooming businesses will be more willing and able to launch higher-value prepaid plans legally and compliantly, thereby invigorating the industry's commercial momentum. It will also effectively eliminate consumers' concerns about "prepaid funds being absconded with or the business closing down with no way to get a refund," creating a safer consumption environment while allowing consumers to enjoy the substantial discounts offered by prepaid consumption. (Editor: Long Bo'an) 1150611