Entries from May 2007
The number of bankruptcy of small and medium sized business has been growing in both March and April, comparing with previous year; the ratio of increasing is 1.6 times in March, and 1.8 times in April compared to the same month in last year. This tendency is predicted to be stronger, Sankei Shimbun said on May 31, 2007.[1]
The newspaper indicates the relation between the expansion of number of bankruptcy and the reform of Money Lending Business Law. The revised law deprives the right withholding the interest beyond the restriction of the Interest Rate Restriction Law from money lending businesses. The news also says that the businesses strengthen the tendency refusing loan applicants who would be foreseen default. This kind of argument has been strongly insisted by money lending business in the process of law reform, and they firmly requested to maintain the previous law for protecting borrower’s interest.
However, it is only empirical claim, which is not proved, and is unpersuasive. Moreover, it does not become any rationale to maintain current situation that the money lending businesses predatory profit based on high interest rate from a borrower.
UK has not cap to the interest rate for money lending business. Home loan interest rate is unbelievably high, there for it should be regarded as usurious loans in my view. It is difficult for me to understand why UK consumer accepts this incredible situation.
Categories: loan
The Fair Trading Commission published the report concerning the enforcement of the commission in 2006 fiscal year, on May 30, 2007.[1]
Generally, the number of administrative measures seems decreasing totally, including unfair trading cases; the unfair trading cases to be took some measure were only 4. On the other hand, the number of complaints to the commission is increasing, 5250 in 2006 fiscal year.
The commission introduces several regulated cases in this report; the defendant company sought his distributor to sale the goods as fixed price sales exploiting his superior position of power. The defendant company threatened the distributor to stop supplying the goods if the distributor did not follow defendant’s indication.
Categories: unfair trade practices
Tokyo Appeal Court accepted the claim of the plaintiff and ordered to the Nomura Syouken, giant securities company in
Japan, to pay JPY 57,500,000 as damage compensation, on May 30, 2007.
The plaintiff claimed to the defendant company to pay about JPY 100,000,000. According the rule, the plaintiff is a single woman, now 56 years old. She was lured securities transaction by a employee of the defendant several years ago, but at the time she had been quite busy for nursing care to his father at the trading period, therefore she was not afford to manipulate her transaction. In other word, she was in the situation to be forced to be obeyed by the employee’s advice and recommendation on her trading.
The court said that the employee took advantage this situation, and exploited his position of power and he continued to solicit her to many high risk societies trading such as EB bonds which caused her a huge amount loss. The court also said it was equivalent for the customer’s securities account to be ruled substantially by the broker, therefore the trading practices was regarded as unfair practices; it did not consider the plaintiff’s ability, intention of investments, financial status, and on the other hand the employee‘s advise substantially intends to get charges overt these consecutive trading by the plaintiff’s loss.
Eventually, the court concluded that the defendant was regarded unfair commercial practices were equivalent to pay damage compensation based on tort. The court expanded the amount of damage compensation as ten times rather that the ruling of district court. The district court only admitted the compensation regarding the EB bond transactions in virtue of high risk and not suitable for the plaintiff.
The Securities Product Trading Law that recently revised the Securities Trading Law strengthens consumer protection, and seeks for the securities business to take account of the customer’s suitability, including investigating it prior to both making a contract and advising a transaction by the regulation.
Categories: securities
“COMPARATIVE REPORT ON CONSUMER POLICY REGIMES”, compiled by the DTI in 2003, is quite interesting. Regarding consumer redress, the country report concerning
Japan concluded “Most consumer complaints regarding goods and services are handled through negotiations between consumers and businesses.”
This remark is right and wrong. Actually, the ratio of consumers who file complaints to the court is few. But it would not be few comparing to EU countries. It is pointed out in “Product Liability Litigation in
Japan” on March 25th 2007.
For instance, the tendency can be found in investment disputes, especially securities and futures. The court rulings regarding securities can be view in following website:http://www2.osk.3web.ne.jp/~syouken/ The number of court rulings that consumers won is 400 so far. These rulings were almost within a decade and the number would be more and more if consumes failed.
The number of litigations of commodity futures transaction between consumers and business is more than securities. Osaka District Court has 26 civil divisions. Probably each divisions deal with several cases constantly.
Of course it must be admitted that almost consumer disputes are resolved through negotiations between consumers and businesses as above notice. However consumer who files lawsuits is not so few. And the court decision has been pulling up the level of consumer relief. The role of litigation or court decision is quite important in
Japan
Categories: redress
In 2006 fiscal year, the number of administrative orders by the Fair Trading Commission in violation of the truth-in-advertising laws was 689. The commission established 32 orders to eliminate the ad. The figure is highest during past 33 years; advices were 650, and warning was 7. It was reported on May 23, 2007[1]
The order is based on the Law for Preventing Unjustifiable Extra or Unexpected Benefit and Misleading Representation (the Truth-in-advertising Law) The law imposes a business to submit any rationale that is equivalent for his ad to be proved by if the commission asks to provide it. If the business cannot respond it, the commission can regard the ad as unfair. The number was 6 in the year.
The Truth-in-ad Law prohibits the misleading advertisement. Whilst the Anti-monopoly Law also forbids the misleading inducement of customer, the Truth-in-ad Law is special regulation to protect consumer through establishing and maintaining fair trading between businesses.
The commission accepts the consultation from consumer regarding the law. The number is 22,782 in 2006. The figure seems in certain level for several years. Especially the consultation concerning a pay nursing home for elderly, country of origin in products and label of foodstuff is in particular.
The law prohibits the misleading ad as unfair commercial, but not regulates the aggressive c0mmercial practices like EU Unfair Commercial Practices Directive. The criteria of misleading ad provided by the truth-in-ad law are adapted substantially in several consumer law and business law. Simultaneously these laws do not stipulate and prohibit the aggressive advertising as unfair commercial practices.
For instance, the Specific Trading Practices Law regulate the ad of distance sales, multi-level marketing scheme, work-in-home scheme and continuation services such as language school. These laws only prohibit the misleading ad, but not aggressive one. It is necessary to regulate the aggressive commercial practices.
Categories: unfair trade practices
According to the National Police Agency, the number of processing consultation and investigation tends to decrease in comparison with previous fiscal year from 1,448,710 to 1,394,227.The ratio of scam or bogus trading trouble is 19.7%, while the unfair trading and contract trouble is 9.2%.[1] The reason of reduction is not explain in details. Personally, it is supposed that it gained success of restriction and enforcement against predatory lending business violating investment law.
Categories: enforcement
The Central government will start to provide consumers accidental information occurred by defective products from 2008 fiscal year. Consumers can access and use the information to prevent to face similar accident and get damages. It reported on May 27, 2007[1].
The information that is consisted in the data base will be collected by internet from consumers, businesses and administrative bodies including the police department, fire department and medical institutions in central and rural area.Currently, the administrative bodies that collect and analyze such information vary in several ministries or authorities who have jurisdiction to the products or services.
Actually the corporation having together of accidental information amongst administrative bodies is insufficient. It might also become significant causation of the delay of prompt and suitable response by the administrative bodies to the prevention of same accident by defective products.
Categories: enforcement · product safety
We have not ombudsman scheme like European countries so far.
By the way, , there are some private bodies that examine the activities of administrative body and major businesses. Shimin (Civil) Ombudsman[1] network is organized by lawyers and accountants and has 80 branches in nationwide. It targets the inappropriate activities and enforcement by rural governments. The group depends on volunteers and donation that is gained as rewards by the litigations in addition to membership fee.
On the other hand, Kabunushi (shareholders) Ombudsman[2] aims to supervise the business activities. The group is also organized by layers and accountant voluntary. The group has been filing many lawsuits to the major companies so far as representation of share holders.
Recently, our government may adapt an ombudsman system from this autumn. According to the Cabinet Office, the organization would be set under the advisory panel to the Prime Minister, “Kokumin Seikatsu Shingikai”. It was revealed on May 17, 2007[3], thereafter reported May 17, 2007 again[4]. The role of the body seems to target the products accidents.
Inducement of introducing the system is recent consecutive serious accidents: gas water heaters, lifts, jet coaster and so on. It is pointed out that the inappropriate supervision and/or enforcement by administrative bodies are in background of these incidents. The predicted body will be organized by specialists of law and technology. The onus of it is collecting information, investigation and making proposal to the central government after the incident incurred.
Categories: enforcement
Work-in-home scams or disputes have been more increasing along with progressing internet age in
Japan[1]. The status quo of disputes was reported by the report compiled by the Tokyo Metropolitan government in 2002[2] and 2004[3]. Regarding disputes with Credit Company, the National Consumer Affairs Centre reported the finding in April 2006[4] and Kanagawa prefectural government issued the same report[5] in 2004.
Provably the manner of scam would be as same as in other countries.
The rogue traders solicit consumers to participate the work-in-home businesses using personal computers, inducing to make a good profit. In those cases, the traders, in condition to introduce the works, ask for the consumers to have skill to use several sorts of computer software, the trader says, and the consumer is stirred up to purchase the learning materials and computer hardware from the trader. Notwithstanding, even if the consumer finishes the training menu, the trader never introduces any work to the consumer and the victim can not only recover the initial investment.
The Trade Practices Act in
Australia regulates this kind of scheme comprehensively (art. 59). In
Japan, the Specific Trading Practices Law regulates the work-in-home. But the law is less protective than the TPA in virtue of not comprehensive. The law limits the goods, rights and services regulated. The computer data processing services was added the list several years ago after the disputes regarding work-in-home scam were seriously expanded. Contrary, for instance,
The law prohibit the touting the scheme (art. 53(3)). The trader is obliged the information duty and prohibit the unfair trading practice like as false representation and omission of material matter, in addition duress.
On the other hand, a consumer has a cancellation right within 20 days since the contract document stipulating the cancellation right delivered (art. 58(1)) If a trader makes a false representation, the consumer can rescind the contract (art. 58-2(1))
The administrative body supervises the trader and it can seek the trader any material which prove that the trader does not commit the false representation (art. 54-2).
Categories: work-in-home
The Tokyo metropolitan government ordered to suspension business during 1 year to a multi-lever marketing company on May 22, 2007.[1]
The company induced the young people to participate the business, making a representation that was false or misleading in a material particular concerning the profitability. To the participant who could not pay the initial money, the company suggested to be loaned from consumer finance company.
The number of consultations in nationwide consumer centers is continuing in certain amount level nearly 20,000. In 2005, it was counted 21,544.[2]
It is almost impossible for many participants who have not stable income to continue their monthly repayment, eventually they usually fall in the situation to loan from multiple consumer finance companies. Some of them fall in insolvency, and are compelled to file a bankruptcy claim.
It is easy to blame these youngsters. And it is apparent that the rogue multi-level marketing company. But the consumer finance company can not run away from their responsibility. They have to respect the suitability rule; therefore they must take account to the borrower’s affordability of repayment. They have a duty of equitable query to the borrower; occupation, income, property and so on.
Several cases have been reported that the consumer finance companies gave their concession such as cutting capital of loan almost one half in settlement agreement, as a result of negotiation through consumer lawyers group. But it is not in usual. Above mentioned, almost participants must take legal insolvency procedure to get resolution.
Categories: multi-level marketing
