Public comment
The METI has required the public comment regarding the revision of consumer credit law. The deadline is July 31st, 2007.[1] The element which should be considered is described with to the interim report published on June 26th, 2007.
Background
The report draws the state of injuries in consumer transactions damages financed by consumer credit company. It especially points out the increasing of elderly victims in recent years. Although ratio of the elderly victim over 70 years old in all consultation people to the consumer center was 6% in 1998, the figure was increased 15% in 2005. Principal lenders to multiple-indebtedness people are money lending companies and ratio is 80%. Balance of loan of the peoples from credit company is comparatively small on the face. Whereas such victims are compelled borrowing money for repayment of installment, these traders’ marketing is getting easier by virtue of participating of sector financing to transaction of these victims.
Law reform
It is necessary that credit companies supervise their member shops to prevent finance to fraudulent transactions. However such measures have no effectiveness against bogus traders.The recommendation to introduce the connected lender liability system in consumer credit law reform is correct. The measure is quite effective devices to keep the credit companies away from bogus traders. But, if the responsibility of creditor is basis on negligence, it is obviously wrong.It is considered unfair that the law imposes consumers the burden of proof of negligence of creditor, because credit companies are in easier position than consumers to investigate the business or marketing of member traders. On the other hand, the credit companies get huge profit by financing the traders-consumers. The fact justify that the creditor should bear absolute liability to damages caused by problematic traders.
Comparative law
The system of connected lender liability is said to be introduced in UK, Denmark, Sweden and US, in either statute law or case law. In these countries, there is not reported any inconvenience and disadvantage in consumer credit sectors. On the contrary, the lender liability system, the credibility of the member shop of creditor is getting higher and thus the use of credit by consumer is stimulated and encouraged. The situation is not bad for consumer credit sector.
Period of public comment
Period of public comment is only one months. It might be shorter than other developed countries.
[1] http://search.e-gov.go.jp/servlet/Public?CLASSNAME=Pcm1010&BID=595207028&OBJCD=&GROUP=
