NCAC NEWS
From
National Consumer Affairs Center of Japan
Vol.22 No.5
*
January 2011
For further details regarding each topic introduced below, refer to the following URL which contains the actual text of the reports released (PDF files)
(Japanese only):http://www.kokusen.go.jp/news/news.html
－Inside of this issue－
Consumer Affairs Climate
2p
Five-year trend in “consultations regarding personal information” and overview of reports received in fiscal
2009: The number of reports is decreasing but there is still a need to promote accurate understanding of
the Private Information Protection Law.
3p
Results of the special consumer consultations concerning consumer damages suffered by the elderly
(emergency call number ‘110’ for the elderly)”
4p
Status of ADR implementation at NCAC and the summary of outcomes (Third round for Fiscal 2010)
4p
Overview of consumer inquiries and complaints regarding the Consumer Contract Act and major lawsuit
examples
5p
Fiscal 2009 overview of consumer center reports in relation to product related accidents: Including recent
lawsuits
Activities of the National Consumer Affairs Center of Japan (hereinafter ‘NCAC’)
(1) Surveys
6p
7p
8p
9p
10p
11p
Recurring trouble in connection to door-to-door sales for home renovation: Prevent further expansion by
watching over the elderly with dementia
Beware of trouble regarding handover of “karaoke copyright!”
Status of consumer issues regarding corporate bonds for World Resource Communication
Increased trouble in marriage matchmaking services: Expensive cancellation fees and trouble rooted from
lack of explanation even after regulatory enforcement
Increasingly malignant condominium solicitations: Increasing “assertive/threatening”, “prolonged”,
“nighttime” solicitation
Trouble arising from theatrical type solicitation going beyond financial products and onto secondary
damage through resort memberships: Those who have been involved in trouble with prelisted shares in
the past must beware!
(2) Product testing
12p
14p
Products that claim to sterilize through chlorine dioxide: Stationary models used in rooms
Be aware of poor durability of folding bicycles with small-diameter tires
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* Major abbreviated names: NCAC: National Consumer Affairs Center of Japan
PIO-NET: Practical Living Information Online Network System
ADR：Alternative Dispute Resolution
* Explanation for terms used:
E-mail for Consumer Problems: The internet-based system designed for NCAC which receives emails from consumers reporting information
about issues they have experienced.
Injury Information System: It was established by NCAC aiming to collect safety hazard information (information detailing cases where
consumers suffered life-threatening or physical hazards from faulty products or services) and risk information
(information detailing accident cases where consumers were potentially subject to physical hazards from faulty
products or services) from nationwide consumer centers and cooperating hospitals collecting safety hazard related
information through the internet and then to analyze in order to prevent the occurrence of similar problems and to
hold back the expansion of the existing problems.
Consumer Affairs Climate
Five-year trend in “consultations regarding personal information” and overview of reports received in
fiscal 2009: The number of reports is decreasing but there is still a need to promote accurate understanding
of the Private Information Protection Law.
The Private Information Protection law was announced on May 30, 2003 and enforced fully on Aril 1, 2005. 2010
marked its fifth full year in enforcement. In these 5 years, there have been 2 major activities regarding the Private
Information Protection Law.
The first is the revision of the “Order for Enforcement of the Private Information Protection Law” and “Basic Policy
on the Protection of Personal Information” and the review of its guidelines.
The second activity was the launch of the Consumer Affairs Agency and the Consumer Commission on
September 1, 2009 whereby control of the Private Information Protection Law was transferred from the Cabinet
Office to the Consumer Affairs Agency and investigations and discussions as well as administrative duties related to
its basic policy succeeded from the Quality-of-Life Policy Council by the Consumer Commission.
Provided the above in addition to the 5 full years that have passed since the complete enforcement of the Private
Information Protection Law, reports regarding personal information that have been reported to NCAC and personal
information consultation services such as nationwide consumer centers have been summarized in a 5-year trend
along with a brief overview of consultations received in fiscal 2009.
Overview of Consultations
・Total number of consultations
The number of consultations related to personal information received at NCAC and local consumer centers
in these 5 years totaled 56,416 cases. The 5-year trend in consultation regarding personal information shows
that the number of cases reported to NCAC remains unchanged at approximately 1200-1400 reports.
However, the number of consultations at local consumer centers have been decreasing since fiscal 2006 and
the 6,954 reports received in fiscal 2009 amount to approximately 60% of what it was in fiscal 2005 (11,938
reports.)
・Consumer attribute
Gender: The 5-year trend in personal information consultation shows that the proportion of men and
women are almost equal.
Age group: The 5-year trend in personal information consultation shows that the volume of consultation
among those in their 30’s and 40’s is on a particularly increasing trend. On the contrary, reports
made by those above 50 are on a decreasing trend for both men and women.
Occupation: The 5-year trend in personal information consultations based on the consumer’s occupation
reveals that more than half of the consumers are salaried employees and is continuing on its
increasing trend. Additionally, consultations by students are increasing, although slight.
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Meanwhile, consultations by home makers, the unemployed, and self-employed are on a
decreasing trend.
・Number of consultations by business field
When looking at the number of consultations by business field, the 5-year trend in personal information
consultations show that volume in the “information communication field” increased in fiscal 2007 but have
been on a decreasing trend since fiscal 2008. Consultation related to “medical/welfare” and “financial/credit”
both remain unchanged.
・Number of consultations by content
The top 4 topic of complaint in the 5-year trend in personal information consultations reveal that there are
many reports in relation to “improper acquisition” and “leakage/loss.” The 5-year total also shows that
“improper acquisition” accounts for 48.0% whereas “leakage/loss” account for 21.5%, both of which are large
in proportion. The percentage of consultation regarding “offering personal information without agreement” has
been on a slightly increasing trend since fiscal 2008. This is followed by “usage for purposes other than initial
intent”, whose percentage continued on an increasing trend up to fiscal 2007 but has continued to decrease
somewhat since fiscal 2008.
Results of the special consumer consultations concerning consumer damages suffered by the elderly
(emergency call number ‘110’ for the elderly)”
From September 16 to 17, a “special consumer consultation concerning damages suffered by the elderly
(emergency call number ‘110’ for the elderly)” was held in cooperation with 9 prefectures and 3 organizations in order
to prevent the occurrence of similar problems and to hold back the expansion of existing problems related to
consumer issues among the elderly. NCAC received 89 reports. The following are the results of the cases handled
within this period.
Characteristics identified based on the inquiries and complaints
・As with fiscal 2009, there were many inquiries and complaints related to corporate bonds, prelisted shares, and
fund-type investments. However, the payment had already been made in the majority of cases and the
companies unavailable. The contract amount was also extremely expensive with the highest amount reaching
50.5M yen.
・The methods of selling prelisted shares and corporate bonds is characterized by a “theatrical style” in which a
different company fuels the consumer to sign contracts by calling and saying, “If you purchase XX’s corporate
bonds (prelisted shares), we will purchase them for a price that is several folds more than what you pay.” This
call is received before or after the solicitation from the Company XX who is selling the bonds. Another pattern
is in which the company contacts consumers that have suffered from prelisted shares in the past saying, “We
will purchase your past prelisted shares but you will have to buy corporate bonds (prelisted shares) from a
different company instead” and forcing the consumer to sign contracts and falling into secondary consumer
damage. Similar cases have been detected in recent trouble related to prelisted shares and corporate bonds.
・Inquiries and complaints related to those other than financial products included information services for horse
racing, persistent telemarketing calls, buying and selling of land, and hypnotism sales of exercise machines.
・There were also many reports and complaints such as those regarding family issues which could not be
regarded as consumer trouble.
Advice to consumers (especially the elderly)
・In many cases, the elderly have already made the payment to the company. Once paid, it is difficult to recover
the paid money and in worst cases, the company will be completely out of contact. In addition, there is also
the risk of secondary consumer damage in which consumers are forced to buy corporate bonds and prelisted
shares from different companies.
・Prelisted share and corporate bonds is an area of trouble that occurs particularly frequently among the elderly.
Reports regarding financial products such as fund-type investment reveal that consumers are advised to
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purchase products through smooth sales talk such as, “You can expect return on your investment since there
will be a high dividend in the future” or that “You will only be borrowing money from us and you will not lose
any money. We promise to return the money in the future.”In many cases, consumers are lured into signing
contracts through these “theatrical” methods. Buyers will not appear at the “perfect” timing and that companies
will not pass on lucrative information to consumers that they do not know. With this in mind, try to flatly reject
any unnecessary solicitation.
・Do not pay money and sign contracts immediately after hearing the salesman’s explanation. Think again,
consider, and consult family and friends before signing the actual contract.
・It is important that friends, acquaintances, and those close to the consumer watch out for the consumer in order
to prevent trouble related to contracts signed by the elderly. Try to contact the elderly as much as possible and
family members and other close ones who feel the slightest bit of doubt are advised to contact their nearest
consumer center.
Status of ADR implementation at NCAC and the summary of outcomes (Third round for Fiscal 2010)
NCAC disclosed a summary of implementation status by the NCAC Conflict Resolution Committee and its
procedure results.
Implementation status (April 2009 to October 31, 2010)
Total number of application: 106 (sum total of those lodged in Fiscal 2009)
Number of those that saw the completion of procedures: 57 (Number of those that reached
settlement: 26, number of those that failed to reach settlement: 20, number of those that were
withdrawn: 11)
Number of those that saw the completion of procedures: 54 (Number of those that reached
settlement: 30, number of those that failed to reach settlement: 18, number of those that were
withdrawn: 6)
Summary of the outcomes
The following summary of outcomes was released with consideration to the deliberations made at the 7th meeting
of the Conflict Resolution Committee held on October 18, 2010.
1. Cancellation of overseas internship
2. Quality of exterior walls of custom-built homes
3. Cancellation of online shopping
4. Cancellation of leases for telephones (1)
5. Cancellation of leases for telephones (2)
6. Cancellation of leases for telephones (3)
7. Return of damages for investment trusts
8. Cancellation of weddings and wedding receptions (1)
9. Cancellation of weddings and wedding receptions
10. Contracts in which users are forced to purchase products as a substitute for paying money to be served as
membership cancellation charges
11. Warranty services for mobile phones
12. Explanation on repair history of second hand cars
Overview of consumer inquiries and complaints regarding the Consumer Contract Act and major lawsuit
examples
Consumer centers nationwide have received many reports regarding product and service contracts concluded
between the consumer and a company. The men and women on site who receive such reports are working daily to
provide relief measures based on existing laws and regulations. In particular, the Consumer Contract Act is being
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used as an effective method for resolving trouble involving consumer contracts.
NCAC organizes consumer center reports related to the Consumer Contract Act and prepares a summary of
representative examples and trends of unjust solicitations by businesses and unfair contractual provisions. In
addition, NCAC has gathered major examples of lawsuits held in relation to the Consumer Contract Act following its
enforcement and is offering information on the said matter.
The following is a list of cases that have been identified since last October’s announcement.
Summary of consumer center reports in relation to the Consumer Contract Act.
Representative examples and the number of cases reported in the past 5 years regarding “unjust solicitation (4
related provisions)” and “unfair contractual provisions (8-10 related provisions)” have been summarized as
consumer center reports related to the Consumer Contract Act.
・Of the reports regarding “sales method” (343,643 cases) under “unjust solicitation (4 related provisions)”,
representative sales methods included “fictitious explanations” and “lack of explanation.”
・Of the reports regarding “contract/cancellation”(705,000 cases) under “unfair contractual provisions (8-10
related provisions)”, inquiries and complaints were in regards to unfair provisions under sections such as
“cancellation fees” and “delay fees.”
Transition in the number of reports connected to major lawsuit examples related to the Consumer Contract Act
Now in the 10th year since enforcement of the Consumer Contract Act, NCAC has gathered examples of court
proceedings in relation to the said law. A transition on the number of reports made to consumer centers in
regards to major examples has been summarized based on this information.
Transition of the number of inquiries and complaints related to major lawsuit examples out of those cases handled
by qualified consumer organizations.
Based on Article 40, Section 1 of the Consumer Contract Law, NCAC offers information in response to requests
made by qualified consumer organizations. The following is a summary on the transition of the number of reports
made to consumer centers in relation to major lawsuit examples.
Major lawsuit examples related to the Consumer Contract Act
Of the Consumer Contract Act related lawsuits, the number of judicial decisions known to NCAC is 190 cases
(from July 1, 2001 to August-end 2010 present.)
Looking at the 32 cases that have been identified since disclosure of the “Overview of Consumer Center Reports
in Relation to the Consumer Contract Act and Major Lawsuit Examples” on October 21, 2009, 5 judicial decisions
were in relation to “unjust solicitation (4 related provisions)”, 24 judicial decisions were in relation to “unfair
contractual provisions (8-10 related provisions)”, and 3 judicial decisions were in relation to “lawsuits by consumer
organizations” in which qualified consumer organizations placed a demand for injunction based on the Consumer
Contract Act.
Fiscal 2009 overview of consumer center reports in relation to product related accidents: Including recent
lawsuits
In an effort to better understand the status of the Product Liability Law (PL Law) enforced in July 1995, NCAC has
researched the status of fiscal 2009 consumer center reports received in relation to product related accidents
gathered through PIO-NET and summarized its results. The report also includes information on lawsuits based on
the Product Liability Law.
Trend in consumer center reports involving product related accidents
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Fiscal 2009, the number of reports involving product related accidents reached 11,622 cases, of which 6,619
reports were regarding expanding damage. When broken down, expanding damage consisted of 5,396 reports
regarding harm to life or body, 1,433 reports regarding harm to property (e.g. products and facilities), and 211
reports regarding harm to both life and/or body and property. Looking at the number of product-specific reports
regarding harm to life or body, “cosmetics” ranked as the top product. When classified by the detail of the harm
done, the most frequently reported matter consisted of those “causing other injuries, diseases, and other
symptoms” (such as “feeling unwell” “feeling poorly”, which applies neither to “skin hazard” nor “digestive
hazards.”) The top product in product-specific reports regarding harm to property was, “cooling and heating
systems”, with “ignition/catching fire” as the most frequently reported harm done. The top product in
product-specific reports regarding both harm on life/body and property was “cooling and heating systems” with
“burn injury” as the most frequent harm suffered and “disrepair/breakage” as the most frequent hazard reported.
Lawsuits regarding the Private Liability Law (PL Law)
The number of lawsuits raised based on the PL Law and that NCAC has gathered through the cooperation of
the Consumer Agency totaled 130 cases (collected up to September-end 2010.) Of this number, 4 cases were
brought before the court after fiscal 2009.
Activities of NCAC
(1) Surveys
Recurring trouble in connection to door-to-door sales for home renovation: Prevent further expansion by
watching over the elderly with dementia
NCAC offered information to consumers in fiscal 2002 on issues related to door-to-door sales for home renovation
and warned consumers again in fiscal 2005 when the number of reports received at consumer centers nationwide
reached its peak.
Since then, the number of such reports and complaints had been on a decreasing trend nationwide but the
number started to increase once again in fiscal 2009. In that situation, the increasing trend, particularly in the
number of reports related to contracts signed by consumers who lack the capability to make proper judgment (e.g.
elderly with dementia) has resulted in NCAC offering information once again in order to call out for people to watch
more than ever before over elderly people with dementia.
Number of Inquiries and Complaints
Looking at the overall number of inquiries and complaints related to door-to-door sales for home renovation,
fiscal 2009 received 5,766 reports and the number of reports received this fiscal year as of September-end present
is 2,400 (2,144 cases received in the same term of last year.) Of this number, 276 of the cases in fiscal 2009 and
113 of the cases received this fiscal year (99 cases received in the same term of last year) is in regards to
contracts signed by consumers who lack the capability to make proper judgment such as elderly with dementia.
Characteristics and issues identified based on the inquiries and complaints
By age group of those who sign the contract, many are in their 70’s to 80’s but when looking by fiscal year; there
were a particularly large proportion of those who were 80 years and older.
In fiscal 2005, approximately 50% made immediate payments (single payment made in cash or via direct
deposit), approximately 40% were through installment payments for general products by third party credit
(personal credit) but in fiscal 2010, approximately 90% made immediate payments and approximately 10% were
through installment payments for general product by third party credit (personal credit), indicating that recent
payment are made mostly through single payments in cash or via direct deposit.
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The inquiries and complaints indicate a decreasing trend in the proportion of inquiries and complaints regarding
“consecutive sales” but this method of sales still accounts for approximately 20-30% of the annual inquiries and
complaints since fiscal 2006.
Advice to consumers
・Families and close ones must watch over their community on a daily basis
・Make use of systems such as the adult guardianship system
・In case of trouble, contact a local consumer center immediately
・In case of suspicious solicitation such as door-to-door sales, do not sign contracts on the spot and instead,
consider the matter carefully.
Beware of trouble regarding handover of “karaoke copyright!”
Recently, there has been an increase in the number of inquiries and complaints regarding the purchase of and
solicitation for investment in “karaoke copyright” and “copyright belonging to the inventor of karaoke machines.”
Copyright for songs sung in karaoke are representative examples of copyright that generates profit the more the
song is sung in karaoke. Alternatively, karaoke machines and the karaoke business model are not defined as
copyrighted work under the Copyright Law and there is no copyright for these items.
In case of solicitation for “karaoke copyright” and “copyright belonging to the inventor of karaoke machines”, this
could be copyright for “documents that explain the business mechanism and history of karaoke (such as books)”
that do not apply to either of the above.
A purchase of such “copyright for documents regarding karaoke” that have been divided into small lots will not
lead to automatic profit generated by songs that are sung at karaoke or by karaoke machines.
The Consumer Agency and NCAC disclosed typical inquiries and complaints related to solicitation for purchase
or investment in “karaoke copyright” as well as “copyright belonging to the inventor of karaoke machines” along
with details regarding takeover of rights and its relationship with profit and offered advice to consumers in order to
promote careful confirmation and decision making.
In addition, local consumer centers were also offered information in order to enable appropriate response to
consumer inquiries and complaints.
Main case examples of inquiries and complaints
The consumer was explained that the world’s karaoke market produces 20 trillion yen in royalty every year and
that purchasing copyrights will lead to distribution of 600,000 yen in royalty every year. However, a closer look at
the documents revealed that the document was a receipt to takeover 1/20,000 of copyright for a book on quotes
made by the inventor of karaoke and that it was in no relation to the karaoke market. The consumer asked to
cancel the contract.
Advice to consumers
・A small purchase of “copyright for documents (e.g. book) that explain the mechanisms and history of
businesses related to karaoke” divide into small lots will not lead to automatic receipt of benefits that have
been generated by songs sung in karaoke or by the karaoke machines that are used. It is important that you
carefully confirm the details of the rights that you are taking over and to confirm how they are related to the
benefits you are told you will receive. The Agency for Cultural Affairs has already raised similar warnings.
・In addition, do not believe every word of the solicitation and in case the copyright is for a particular document,
make sure to confirm the actual copyrighted work (e.g. Book.)
・Reject the offer flatly if you feel the slightest suspicion. In addition, do not sign contracts if you cannot fully
understand the details of the contract.
・In the event you are solicited persistently regardless of rejecting the offer or you sign the contract because you
could not turn down the offer, contact a local consumer center immediately.
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Status of consumer issues regarding corporate bonds for World Resource Communication
On October 29, 2010, the Consumer Agency based on the Consumer Safety Law, offered information and warned
consumers in order to prevent consumer damage and to prevent further expansion of issues related to corporate
bonds sold by World Resource Communication Co., Ltd. (formerly African Trust, African Partner.)
In addition, the Financial Services Agency also on the same day issued a warning to the said company based on the
“Guideline on Disclosure of Information on Business Activities” in relation to the Financial Instruments and Exchange
Act.
NCAC also called out to warn consumers on March 17, 2010 regarding this company with the company name
indicated explicitly in the given warning.
However, complaints and inquiries regarding this company still remain with a total of 1,022 complaints an inquiries
accumulated in PIO-NET as of October 28, 2010 present and the total amount of identified payments standing at
over 3.9 billion yen. Given this situation, NCAC gave notification on the status of issues related to corporate bonds by
the said company following the March announcement.
Company Information (October 28, 2010)
Company name: World Resource Communication Co., Ltd.
Address: Onari-mon Odakyu Bldg. 9F
3-23-11 Nishi-Shinbashi, Minato-ku Tokyo
Representative: Masaru Toyoshima
Date of establishment: June 17, 2008
Capital: 408 million yen
Amount of damage
Of the 1,022 inquiries and complaints registered to PIO-NET regarding this company, including those reports
received before the company changed to its current name, the purchase amount of corporate bonds was identified
for 737 cases. The breakdown of purchase amount reveals that corporate bonds “less than 1 million yen” account
for the largest group with 265 cases (approximately 36 %.) Following this is 259 cases of bonds “above 1 million
yen and less than 5 million yen” (approximately 35%) followed by 100 cases of those who have paid amounts
“over 10 million yen” (approximately 14 %.) The amount of these paid amounts total over 3.9 billion yen.
Main case examples of inquiries and complaints
・Additional purchase of corporate bonds made in order to become a major shareholder
The consumer had purchased the company’s corporate bonds in the past but made additional purchases
after being solicited recently saying “Would you like to purchase more corporate bonds and become a major
shareholder? You will receive high dividends if you do.” Later, the consumer was insisted into purchasing
additional bonds based on the grounds that “they cannot be a major shareholder with the amount they had
paid” and signed an agreement totaling 20 million yen when including previous contracts. The consumer was
told that they would receive 35 million yen in dividend every year for the rest of their life if they became a major
shareholder but cancelled the agreement due to its suspicious nature. (Received in July 2010)
・Contracts signed after being solicited that corporate bonds will be an alternative to pensions
A consumer was recommended to purchase corporate bonds in a telemarketing call saying that “good
dividends will be an alternative to pensions” and closed their bank account to sign a contract totaling 25 million
yen. The consumer had been receiving their dividend until now and trusted the company but became
unsettled after seeing a TV news report on the company. The consumer is seeking a refund. (Received in
August 2010)
・Deposit of monthly interest payment of corporate bonds is discontinued
July 2009, a consumer received a pamphlet of the company introducing their activities in overseas support.
Later, the consumer received a phone call asking them to purchase their lucrative corporate bonds. The
consumer was told that the company stock would go IPO in May 2010, which would raise its value, and
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purchased corporate bonds totaling 20 million yen. However, the company stock did not go public and
interest payments stopped recently. (Received in October 2010)
Increased trouble in marriage matchmaking services: Expensive cancellation fees and trouble rooted from
lack of explanation even after regulatory enforcement
Inquiries and complaints regarding marriage matchmaking services have totaled 16,663 cases in the 5 years from
fiscal 2005 and though the number decreased in 2006, it has been increasing every year again since fiscal 2007.
Many of the inquiries and complaints included those related to cancellation such as, “I was told I cannot cancel upon
seeking cancellation”, “expensive cancellation fee”, “amount of return is small” and those related to the service such
as, “the actual service is different from what I was told”, “I am not introduced to people who meet my conditions”, and
“even if introduced, there is no response from the person and there is no progress.”
Although the 2004 revision of the Specified Commercial Transaction Law regulates marriage matchmaking services,
the ever increasing number of complaints and inquiries has led NCAC to summarize the issues once again and offer
information to consumers.
Number of inquiries and complaints received
The number of inquiries and complaints has been increasing yearly since fiscal 2007 and 1,269 cases were
received in fiscal 2010 (same period of the previous year: 1,069 cases.) Men slightly outnumber women in the
contracts signed and the largest age group is those in their 30’s.
Case examples of inquiries and complaints
・Invoiced with a “renewal fee” that is not specified in writing.
・Requested for cancellation in mid-term due to uncertainty but was told “it is not possible.”
・The cancellation fee is expensive and unjust.
・The services introduced in the pamphlet were unavailable and the invoiced cancellation fee was different than
explained.
・The consumer was told, “you will be able to get married no matter what” but there are many things that are
otherwise to what was explained.
・The consumer signed the contract after communicating the conditions they seek in their partner but he/she is
not introduced to such people.
・The consumer was asked to pay a marriage fee to the caretaker regardless of the fact that there is still no
promises of marriage.
・Was pressured into signing a contract based on the grounds that the person must sign up to the service in
order to meet the people they liked at a party.
・A matchmaking party was smaller in scale than thought.
Issues identified through inquiries and complaints
If the duration of service provision of a marriage matchmaking service exceeds 2 months and the amount paid by
the consumer exceeds 50,000 yen, the service falls under Specified Continuous Service Offers of the Specified
Commercial Transaction Law.
・There is no issuance of written documents as specified under the Specified Commercial Transaction Law.
・Cancellation is frustrated through explanations that imply that mid-term cancellation is not possible.
・There are many complaints that the expensive cancellation fee is unjustifiable.
・There is lack of explanation before contract signing.
・Actual service is different than what is explained in advertisements before contract signing.
Advice to consumers
・Do not hold one-sided expectations toward the service and do not trust the service based on images perceived
through advertisements.
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・Confirm whether the company is complying with regulatory items.
(1) Confirm whether the company provides written documents.
(2) Receive explanation on service details and fees from the company before signing contracts and confirm
that they are placed in writing.
(3) Also confirm policies applied at agreement cancellation.
・Consult a local consumer center in case of trouble.
Increasingly
malignant condominium solicitations: Increasing “assertive/threatening”, “prolonged”,
“nighttime” solicitation
The number of inquiries and complaints regarding solicitation for condominiums gathered at nationwide consumer
centers in fiscal 2009 increase considerably by 22% (5,355 cases) in comparison to the previous year. In addition,
the total number of cases registered in the 5 years from fiscal 2005 to October-end 2010 present has reached
22,160 cases.
NCAC has offered information to consumers and requested enforcement of regulations to related authorities and
industry organizations in order to prevent damage caused by malignant solicitation for condominiums.
Overview of inquiries and complaints
Number of inquiries and complaints
The number of inquiries and complaints regarding solicitation for condominiums is on an increasing trend as
follows: 2,837 cases in fiscal 2005, 3,339 cases in fiscal 2006, 3,451 cases in 2007, 4,376 cases in fiscal 2008,
and 5,355 cases in fiscal 2009. For fiscal 2010, there have been 2,802 cases registered as of October-end
present, which exceeds the number registered in the same term of the previous year. Of the inquiries and
complaints received to present, 17,990 cases are related to “assertive/threatening” solicitation and these
numbers are also increasing yearly.
Attribute of those who received solicitation
The largest age group is those in their 40’s with 47.1%, followed by those in their 30’s with 27.8%. The
average age is 43 years old and an overwhelming number of consumers are male, accounting for 85.0%.
By occupation, the group is comprised by salaried employees (87.5%), homemakers (6.4%), and self
employed (2.9%) and approximately 90% are salaried employees.
Contract
3,405 cases signed agreements after being solicited and this makes up for approximately 15.9% of the
overall. A large portion of the contract amount is from 10 million yen to below 20 million yen (19.3%), 20 million
yen to below 30 million yen (52.1%). The average contract amount was approximately 25 million yen.
Of this number, 17,990 cases were in relation to “assertive/threatening” solicitation and this is also increasing
every year. 1,813 cases of the inquiries and complaints related to solicitation for condominiums were
regarding “prolonged solicitation.” The proportion of “prolonged solicitation” among the overall is increasing
yearly along with the number of cases reported.
Main case examples of inquiries and complaints
・Grabbed by the collars and kicked in the legs after turning down the sales person a repeated number of times.
・Was threatened to be “filled with concrete” or “run down and killed by a car” after rejecting the solicitation.
・Was forced into signing a contract after 15 hours of solicitation which started from 10 am.
・Signed a contract after being promised that it will be lucrative but fell into deficit and the property price fell to
70%.
・Traded business cards after being told that he/she was practicing card exchange and started being solicited
over the phone thereafter.
・A plumbing inspection turned out to be solicitation for a condominium for investment purposes.
Issues
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・Consumers are treated violently after turning down the offer a repeated number of times and there is solicitation
that can be considered a crime.
・Consumers are being forced to sign contracts unwillingly after being solicited through seemingly threatening
acts or after being solicited for many hours or during the night.
・There was witness of interference in cooling-off. Intimidation and interference in cooling-off are acts that are
prohibited under the Building Lots and Buildings Transaction Business Act.
・There was explanation that hinted the promise of “income” and “no responsibility of the individual.” In some
cases, consumers were forced into personal bankruptcy.
・Some companies do not clarify the purpose of sales, the company name, or the name of the sales
representative.
・There are questionable solicitations in which salesmen ignore consumer requests to “get out” or those seeking
“to go home.”
・Many of the consumer damages are regarding persistent solicitation regardless of rejection.
Advice to consumers
・Do not meet the sales person no matter what if you have no intention of purchase.
・Even if you are encouraged aggressively by the company over the phone, turn down the offer firmly if you have
no intention of purchase. In some cases, consumers are threatened that they have “made them give many
hours of explanation and thus, obstructed their business” after being solicited persistently regardless of
rejection. In this case, clearly decline by stating that turning down a solicitation is not an obstruction of
business.
・In the event that you are visited at home or you must meet the person, show that you do not wish to sign in
your attitude and ask them to leave the premises or communicate that you will go home.
・If you are forced into signing a contract or you have signed a contract, promptly consult your nearest consumer
center.
・If you feel any fear for your safety, call 110 immediately. If you are afflicted with violence or threats and forced
into signing a contract, promptly submit an offense report to the police.
・If you feel that the nature of the solicitation is extremely malignant, place a report to the responsible division of
the public administration.
Trouble arising from theatrical type solicitation going beyond financial products and onto secondary
damage through resort memberships: Those who have been involved in trouble with prelisted shares in the
past must beware!
Recently, there have been reports to NCAC made by consumers who have been involved in trouble related to
prelisted shares and corporate bonds in the past and are now being faced with further trouble after being forced to
purchase products and rights through theatrical type solicitation for resort membership rights and foreign exchange
margin transaction related software.
The inquiries and complaints state, “I have been in investment trouble in the past. Recently, I received a phone call
at home from Company A asking me to purchase membership rights from Company B because they would buy that
membership right at a better price no matter what. I trusted them and bought the resort membership right from
Company B but I could not get in touch with Company A at all from that point on. Company B claims that they do not
know of Company A and they will not accept my cancellation either.”
Many of the inquiries and complaints gathered at NCAC include cases where the consumer pays more than 1
million yen in contracts for resort memberships and this amount combined with the amount paid in past investment
troubles comes to a considerable amount. In addition, the consumers who sign contracts are in the elder age group
with every case suffered by those 60 years and older, indicating the tendency of trouble occurring among the elderly.
NCAC has decided to offer information promptly in order to prevent the further expansion of this damage caused by
similar methods and can be considered secondary consumer damage caused by investment trouble.
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Issues identified through inquiries and complaints
There is fraudulent sales activity referred to as theatrical solicitation
Theatrical solicitation refers to solicitation in which Company A (the solicitor) persuades the consumer that
they will purchase products, services, or rights sold by Company B (the dealer) for a price that is higher than
the consumer’s purchase amount in order to guide the consumer to sign a contract with Company B.
In theatrical solicitation, Company A, the solicitor, will first explain to the customer that, “we will buy
Company B’s (the dealer’s) products for an expensive price” in order to rush consumers into signing contracts.
In some cases, Company B’s pamphlet and application form is sent to the consumer’s home beforehand.
The identity of the solicitor, their registered information, or their address cannot be confirmed and there has
never been a case in which the actual purchase was made. There is full reason to believe that they are
carrying out fraudulent solicitation by saying, “we will purchase for an expensive price” regardless of the fact
that they have no intention of doing so.
Trouble arising from theatrical type solicitation is difficult to resolve in many cases
It is difficult to prove the relationship between the solicitor and the dealer and it is not possible to seek refund
by pointing out the issues in solicitation method to the dealer.
In the event the company is in fact operating its business based on purchase of secondhand goods such
as foreign exchange margin transaction software, they must have a permit issued by the prefectural public
safety commission as prescribed under the Antique Dealings Act.
Solicitation is carried out with a target on those who have been in investment trouble in the past.
Though consumers have already been called out to beware of methods in secondary consumer damage
regarding prelisted shares, corporate bonds, and the Iraqi dinar, there is risk of secondary damage caused
through theatrical solicitation in which consumers are lured into concluding contracts for new products and
services one after another.
Advice to Consumers
・Never trust sudden solicitation from stranger companies that promise future purchase and instead, consult your
nearest consumer center. Never trust companies that try to keep their company information from you. If you
cannot identify the reality of their business on your own, consult a consumer center immediately upon the
solicitation.
・Those who have ran into investment trouble in the past shall be especially aware. Do not easily trust
companies even if you are told, “You can recover your past loss.”
・Those around the elderly shall also exercise care rather than the elderly acting on their own.
・If you face trouble with theatrical solicitation, do not give up and instead, consult your nearest consumer center.
(2) Product testing
Products that claim to sterilize through chlorine dioxide: Stationary models used in rooms
The outbreak of swine flu opened doors to products that claim to sterilize the air inside rooms and other spaces
through chlorine dioxide by saying, “take measures against pandemic influenza”, “sterilize the air in your room”, or
“simply place in your room to remove viruses, bacteria, and odor!”
From April 2005 to March-end 2010, PIO-NET received 20 inquiries and complaints regarding products that claim
to sterilize rooms through chlorine dioxide with a particularly large increase in the number of cases reported in
fiscal 2009.
Due to this situation, NCAC has researched and offered information to consumers regarding products that claim
to sterilize rooms and other spaces through chlorine dioxide and how much chlorine dioxide is released into the air
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while these products are in use.
The brands subject to testing were 9 brands, all of which are used by setting up inside rooms and other spaces,
with 5 brands that are sold in gel-form at purchase (gel type), 3 brands where gel is produced by pouring a powder
ingredient inside liquid when commencing use (gel production type), and 1 brand in which tap water is poured in
together with a tablet inside a container when commencing use (tablet type.)
Main test results
Temporal change in diffusion speed of chlorinated gasses
The diffusion speed of chlorinated gasses were at maximum speed until 1 day after commencing use but
diffusion speed of gel type products was slow and remained unchanged thereafter.
Diffusion speed of chlorine dioxide and chlorine
Diffusion of chlorine dioxide was found only slightly in 6 out of the 9 brands. Meanwhile, some brands had
increased diffusion speed in the initial stage of use and the there was great variance between brands.
Strength of odor and acceptability
Brands that exhibited fast diffusion speed of chlorinated gasses had greater odor intensity and thus, more
people responding that they did not want to stay in the same room for long spans.
Labeling
・Display regarding odor
Brands with strong odor intensity needed to warn users to ventilate the room.
・Labeling and/or advertisement regarding safety
A product stated that chlorine dioxide is accepted as a food additive and thus safe, which could be
misleading to consumers.
・Labeling and/or advertising regarding effectiveness
There was an advertisement that claimed to have preventative benefits against influenza, which could be a
violation of the Pharmaceutical Affairs Act.
Survey to vendors
・Product design and effective ingredients
There were not many vendors who had confirmed the level of product effectiveness in residential spaces. In
addition, some brands named ingredients other than chlorine dioxide as its effective ingredient.
・Place of use
All of the 7 brands who responded claimed that the products can be used almost anywhere inside homes
such as living rooms, kitchens, and bathrooms but some responded that the product should be kept away
from small children, metallic products, and electronics.
・Data regarding physical impact through inhalation and health damage
Most of the vendors had not confirmed safety after actual use. In addition, brands with relatively large
diffusion of chlorinated gases had received reports of health damage from users.
Advice to consumers
・Products that claim to sterilize rooms through chlorine dioxide can be used in life spaces under various
conditions and the level of its sterilization effects are not understood at present.
・While diffusion of chlorine dioxide could hardly be confirmed in some products that claim to sterilize rooms
through chlorine dioxide, some had large amounts of diffusion in the initial stages of use, thus requiring
caution when using.
・Some brands claim that chlorine dioxide is safe based on the grounds that it is a food additive but this does not
necessarily ensure the safety of the product itself.
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Request to vendors
・Some brands exhibited hardly any diffusion of chlorine dioxide whereas some had large amounts of diffusion in
the initial phases of use. Please carry out thorough verification on the safety and effectiveness of the product
so as to allow consumers to use them appropriately in their everyday life.
・There was uncertainty among safety labeling and/or advertisement among some brands and whether the said
safety applied to a part of the ingredients or to the product themselves. Please ensure that safety is labeled for
the products themselves.
・There was some expression in product labeling and advertisements that implied preventative effects against
specific infectious diseases, which could be a violation of the Pharmaceutical Affairs Act. Please revise such
expressions.
Request to the government
・Please provide guidance to vendors so that they will thoroughly investigate product safety and effectiveness in
order to ensure proper use of products that claim to sterilize rooms through chlorine dioxide among users in
their daily lives.
・There was uncertainty among safety labeling and/or advertisement among some brands and whether the said
safety applied to a part of the ingredients or to the product themselves. Please provide guidance to vendors so
that they will design safety labeling and/or advertisements for the products themselves.
・There was some expression in product labeling and advertisements that implied preventative effects against
specific infectious diseases, which could be a violation against the Pharmaceutical Affairs Act. Please ensure
strict monitoring and/or guidance.
Be aware of poor durability of folding bicycles with small-diameter tires
A rider fell after riding over an approximately 4cm bump from the sidewalk to the street while riding a folding bicycle
with small-diameter tires. The rider suffered fractured and lacerated injuries on his face and broke 6 teeth (May
2010.) After receiving report of this serious accident and researching the same model as the accident bicycle, tests
using a dummy doll riding up a 4 centimeter bump at 15km/h resulted in damage of the resin-made front fork. As
such, the durability of this bicycle frame was raised as an issue and information was offered on September 22, 2010
to abstain use of this bicycle on roads with level differences.
However, there have been occasional sightings of other products in the market with structures similar to the
accidental product and NCAC carried out another round of testing on 5 brands made by 3 companies and offered
information to consumers out of concern that these frames could also prove problematic in terms of frame durability.
In addition, folding bicycle with small-diameter tires refers to those with similar structure and the same tire diameters
(6-8 inches) as the accident product.
Main test results
Labeling regarding riding speed and riding over level differences
All of the brands presented a warning regarding riding speed and riding over level differences but only 1
brand mentioned the risk of damage in the event of riding the product at a specific speed or over a level
difference. However, none of the brands provided an idea on the approximate size of the level difference.
Measurement of riding speed
All of the brands could be ridden at more than 18km/h and accelerated to more than 10km/h even when
pedaled at a normal speed. In addition, they could not be controlled steadily at walking speed.
Experiment riding up bumps
・Deformation and damage in frames
When attempting to ride over a 4cm bump at 15km/h, only the front tube of 1 brand was deformed but the
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other 4 brands experienced damage in the front tube as well as damage in the front fork.
・Condition of the fall
When attempting to ride over a 4cm bump, all of the brands fell forward violently. In particular, with the brand
whose front tube was the only deformed part; the dummy jumped up together with the bicycle and fell onto
the road head first.
Quality issues
Some came with instruction manuals for a different brand name, some tires became deflated, some chains
were cut while riding, the edge of some brake wires became loose and disabled the brakes, some came with
crooked handles, and some came with reflectors that were attached front to back.
Advice to consumers
・Folding bicycles with small diameter tires (6-8 inches) lack frame durability and riding capability when riding up
level differences and therefore, inappropriate for riding on roads with level differences.
・When you purchase such products, confirm the condition of the product immediately and contact the retailer in
case you discover any issues in quality. Make sure to use the product according to the instruction manual
when riding in places other than roads, try to avoid riding over level differences and bumpy surfaces and
discontinue use immediately in the event you feel any abnormalities.
Request to vendors
・When selling bicycles based on the assumption that they will be fit for riding on roads, please make revisions
such as enlarging the tire diameter since the product should be produced with full possibility of riding over
level differences of certain extents.
・Even if sold as a toy brand, it is preferable that the product is durable enough to prevent deformation/damage
when riding over a certain level difference when considering its characteristics as a product ridden by people,
and we ask that you improve the product so as to ensure riding safety.
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