Tort liability was affirmed against an operator running scam websites

This case is related to fraudulent scam websites. An operator running fee-based email exchange sites (Y) used decoys to lure a consumer X into a site and made X to transfer a large amount of money to Y's bank account through email exchanges with the decoys, who offered X to give money. X claimed damages for the fraud against Y based on tort liability. The original decision dismissed X's claim on the grounds that the relation between the decoys and Y was not clarified by X's statement. In response, X appealed to a higher court.

The high court acknowledged Y's tort liability and wholly affirmed X's claim for damages, construing that Y used decoys on the sites and made X believe that financial support and exchange of contact details would be realized in order to make X pay a large amount of money as usage fees, which was regarded as a fraud. (Judgment by the Tokyo High Court on June 19, 2013)

• Page 83 of Hanrei Jiho No.2206

Summary of the case

Plaintiff:

X (Consumer)

Defendant:

Y (Operator running fee-based email exchange sites)

Sites run by Y are so called "online dating sites".

In general, a user of an online dating site buy some points at first. If an email is sent to a user, the site operator informs the user of the email subject, screen-name of the sender, and the starting part of the body text. The user accesses an URL attached to the e-mail to read the full text. Then, the user can start email exchange.

On each site run by Y, certain points are deducted per each handling such as an email exchange. It appears that more points were required for attachment of email address or use of the dedicated line than for email exchange.

X often registered to free-to-join prize websites and applied for prizes. X began to receive emails titled "I will give you money". In order to read the full text of these emails, X had to access a link. When X clicked the link, one of fee-based email exchange sites run by Y was shown. Since membership registration was required for email exchange, X signed up for the site in March 2009. After that, from the same month to 2010, a pile of emails were sent to X from more than 10 persons. All of the senders offered to give money of several million yen to tens of million yen for some reasons. Being instructed by the correspondents, X repeatedly used the security-enhanced dedicated line and speed-up service, exchanged email addresses (which required additional points aside from those for usual email exchange) as well as passwords (combination of number, alphabet and so on) many times, and exchanged a pile of emails to decide when and where to meet (the correspondents often changed appointments). As a result, X consumed a huge amount of points and paid charges in several ways (about 20,000,000 yen in total). Neither of money provision nor meeting was realized.

The original decision (Judgment by the Yokohama District Court on June 11, 2012) dismissed X's claim on the grounds that X did not specify the dates/time and content of Y's torts, what X had misbelieved, the timing of transferring money to Y's account and of buying points based on X's misbelief and the amount of money transferred, and that the connection between the decoys and Y was not clarified by X's statement. In response, X appealed to a higher court.

Reasons

In addition to the above correspondents, X exchanged emails with two or three more correspondents whose names were unknown. In the following, all of these correspondents are referred to as "the correspondents". All of the offers from the correspondents were unrealistic and unnatural as X had never met them before (e.g. "If you follow the instruction, I will give you money of several million yen (or tens of million yen)", "If you accept to be interviewed or to be a test subject, I will give you a substantial reward", etc.). None of the offers was realized. It is obvious that the correspondents did not have will or capacity to realize these offers.

The correspondents instructed X to take the following actions: (1) to use the dedicated line for email exchange as well as to attach X's email address, telephone number and personal name, which consumed a huge amount of points; (2) to enter a password, bank account number, etc., repeatedly, as a result of which X consumed a huge amount of points for exchanging emails; (3) the correspondents repeatedly promised and cancelled to meet or give money, as a result of which a huge amount of emails had to be exchanged. It is hard to find reasonableness in these instructions. It is clear that the correspondents intended to make X consume points as much as possible and to let X pay a huge amount of money as usage fees.

Nobody but Y profits by making X pay expensive usage fees. Although the correspondents should have been also charged for expensive usage fees, they frequently sent emails to X to make X pay the expensive usage fees. Based on this fact, it is inferable that the correspondents were not charged for the fees and that the correspondents acted to generate profits for Y.

Therefore, it is undeniable that the correspondents who exchanged emails with X were not general members but decoys who were systematically used by Y.

In light of the above, Y's action should be categorized into fraud because (1) Y used decoys secretly and made X believe that financial support, exchange of contact details and meeting with the correspondents would be realized to a certain extent although Y did not intend to provide X with such services or benefits, and (2) Y made X exchange emails a huge amount of times and made X believe that sending a password and the like were necessary to get financial support and other benefits only to make X pay a huge amount of money as usage fees. Y cannot be exempt from tort liability for X's damages under Article 709 of the Civil Act.

Explanation

Damages caused by scam websites have been reported by mass media and widely known. Redress of damages through litigation requires proving a connection between the website operator and the correspondents who appears to be decoys, which is difficult. In addition, the court of the original instance asked X to specify what X had misbelieved as well as the timing when X bought points and transferred money to Y's account based on X's misbelief in addition to the value of the points and the amount of payment, including the dates/time and content of Y's torts. Consequently, the court dismissed X's claim.

The court of the second instance acknowledged the outline of the case including the timing and content of solicitation by the individual correspondents as well as the identified amount of emails from the individual correspondents (some exceeds hundreds or one thousand). The court further acknowledged that (1) the correspondents who had never met X had offered X to give a huge amount of money, which was unnatural and was not realized, therefore the correspondents did not have will or capacity to realize these offers; and that (2) the correspondents acted to make X consume points as much as possible and to make X pay expensive usage fees. Based on the fact that the correspondents intended to make X pay the usage fees although nobody but Y profits by making X pay the expensive usage fees (if the correspondents were general members, they should have been charged for expensive usage fees for the huge amount of email exchange, which was not advantageous for them), the court construed that it was inferable that the correspondents had not been charged for the usage fees and that the correspondents had acted to generate profits for Y. Consequently, the court acknowledged that the correspondents were not general members but decoys who were organizationally used by the website operator Y.

Probably there will be more cases of redress if the connection between a website operator and decoys can be proved like this way.

Another characteristic in this case is that the whole amount of usage fees charged by Y was regarded as damages. If one or more general members were included in the correspondents who exchanged emails with X, the usage fees for exchanging emails with the general member(s) should not be regarded as damages. While there were two or more correspondents who exchanged emails with X in addition to the identified correspondents, the court of the second instance regarded the whole amount of usage fees as damages on the grounds that the content of all the emails from the correspondents were suspicious (e.g. "if you use a password, I will give you money") and all the correspondents who exchanged emails with X were regarded as decoys.

Incidentally, X's attorney registered to three email exchange sites run by Y using different areas and different screen names (female names) during the suit. A few minutes later, the attorney received a huge amount of emails. All the emails received through the three websites were exactly the same from the same correspondent, which indicated to transfer an estate. After the attorney replied, the correspondent repeatedly urged the attorney to transfer money to Y's account. All the emails were from the same sender and had the same body text except for the area, place to meet, hometown and the like. The court inferred that dedicated senders systematically sent emails to numerous members.