Ten major topics for 2016 related to consumer affairs
Every year, NCAC publishes "ten major topics related to consumer affairs" of the year chosen out of the cases that drew significant public attention and/or resulted in a large number of consumer inquiries. The year of 2016 was marked by an increase in information/communications related inquiries.
Ten major topics for 2016
- Increase in information/communications related inquiries, with change in inquiries from the elderly
- Large natural disasters occurred frequently; water heater's hot water tanks toppled in the earthquake
- Full liberalization of the electricity retail market; inquiries about opportunistic sales schemes were received
- Fraudulent sales schemes via the Internet; no end of suspicious investment plans
- Key laws related to consumer affairs were revised one after another
- Act on Special Measures Concerning Civil Court Proceedings for the Collective Redress for Property Damage Incurred by Consumers came into effect; it is expected to help consumers as a new system to redress property damage
- Hot discussion on the legal age of adulthood to be lowered from 20 to 18; how can consumers aged 18-19 be protected?
- Automakers' falsification of fuel efficiency data and some other problems stirred up a sense of distrust among consumers
- Discussion on food labeling system began
- Never ending child accidents, against which preventive measures are further being taken
Increase in information/communications related inquiries, with change in inquiries from the elderly
- Our society has become more and more information driven. "The 2016 White Paper on Information and Communications" shows that the number of internet users and the penetration rate of the Internet in Japan both increased year by year. In these circumstances, consumer centers and other entities across Japan received numerous inquiries related to internet shopping or information/communications, including those related to wholesale of optical fiber broadband service.
- Inquiries related to internet shopping or information/communications have been received also from the elderly. One of the factors appears to be an increase in the number of persons aged 60 or over who actively purchase goods or services via a communication terminal and the Internet (so called "active seniors").
Large natural disasters occurred frequently; water heater's hot water tanks toppled in the earthquake
- In 2016, major natural disasters such as earthquakes, typhoons and volcanic eruptions caused great damage. Numerous inquiries related to natural disasters were received by consumer centers and other entities across Japan.
- In particular, the 2016 Kumamoto earthquake in April resulted in immense harm. NCAC set up a telephone counseling hot line called "Kumamoto Earthquake Consumer Trouble Dial 110" to support devastated areas and disaster victims and also to assist local consumer centers there.
- Kumamoto earthquake related inquiries included a huge number of housing related inquiries, mainly those related to real estate rental contracts, construction, repair service, and neighboring relationship. Sometime after the earthquake, the inquiries diversified to include other subjects such as fire insurance, earthquake insurance, and administrative services including issuance of disaster certificates.
- Many inquiries related to toppling of water heater's hot water tanks were received after the Kumamoto earthquake. Hot water tanks toppled also in the Great East Japan Earthquake. It appears that the proper installation method without safety problems was yet to be spread and conducted across Japan and that lessons learnt from the Great East Japan Earthquake were scarcely utilized. NCAC issued an alert to consumers and a request to industry associations in October.
Full liberalization of the electricity retail market; inquiries about opportunistic sales schemes were received
- The electricity retail market was fully liberalized in April. New entrants began to provide electricity. In these circumstances, many consumers complained about opportunistic sales schemes (e.g. "A salesperson claiming to be with a subsidiary of a power company induced me to install a solar panel to reduce the electricity charges", "I accidentally disclosed my contract details including the customer number to a power company not under contract").
- Prior to full liberalization of the electricity retail market, NCAC and the Electricity and Gas Market Surveillance Commission concluded the Partnership Agreement for the Strengthening of Measures for Preventing Consumer Troubles Associated with the Full Liberalization of Entry into the Electricity Retail Market, and jointly provided relevant information several times.
Fraudulent sales schemes via the Internet; no end of suspicious investment plans
- Information-driven society generated some change in fraudulent sales schemes. Inquiries about false billing increased again (e.g. "I received a bill via email for using a website, which I didn't remember"). Recently, fraudulent schemes are becoming more and more sophisticated. Some swindlers try to make a person pay charges via a convenience store by use of a reception substitution system. Consumer centers and other entities across Japan received numerous inquiries related to adult websites still in 2016 (e.g. "It was advertised that the adult website was free to access. As soon as I clicked the button, I was automatically registered as a fee-based subscriber and a billing screen was shown").
- Inquiries about suspicious investment plans were received (e.g. "virtual currency" which is electronically exchanged via the Internet, "rental owner contract" through which part of the income is paid to a consumer as a rental charge, etc.).
- Other fraudulent schemes were also reported; some consumers gave personal information or identification data to a business to do a part time job of "consignee substitution" or "package forwarding", but the personal information was used by the fraudulent business to conclude a contract for smart phone or cellular phone service. Consumers in such circumstances could be involved in a crime.
Key laws related to consumer affairs were revised one after another
- Community based inquiries such as those about door-to-door sales and telemarketing sales targeting the elderly were frequently received. Under such circumstances, the revised Consumer Safety Act was enforced in April with the aim of building a local public-private network to prevent troubles among consumers, in particular the elderly. The act provides for establishment of a regional council for ensuring consumer safety, development and securement of "consumer affairs cooperative individuals" and "consumer affairs cooperative bodies" who take cooperative actions in a community.
- The Consumer Commission prepared a report on revision of the Consumer Contract Act and of the Act on Specified Commercial Transactions. These revised acts were enacted in the Diet session and promulgated in June. The former act newly established cosumers' right to rescind a contract for excessive amount of purchase, the extended range of material information related to cancellation due to misrepresentation, an article to invalidate any provisions of a contract that abandon consumers' right to cancel a contract due to default by the business, and so on. The latter act further reinforced the administrative execution power against unscrupulous businesses, revised the system of designated rights, and introduced restrictions on selling excessive amount of goods through telemarketing.
- In addition, the revised Telecommunications Business Act and the revised Insurance Business Act came into effect. The former act introduced a system for canceling a telecom contract at an early stage and business obligation to deliver relevant documents. The latter act established basic rules related to insurance solicitation (e.g. obligation to provide information and to understand consumers' intention when soliciting) and introduced obligation of insurance solicitors (insurance agents) to organize a proper system.
- In order to respond to globalized production and distribution of textile goods, the revised Textile Goods Quality Labeling Regulations under the Household Goods Quality Labeling Act was put into effect in December 2016. This revision changed textile care labeling symbols to align with the relevant JIS (Japanese Industrial Standard), which was revised to harmonize with the relevant international standard established by ISO (International Organization for Standardization).
Act on Special Measures Concerning Civil Court Proceedings for the Collective Redress for Property Damage Incurred by Consumers came into effect; it is expected to help consumers as a new system to redress property damage
- In October, the Act on Special Measures Concerning Civil Court Proceedings for the Collective Redress for Property Damage Incurred by Consumers came into effect. This inaugurated the new court system for the collective redress for consumer damage. It is expected that actions by specially qualified consumer organizations help redress consumer damage which often used to remain unsolved.
Hot discussion on the legal age of adulthood to be lowered from 20 to 18; how can consumers aged 18-19 be protected?
- Hot discussion is going on about lowering the legal age of adulthood from 20 to 18. In September, the Ministry of Justice asked for public comment on how to enforce the younger legal age of adulthood under the Civil Code.
- The Japan Federation of Bar Associations and other entities submitted a public comment stating that further legal measures to protect consumers would be necessary because if the legal age of adulthood is lowered to 18, 18-19 years old consumers lose the minors' right to rescind a contract under the Civil Code, which is a key way to redress consumer damage.
Automakers' falsification of fuel efficiency data and some other problems stirred up a sense of distrust among consumers
- It was disclosed that a few automakers had falsified fuel efficiency data for some cars to overstate actual ones.
- Food related incidents were also disclosed. For example, an industrial waste disposal company illegally resold frozen beef cutlets disposed by a curry restaurant chain to food related retailers as food products. The CEO of the industrial waste disposal company was arrested on a charge of violating the Food Sanitation Act.
- It was found out that six articles of "foods for specified health uses" sold by a health food company had not satisfied legal requirements (e.g. The actual amount of the contributing constituent was less than the amount stated on the document submitted for application. Sometimes the contributing constituent was not contained at all.). The Consumer Affairs Agency revoked the permission for the company to label the articles as foods for specified health uses.
- As a result of these major incidents, corporate compliance was called into question and the companies concerned lost consumer confidence.
Discussion on food labeling system began
- In January, the Consumer Affairs Agency and the Ministry of Agriculture, Forestry and Fisheries jointly established "the conference for reviewing the system for ingredient/origin labeling on processed food products" to discuss the subject among experts. In November, the conference officially announced the interim report. Food labeling standards are planned to be revised.
- In connection with "the system of foods with function claims" which was launched when the Food Labeling Act came into force in April 2015, "Guidelines on Notification of Foods with Function Claims" were revised in March 2016 to implement online notification and to add certain points to be checked as for constituents related to the function claims in order to confirm safety. Moreover, "the conference for considering how to handle constituents related to the function claims under the system of foods with function claims" discussed how to handle if it is unable to clearly identify nutrients and constituents related to the function claims.
Never ending child accidents, against which preventive measures are further being taken
- Children are often involved in accidents, such as choking, drowning, toppling and falling. In April, a girl accidentally fell down from the veranda of a high-rise condominium and died.
- With a view to preventing such child accidents, "the liaison conference among relevant ministries and agencies on prevention of child accidents" was established in June to promote closer cooperation and joint efforts among relevant ministries and agencies. The liaison conference exchanges relevant information and considers effective ways to raise awareness among consumers as well as measures to promote further efforts among parties concerned. In addition, the Consumer Safety Investigation Commission decided to investigate children's airway obstruction incidents caused by a toy.
- In January, NCAC analyzed data of incidents involving 0-2 year old infants and wrote up points of attention for parents and caregivers to prevent child accidents. NCAC issued an alert concerning several incidents involving children: incidents occurred while cleaning the ear (released in February); bicycle spork injuries often experienced by a child when sitting on the bicycle rear with or without a child bike seat and the foot is caught by the rear wheel (released in August); and incidents experienced by a child on a shopping cart in a store (released in December)