Intended to sell disused articles, but happened to sell precious metals! Many old people got in trouble with door-to-door buyers, especially when sorting out belongings.
Numerous problems regarding door-to-door purchase have been reported to local consumer centers and other similar entities across Japan (e.g. "A business operator told they would buy disused articles so I called a buyer to my house, but he forcefully bought my precious metals"). Data analysis of the inquiries and complaints revealed that persons in their 60 or older accounted for about 70% of all the persons involved in these troubles. Some of the elderly persons intended to dispose of a substantial amount of disused articles while they were making preparations for their death.
In order to prevent the spread of these kinds of troubles, the Japanese government revised the Act on Specified Commercial Transactions in February 2013. The revised Act sets forth a system for protecting consumers as well as rules to be kept by business operators engaged in door-to-door purchase.1 According to the inquiries received recently, however, there were quite a few cases where consumers got in trouble because they didn't understand the system and rules.
Therefore, the National Consumer Affairs Center of Japan (hereinafter called "NCAC") decided to provide warning information regarding door-to-door purchase transactions in order to prevent the occurrence and spread of similar problems. On this article, NCAC describes what kinds of problems occurred when clothes, precious metals, etc. were bought by door-to-door buyers and issues an alert to consumers so that they can correctly understand the legal system and rules concerned. NCAC also requests the government to keep consumers and businesses informed of the relevant legal system.
- 1 Regulations on "door-to-door purchase" are specified under the Act on Specified Commercial Transactions (enforced on February 21, 2013). In order to protect consumers, the Act provides for the cooling-off system (Article 58-14) and eligibility to refuse to hand over articles (Article 58-15). The Act also stipulates rules to be observed by business operators, for example, prohibition of unrequested solicitation (Article 58-6, paragraph 1), obligation of clear indication of the name of the business operator (Article 58-5), prohibition of unjust solicitation (Article 58-10), obligation of delivery of documents (Article 58-7 & 58-8) and so forth.
Diagram 1: Number of inquiries about door-to-door purchase *1 vs. number of contract signatories *2 aged 60 or older
The number of inquiries about door-to-door purchase was 7,162 in FY2013, 7,820 in FY2014, 8,602 in FY2015, 8,648 in FY2016, and 2,939 in FY2017. Among them, cases where contract signatories were in their 60 or older amounted to 4,589 in FY2013, 5,166 in FY2014, 5,797 in FY2015, 5,800 in FY2016, and 1,961 in FY2017. The graph shows data registered through August 31, 2017.
Diagram 2: Gender of contract signatories
Cases where contract signatories were male amounted to 7,113 (20.8%), while cases where contract signatories were female amounted to 27,081 (79.2%). The graph shows data registered through August 31, 2017.
- *1 Cases of door-to-door purchase on the above graphs include those not covered by the Act on Specified Commercial Transactions.
- *2 The contract signatories on the above graphs include those who did not enter into a contract.
Example cases of inquiries (nature of contract signatories shown in parentheses)
(1) Case where a consumer was not explained about the cooling-off system and the contract was poorly written.
- [Case 1] I entered into a contract without receiving an explanation on the cooling-off system. The written contract was sloppy.
- A buyer visited my home bringing an empty jewel box and said, "We bought this at 800 yen in your neighborhood. If you have any disused article, we will buy it". I showed a silver cup. The buyer said, "Do you have any other precious metals?", so I also showed my rings and necklaces. About one hour later, the buyer left my home and came back with an authenticator. After all, I happened to sell 95 items including precious metals and coats, which were priced 223,000 yen in total. The buyer handed me a written contract and told me to tick a checkbox titled "I received an explanation on the cooling-off system". I ticked it, but I didn't receive such an explanation. Although I asked the buyer to write down items one by one, just a rough breakdown was written (e.g. 21 rings). I wanted to ask the buyer to rewrite the document, but the buyer said, "I have to move on to my next call, so I don't have the time". I didn't have courage to say anything further. At a later date, I learned that it was illegal for business operators to suddenly visit someone's house and buy something. I asked the buyer to return the articles, but the buyer didn't accept my request because the cooling-off period was over. Still I want to take back the articles.
- (received in January 2017, woman in her 70s in Saitama, home-maker)
(2) Cases where articles were not returned
- [Case 2] I want to take back my mourning ring, but it was resold.
- A female buyer visited my home and said, "We are running a campaign to purchase disused articles. If you have any disused article, we will buy it". It was so sudden and I told that I could not prepare anything on the spot. Then she said, "I will come again after one hour. Find something to sell". One hour later, a man visited my home. I showed him unnecessary clothes and bags. He said, "Please show me broken jewelries, if any". So I showed him several articles such as necklaces and bracelets. After all, he bought these articles at 25,000 yen. He handed me his name card, but didn't give me a written contract. Later I regretted selling my mourning ring as well. I also thought that the total price 25,000 yen was too low for several expensive accessories. I told the business operator by phone that I wanted to buy back the articles. The business operator said, "We sold them to another business operator". I want them to return all the articles, because I sold precious jewelries as well.
- (received in February 2017, woman in her 60s in Gunma, home-maker)
- [Case 3] I want to take back my diamond ring, but the buyer told that it had been lost.
- I received a phone call asking "Do you have any disused articles like used clothes, jewelries, mobile phones, etc.?" and I gathered unnecessary old clothes and dishes to be sold. Two male buyers visited my home, but did not even look at the articles I showed. They looked at my diamond ring and gold watch I was wearing and said, "It's a good ring. I'd like to take a photo for our reference". I didn't intend to sell it, but I handed the ring to one of the buyers because I thought it was OK for them to take a photo of the ring. They also said, "Do you have any other accessories?", so I told I did not intend to sell and showed the contents of a jewel box. They asked me, "Are there any unnecessary things among them?" so I picked out seven necklaces and two rings, which I happened to sell at 10,000 yen in total. Thirty used clothes were priced at 0 yen as those to be disposed of. After they left, I found out that they bought my diamond ring as well. I immediately phoned the business operator, but they told they had lost the diamond ring. It is very precious to me, so I want them to return the ring.
- (received in May 2017, woman in her 70s in Kagoshima, home-maker)
(3) Cases where a buyer forcefully bought articles from a consumer
- [Case 4] While I was wondering whether to sell, the buyer left 1,000 yen and took away my belongings
- I received a phone call from a business operator saying "We are gathering disused articles" and I asked a buyer to come. At a later date, the buyer visited my home and I showed disused articles. The buyer told me that they would buy ten items of clothes at 190 yen, one bag at 10 yen, and five pairs of shoes at 300 yen. I decided to sell them. The buyer asked me, "Do you have any precious metals such as accessories?", and then I showed a necklace which I had bought at around 200,000 yen, a necklace which I had bought at around 80,000 yen, and a bracelet which I had bought at around 200,000 yen, etc. The buyer said, "We will buy them all at 500 yen". The price was too low and I was wondering whether or not to sell. Suddenly the buyer left me 1,000 yen and took all the articles away. I ran after the buyer, but the buyer drove away so I could not catch up with him. I don't need the clothes and shoes, but I want to take back the accessories. What should I do?
- (received in April 2017, woman in her 80s in Miyazaki, unemployed)
- [Case 5] When I told that I didn't have any precious metal, the buyer yelled at me. I was scared.
- I repeatedly received phone calls from a business operator saying "Do you have anything to dispose of?" and "We will buy anything, clothes, a doll, or whatever", so I allowed a buyer to visit my home. When I showed an old doll to the buyer, the buyer said, "We cannot buy such a thing. Do you have any precious metals?", so I told that I had disposed of precious metals because I didn't need them. The buyer said, "There should be something" and tried to search the room. I asked the buyer to leave. Then the buyer yelled at me, "I came here because you asked me to come to buy something. Why do you say like that?" I was scared, but I didn't have any precious metal and I repeatedly said so. Finally the buyer said in a loud voice, "I will charge you a fee for coming here" and left my home. What should I keep in mind from now on?
- (received in October 2016, woman in her 70s in Kanagawa, home-maker)
(4) Case where a business operator became unreachable
- [Case 6] I want to use the cooling-off period, but I cannot get through to the business operator.
- I received a phone call from a business operator asking "Do you have any disused shoes or clothes?" I had a pair of disused brand shoes, so I called a buyer to my house. The buyer further said, "Do you have any disused precious metals?", so I asked the buyer to price my necklaces made of gold or platinum. I was satisfied with the price, so I sold the unnecessary accessories. When I looked at a detailed statement, the individual prices were lower than I expected. I searched on the Internet and found that the prices were too low. I want to use the cooling-off period, but I cannot get through to the business operator by phone.
- (received in March 2017, woman in her 60s in Mie, unemployed)
Problems identified based on inquiries
(1) Some buyers suddenly visited and solicited consumers, and in some cases did not introduce themselves.
Under the Act on Specified Commercial Transactions, buyers must not suddenly visit and solicit a consumer without prior notice.2 Before solicitation, a business operator is required to clearly indicate the name of the business operator.3 According to the inquiries received, however, some buyers suddenly visited and solicited consumers without prior notice (Case 1 & 2) or solicited without introducing themselves.
- 2 It is stated on the Act on Specified Commercial Transactions "Business operators must not solicit any person who has not requested the solicitation for the conclusion of a sales contract pertaining to door-to-door purchase to conclude said sales contract or check whether said person has a willingness to receive such solicitation, at their residence, etc." (Article 58-6, paragraph 1). So called "unrequested solicitation" is prohibited.
- 3 When a business operator conducts door-to-door purchase, the following items must be notified to the consumer prior to solicitation: 1) the name of the business operator; 2) the fact that its purpose is to solicit the conclusion of a contract; 3) type of articles to be purchased (Article 58-5), so that the consumer can clearly understand details of the solicitation.
(2) Some buyers suddenly requested consumers to sell some articles without prior approval.
There were some cases where a business operator said "We will buy your clothes" by phone or a consumer asked a business operator "Please estimate my clothes" after seeing a leaflet, but a buyer suddenly urged to sell another article at a consumer's residence, saying like "Do you have any precious metals?" (Case 3-6). Most of these buyers requested consumers to sell precious metals. These ways of solicitation in door-to-door purchase are legally prohibited.4
- 4 If a business operator was requested by a consumer to solicit selling Article A and was invited to the consumer's residence, the business operator must not solicit the consumer for selling Article B or check whether the consumer has a willingness to receive solicitation for selling Article B, because the consumer did not request the business operator to solicit selling Article B. For example, if a consumer sees an advertisement for door-to-door purchase and asks a business operator by phone "I want to sell XX, so I'd like to hear about a sales contract", it is construed that there is a request for solicitation. On the other hand, if a consumer requests appraisal only, it is not construed that there is a request for solicitation. If a business operator actively asks a consumer by phone if it is OK to visit the consumer's residence and makes an appointment to solicit, it is not construed that there is a request for solicitation.
(3) Some business operators didn't deliver a written contract or only gave a rough statement by which individual articles cannot be identified.
When a business operator received an offer for a contract, the business operator must deliver a document containing the name and features of the articles, the purchase price, etc.5 According to the inquiries received, however, some business operators did not deliver any document when concluding a contract and consumers got in trouble without fully understanding contract details (Case 2).
Business operators are required to write on a document "purchase price", "name of the articles", "features of the articles", etc., by which articles purchased can be identified. However, some business operators did not correctly write the number of articles they purchased or roughly wrote the number, for instance, "a set of accessories" and "XX rings", by which articles cannot be specifically identified (Case 1).
- 5 When a business operator received an offer for a contract, or concluded a contract, the business operator must deliver a document describing the offer or contract details under the Act on Specified Commercial Transactions (Article 58-7, Article 58-8). Items required to be written on a document include types and features of the articles, which are necessary to identify the articles.
(4) Some business operators didn't deliver a document describing the cooling-off system or didn't notify in advance that consumers can refuse to hand over articles within the cooling-off period.
There were many cases where a business operator did not deliver a document describing the cooling-off system stated on the Act on Specified Commercial Transactions or did not notify in advance that consumers can refuse to hand over articles within the cooling-off period 6 (Case 1, 2, 3). Some business operators did not observe the rules when concluding a contract, so consumers entered into a contract without knowing the cooling-off system as well as eligibility to refuse to hand over articles and then got in trouble after handing over articles on the spot.
- 6 Under the Act on Specified Commercial Transactions, the cooling-off period is allowed in transactions pertaining to door-to-door purchase, as in the case of door-to-door sales and telemarketing sales. The cooling-off system must be described on a document delivered to a consumer when a business operator received an offer for a contract, or concluded a contract (Article 58-7, paragraph 5, and Article 58-8). The act states that a consumer can refuse to hand over articles subject to the contract to the business operator during the cooling-off period (within 8 days after he or she receiving the documents specified in laws) and that when a business operator receives articles directly from the counterparty of a sales contract, the business operator must inform the counterparty that the counterparty can refuse to hand over the articles (Article 58-9).
(5) Even if requesting the cooling-off period, articles might not be returned.
In some cases, articles were not returned although a consumer demanded a business operator to return the articles within the cooling-off period (Case 3). In door-to-door purchase transactions, consumers are sellers. Some business operators resold articles to a third party without notifying to do so to an original owner, as a result of which the articles were not returned7 (Case 2). Sometimes business operators loose articles due to poor management. In the worst case, business operators cannot be reachable (Case 6).
- 7 If a business operator receives articles from the counterparty of a door-to-door purchase transaction, and then hands over said articles to a third party within the cooling-off period, the purchaser must make notification to the counterparty (Article 58-11) and to the third party (Article 58-11, paragraph 2) when said articles are handed over to the third party.
(6) Some buyers urged to sell things in strong terms
There were many cases where a buyer induced a consumer to sell things in strong terms, which frightened the consumer. In some cases, a buyer intimidated a consumer into selling precious metals although he/she was refusing to do so, barged in a house, or took something away without permission (Case 4).
Advice for consumers
(1) If a buyer suddenly comes, don't let him/her into your house.
Business operators are legally prohibited to suddenly visit someone's house to solicit selling things. Do not allow such a buyer into your house. Even if a business operator contacts you in advance, do not enter into a contract with a business operator which doesn't clarify the company name, articles to be purchased, etc. prior to solicitation.
(2) If a buyer induces you to sell precious metals which you didn't agree to sell, flatly refuse to do so.
If a business operator says "We will buy your clothes" when making an appointment and a buyer visits and solicits you for selling different articles saying like "Do you have any precious metals?", the conduct is legally prohibited. However, there's no end of troubles with business operators which take prohibited actions. In order to avoid such trouble, flatly refuse to sell something you don't want to.
(3) Carefully read documents from a business operator.
When a business operator received an offer for a contract, or concluded a contract, the business operator must deliver a document describing details of the contract (type & purchase price of the articles; name & address of the business operator, etc.). If such a document is not given by a business operator, demand it. When a document is delivered, carefully read it to check if features of the articles are correctly described, if the number of the articles is correct, etc. In order to avoid discrepancies, check articles with the business operator one by one. The document is essential not only for knowing contact information of the business operator and contract details, but also for cancelling the contract and demanding return of the articles. In order to avoid potential trouble, don't enter into a contract with a business operator which doesn't deliver a document or deliver an insufficient document.
(4) Consumers can refuse to hand over articles to a business operator within the cooling-off period.
In door-to-door purchase transactions, consumers may execute cooling-off. If articles are sold and handed over to a business operator, the business operator might lose the articles or might resell them without notifying the original owner. As a result, articles may not be returned even if a consumer executes cooling-off. In order to avoid such problems, consumers can refuse to hand over articles to a business operator within the cooling-off period. Remember there is an option to keep articles with you till the end of the cooling-off period instead of handing them over to a business operator. During the period, you can also consider if it's really necessary for you to sell the articles.
(5) If you get in trouble with a business operator, consult your local consumer center.
If you get in trouble with a business operator when or after concluding a contract (e.g. if you are induced to sell articles different from those initially mentioned by the business operator, if you suffer interference while trying to use the cooling-off period), consult your local consumer center. If you worry about your safety when a buyer enters your house without permission or intimidates you, inform the police of the problem. Precious metals may be taken away when you don't pay attention to them. Stow away articles instead of leaving them in front of a buyer.
- * Consumer hotline: 188 (no prefix)
The three digit phone number, which is common nationwide, will connect consumers to a nearby consumer center established by a local government.
Request to the government
There were cases where consumers could avoid trouble if they had known the cooling-off system and eligibility to refuse to hand over articles. Some business operators engaged in door-to-door purchase might not fully understand the rules under the Act on Specified Commercial Transactions. In light of the circumstances, NCAC requests the following to the Consumer Transaction Division of the Consumer Affairs Agency.
- To give consumers an easy-to-follow information on the outline of the legal system regarding door-to-door purchase transactions as well as measures for consumers to take against business operators (e.g. the cooling-off system, refusal to hand over articles, etc.)
- To keep business operators informed that they are required to observe the rules under the Act for Specified Commercial Transactions and that business operators conducting against the Act for Specified Commercial Transactions shall be instructed to improve their business operations or strictly imposed punishment.