Trouble over mobile package contract, use of smartphone, etc. - rise in inquiries from elderly consumers

Mobile phone users are on the increase year by year. Today, mobile phones are essential in our daily life. Local consumer affairs centers and similar organizations across Japan have received more than 20,000 inquiries about mobile phones¹ (e.g. "I went to a mobile phone shop to conclude a smartphone contract. I happened to make an unnecessary tablet contract as well.", "I canceled a smartphone contract during when a cancellation fee was not charged. Charges in the final month were not calculated by the day.", "I forgot to turn off my smartphone after phone conversation, which sharply increased the call charge."). Concerning these inquiries, contract signatories aged 60 or more are on the rise. In order to prevent the occurrence and spread of similar problems, NCAC decided to alert consumers and to make a request to relevant organizations, providing recent information.

Diagram: Transition in the annual number of inquiries about mobile phones registered to PIO-NET ²

In FY2013, inquiries about mobile phones amounted to 21,545. Of these, inquiries about smartphones amounted to 9,321 and inquiries from over 60 contract signatories amounted to 3,947. In FY2014, inquiries about mobile phones amounted to 22,744. Of these, inquiries about smartphones amounted to 9,564 and inquiries from over 60 contract signatories amounted to 5,276. In FY2015, inquiries about mobile phones amounted to 26,281. Of these, inquiries about smartphones amounted to 13,734 and inquiries from over 60 contract signatories amounted to 6,672. In FY2016, inquiries about mobile phones amounted to 24,385. Of these, inquiries about smartphones amounted to 14,251 and inquiries from over 60 contract signatories amounted to 6,960. In FY2017, inquiries about mobile phones amounted to 23,354. Of these, inquiries about smartphones amounted to 14,705 and inquiries from over 60 contract signatories amounted to 7,399. In FY2018, inquiries about mobile phones amounted to 8,215. Of these, inquiries about smartphones amounted to 5,297 and inquiries from over 60 contract signatories amounted to 2,706.

1. ¹ Inquiries counted here are inquiries about mobile phone terminals including smartphones and those about mobile phone services offered by communication service contracts (inquiries about MVNO contracts included). Among the inquiries about mobile phones, inquiries about smartphones were identified by inquirers.
2. ² PIO-NET is a database that collects information on inquiries concerning consumer affairs by linking NCAC with local consumer affairs centers and similar organizations across Japan via an online network. The above graph shows data registered through August 31, 2018, excluding inquiries referred from local consumer affairs centers to NCAC.

Sampling of inquiries and complaints

[Case1]

Although I refused to buy a smartphone, I was manipulated into buying one.

[Case2]

I intended to get a new smartphone. A seller induced me to conclude a mobile package contract including a tablet and accessories which are unnecessary for me.

[Case3]

The discount was not applied to charges in the month of cancellation. Moreover, charges in the final month were not calculated by the day.

[Case4]

I entered into a package contract including a smartphone, a tablet, optical line and electricity. However, even a smartphone is difficult for me to use.

[Case5]

I forgot to turn off my smartphone after phone conversation, which sharply increased the call charge.

Problems highlighted from sampling of inquiries and complaints

1. Contracts made were different from those consumers originally intended.
2. Some consumers did not correctly understand the payment structure.
3. Some consumers did not recognize that a cancellation fee would be charged.
4. Even if consumers entered into a contract willingly, some of them did not correctly understand how to use a terminal or the price plan, and got in trouble.

Advice for consumers

1. Check the most costly function in your contract among services provided.
2. Confirm a cancellation fee and discount terms.
3. Attend smartphone training classes offered by mobile phone companies, etc. to get used to a smartphone.
4. If you want to cancel a contract, contact the mobile phone company right away.
5. If you feel uneasy or get in trouble, consult your local consumer affairs center.

Request to the government

To the Ministry of Internal Affairs and Communications (First Telecommunications Consumer Policy Division, Telecommunications Business Department, Telecommunications Bureau)

NCAC requests the government to continually guide telecommunications carriers and their agents as follows.

• Guide them to sufficiently explain monthly charges, a contract period, a cancellation fee and other contract details when soliciting consumers.
• The ratio of inquiries from elderly consumers is on the increase. Sellers should consider consumer's knowledge, experience, purpose of a contract, usage, etc. when soliciting consumers and should give a sufficient explanation so that consumers can properly consider if it is necessary for them to conclude a contract. Guide them to do so.
• Many troubles were triggered by lack of explanation when concluding a contract. Give administrative guidance to companies and agents that violated consumer protection rules under the Telecommunications Business Act with a view to ensuring sound market and preventing consumer damage.

Request to business associations

To Telecom Services Promotion Conference

In light of the increase in inquiries from the elderly, always ensure the following.

• Guide member companies to consider consumer's knowledge, experience, purpose of a contract, usage, etc. in sales activities based on the Telecommunications Business Act and "Voluntary standard and guideline for sales activities by telecommunications carriers".
• Guide member companies to carefully explain monthly charges, a contract period, a cancellation fee, etc. so that consumers can independently determine whether or not it's necessary to conclude a contract.
• Member companies should further make efforts to help consumers understand contract details and use of mobile phones, particularly in case of smartphones.

To National Association of Mobile-phone Distributors

In light of the increase in inquiries from the elderly, always ensure the following.

• In sales activities, mobile phone shops should consider consumer's knowledge, experience, purpose of a contract, and usage based on the Telecommunications Business Act.
• Member companies should carefully explain monthly charges, a contract period, a cancellation fee, etc. so that consumers can understand contract details and choose suitable services independently.
• Member companies should further make efforts to help consumers understand contract details and use of mobile phones, particularly in case of smartphones.