April 17, 2020 Guidance to MOTTO Support Kabushiki Kaisha

The Ministry of Internal Affairs and Communications (MIC) found that MOTTO Support Kabushiki Kaisha (headed by Representative Director Yukihiro Nomi) violated Article 27-2 (i) of the Telecommunications Business Act (Act No. 86 of 1984), which specifies certain disciplines, including the prohibition of misrepresentation. Accordingly, MIC has today instructed the company to ensure compliance with the Act.

1．Outline of case and contents of administrative guidance

• 1.

  MIC found the false statements as specified below in a leaflet introducing the MOTTO Hikari Consumer Counseling Service of MOTTO Support Kabushiki Kaisha (hereafter “MOTTO”) for providing customer complaint consultation for its optical line service MOTTO Hikari^* (hereafter “the service”).

  • The MOTTO Hikari Consumer Counseling Service is a third-party organization operated by a private company based on the Consumer Safety Act.
  • If it is difficult to solve the problem through voluntary negotiations, the MOTTO Hikari Consumer Counseling Service will mediate with the vendor.

  Nevertheless, it became clear that MOTTO distributed the leaflet to approximately 300 users through its dealers from January 15 through March 5, 2020, with no in-house fact checks. The distribution of the leaflet was recognized to have violated Article 27-2 (i) of the Telecommunications Business Act. Article 27-2 (i) stipulates that telecommunications carriers and persons entrusted with intermediation, etc. must not intentionally fail to disclose or misrepresent “material particulars about the contract for the provision of telecommunication services that would affect the decision of users” (prohibiting misrepresentation).

  • *
    An optical line service that MOTTO purchases in wholesale trade from Kizuna Communications Inc. and provides to consumers (Kizuna Communications Inc. purchases optical fiber services in wholesale trade from Sony Network Communications Inc.)
• 2.
  MIC and Consumer Affairs Centers nationwide have received many complaints and consultations regarding MOTTO dealers’ telephone solicitation of this service. Many cases were suspected to be inappropriate solicitations. These solicitations included a case of a dealer introducing itself to a user as if the dealer were a major telecommunications carrier or its sales agent that the user had a contract with. The dealer misled the user by inferring that the solicitation was by the telecommunications carrier or its sales agent.
  Furthermore, in a document created by MOTTO regarding business procedures for dealers, a description was confirmed, which stated that solicitations should be made after introducing the service content without giving the name of the telecommunications carrier that provides the targeted telecommunications service. It was likely that MOTTO violated the provisions of Article 27-2 (ii) of the Act (prohibiting solicitations without giving their names), and it was clear that MOTTO violated Article 27-4 (stipulating obligation to take measures, such as instructions to dealers).
• 3.

  From the above circumstances, MIC has instructed MOTTO to ensure thorough compliance with the Act.(Main contents of the instructions)

  • Thorough compliance with Article 27-2 (i) and (ii) and Article 27-4 of the Act To comply thoroughly with the provisions of Article 27-2 (ii) (prohibiting misrepresentation), (ii) (prohibiting solicitations without giving their names), and Article 27-4 (stipulating obligation to take measures, such as instructions to dealers). In this regard, MOTTO must thoroughly refer to the Guidelines for Consumer Protection Rules for the Telecommunications Business Act of March 2016 (Final revision of March 2020) and the FY2018 Monitoring (Evaluation and Assessment) of Implementation Status of Consumer Protection Rules and pay particular attention to the following items.
  • It violates the provisions of Article 27-2 (i) of the Act to misrepresent important matters relating to contracts that may affect the judgment of users.
  • It violates the provisions of Article 27-2 (ii) of the Act to make a solicitation without telling their names before the solicitation or making a solicitation without notice.

2．Prohibition of solicitations without telling their names or without notice on solicitations

The Act on Partial Amendments to the Telecommunications Business Act (Act No. 5 of 2019) came into effect on October 1, 2019, which revised the previous Telecommunications Business Act. Accordingly, Article 27-2 (ii) of the revised Telecommunications Business Act stipulates the prohibition of solicitations without telling the solicitors’ names or without notice of solicitations. Under the above provisions, telecommunications carriers or their dealers shall not make solicitations without telling their names before soliciting the conclusion of contracts relating to the provision of telecommunications services. (That is, the dealers shall tell the names of the telecommunications carriers that provide telecommunications services related to the solicitations as well as the names of the dealers if the dealers make solicitations).
Telecommunications carriers and distributors need to be fully aware of this point and make efforts to implement consumer protection rules.

MIC will continue striving to enforce the law to protect the interests of users.