June 12, 2020 Guidance to easplant and Its Sales Agent NLINK Co., Ltd. on Improper Solicitation of ISP Services Misleading People to Believe It a Guide to Change Optical Line Operators

  The Ministry of Internal Affairs and Communications (MIC) has today instructed easplant (a company headed by Taiki Higashiyama, Representative Director) and its sales agent NLINK Co., Ltd. (headed by Shun Nakayama, Representative Director) to ensure their compliance with the Telecommunications Business Act (Act No. 86 of 1984). They were recognized to have violated Article 27-2, Paragraph 2 of the Act, which prohibits solicitation without telling the fact of their solicitation, their names, and other identities.

1.Outline of the case and content of administrative guidance

  • 1.
    Many complaints have been submitted to MIC and consumer service centers nationwide regarding Easnet* (hereafter referred to as “the service”), which is an ISP service provided to consumers by easplant. These complaints include many cases suspected to be inappropriate solicitations, including the following cases:
    • Cases where they identified themselves as a major telecommunications carrier or its sales agent with which users contracted and the users were solicited in the misbelief that they were a major telecommunications carrier or its sales agent.
    • Cases where they did not accept contract withdrawal though they explained to users that the contract would not be concluded until they visit the user after the telephone solicitation.
    • *
      An ISP service that easplant receives wholesale from i.com. and provides to consumers.
  • 2.
    Of the complaints received for the service, MIC recognized that the telephone solicitation made by NLINK Co., Ltd. (hereafter referred to as “NLINK”), a sales agent handling the service, violated the provisions of Article 27-2, Paragraph 1 (i.e., the prohibition of misrepresentation) and Paragraph 2 (i.e., the prohibition of soliciting without telling the name or the fact of solicitation) of the Telecommunications Business Act (hereafter referred to as “the Act”).
  • 3.
    MIC found that they used a document that did not contain basic explanation items prescribed in Article 26 (Explanation of Terms and Conditions for the Provision of Services). From this, MIC recognized their violation of the provisions of the same article.
  • 4.
    They informed that the contract would start after setting up the service by easplant’s sales agent after a solicitation for the service over the phone.
    Nevertheless, the date of the telephone solicitation was stated as the contract conclusion date in the contract document sent to the users. It turned out that some users received contract documents before the contract was concluded. From this fact, MIC recognized their violation of the provisions of Article 26-2 (Delivery of Documents) and Article 27-2, paragraph 1 (i.e., the prohibition of soliciting without telling the name or the fact of solicitation).
  • 5.
    Furthermore, MIC found the following facts:
    • A document prepared by easplant on the procedure of business related to its sales agent’s door-to-door sales stated that its agent should introduce the service content before the solicitation without giving the name of the telecommunications carrier providing the telecommunications service.
    • A user has applied for the cancellation of the service. However, the cancellation process was hindered by the fact that multiple people of easplant and NLINK responded to the cancellation. As a result, they did not complete the cancellation procedure for more than three months.
    • The sales agent explained to users that the contract would not be concluded until they visit the users after their solicitation over the phone.
      Nevertheless, the sales agent did not accurately transmit the users’ information on the contract to easplant. Therefore, a contract document was issued to the users who canceled the door-to-door sales. Moreover, the usage fee for the service was charged and collected as if the users had signed the contract.

    These facts indicate that easplant did not take measures to properly and reliably conduct the work entrusted to its sales agent. Therefore, MIC recognized easplant’s violation of the provisions of Article 27-4 of the Act (Measures for Guidance for Intermediary Business Trustees).

  • 6.
    From these circumstances, MIC instructed easplant and NLINK to ensure thorough compliance with the law.

    (Main content of instructions for easplant)

    • 1.
      Thorough compliance with the provisions of Article 26, Article 26-2, Article 27-2, Paragraph 1 and Paragraph 2, and Article 27-4 of the Act That is, Article 26 (Explanation of Terms and Conditions for the Provision of Services), Article 26-2 (Delivery of Documents), Article 27-2, Paragraph 1 (i.e., the prohibition of misrepresentation) and Paragraph 2 (i.e., the prohibition of soliciting without telling the name or the fact of solicitation), and Article 27-4 (Measures for Guidance for Intermediary Business Trustees).
    • 2.
      Report on the implementation of recurrence prevention measures
      For the prevention of such improper cases from occurring in the future in the telecommunications service that easplant provides, easplant should take recurrence prevention measures promptly based on the above guidance and report in writing to MIC by July 9, 2020.

2.Notice to call users’ attention

Regarding optical line services sold wholesale by Nippon Telegraph and Telephone East Corporation or Nippon Telegraph and Telephone West Corporation (hereafter referred to as NTT East/West), a procedure for business operator changes started on July 1, 2019. This procedure enables users to change business operators (hereafter referred to as “optical collaboration operators”) that provide the users with optical line services purchased at wholesale from NTT East/West. Accordingly, users can choose other optical collaborative operators or NTT East/West.

Recently, MIC confirmed the following solicitation method of easplant and its sales agent NLINK for their service.

  • 1.
    They conduct solicitation over the phone and contact users who have contracts with optical collaboration operators. They announce that it is a guide for ISP services. Immediately afterward, they pretend to be giving optical line information. They provide information on optical line charges, saying that the users’ charges would be suppressed by taking the procedure for business operator changes and changing the optical line service provided by NTT East/West.
  • 2.
    After the users agree to business operator changes for the optical line service, they tell users that the users need a separate ISP service contract and explain their service. Then they tell the users that they will take a detailed procedure for changing operators and make settings related to the service at the time of their visit and engage to visit the users.
  • 3.
    When they visit, they show the procedure for business operator changes (procedure related to contacting users’ optical collaboration operators currently under contract and NTT East/West) and make settings for the service.

Due to this solicitation method, the users misunderstand that a major telecommunications carrier, such as NTT East/West Japan, has made the solicitation. As a result, MIC has been receiving many complaints from users saying that they have signed ISP service contracts with companies, of which the users do not know.

MIC and consumer service centers are receiving complaints and consultations about telecommunications carriers who use the same solicitation method, besides easplant. If telecommunications service users receive a solicitation for telecommunications services, be sure to confirm the name of the telecommunications carrier who provides the telecommunications services. Be careful not to sign a contract you do not want.

Contact

For further information about this press release, please fill in the inquiry form and submit it to MIC on the website
https://www.soumu.go.jp/common/english_opinions.html

International Policy Division, Global Strategy Bureau, MIC

TEL: +81 3 5253 5920

FAX: +81 3 5253 5924