The Specified Commercial Transactions Act covers seven transaction types - door-to-door sales, mail order sales, telephone solicitation sales, multilevel marketing transactions, specified continuous service offers, business opportunity sales transactions, and door-to-door purchasing - regulating how traders solicit customers and conclude contracts while giving consumers remedies such as a right of cancellation. It was enacted in 1976 as the "Act on Door-to-Door Sales, etc." (Act No. 57 of 1976) and took its current name on 1 June 2001 under the amendment of 2000 (Act No. 120). Where a phone call is the point of dispute, the provisions on telephone solicitation sales are the ones that matter.
Four rules do most of the work for telephone solicitation sales. First, before soliciting, the trader must state its name, that the purpose of the call is solicitation, and the type of goods or services involved (Article 16). Second, soliciting a person who has indicated that they will not enter into a contract is prohibited (Article 17). Third, misrepresentation, the intentional withholding of material facts, and intimidating or distressing conduct are prohibited (Article 21). Fourth, the trader must deliver a document when it receives an application by mail or similar means (Article 18) and again when the contract is concluded (Article 19). The Act does not apply, however, to transactions entered into for or as a business, or to sales to persons outside Japan, among other exclusions (Article 26), so business-to-business solicitation calls fall outside these rules.
In practice the document delivery duty carries most weight through its link to cooling-off. For telephone solicitation sales the period runs for eight days counted from the day the Article 19 document is received, or from the Article 18 document if that one came first (Article 24). In other words, the clock does not start while no document has been delivered. Where the consumer was prevented from exercising the right by misrepresentation or intimidation, the eight days instead run from the day they receive the corrective document the trader must then deliver. The cancellation takes effect when the notice is dispatched, and the trader may not claim damages or a penalty.
A trader in breach may first be directed by the competent minister to take necessary measures (Article 22). Where fairness in the transaction or purchasers' interests are found to be at serious risk, the trader can be ordered to suspend its operations for a period of up to two years (Article 23), and such orders must be made public. Officers and employees of the company can additionally be barred, for the same period, from newly starting the same kind of business, including taking office as an officer of another company (Article 23-2), which closes off the pattern of restructuring the company and carrying on with the same solicitation. Penalties include imprisonment for up to three years or a fine of up to 3 million yen for failing to make the Article 16 disclosures or for misrepresentation under Article 21 (Article 70).
For anyone on the receiving end of a call, the useful point to remember is that the rules bite on the solicitation process itself, not only on concluded contracts. Being pressed to "decide today," or getting another call from the same trader after refusing, may run against Article 17 or Article 21 even if nothing was signed. Noting the date and time, the trader's name, the phone number, and what was said makes it far easier to explain the situation when you call the consumer hotline (188) and are connected to your nearest consumer affairs centre. For how the different reporting channels differ, see How to Report Phone Scams - A Complete Guide to Filing Reports. Concrete responses to suspicious calls from telemarketing operators are collected in How to Refuse Sales and Solicitation Calls.