The Specified Commercial Transactions Act and Telemarketing
The Specified Commercial Transactions Act (SCTA) regulates business practices prone to consumer disputes and protects consumer interests. Telemarketing - where a business calls a consumer to solicit the purchase of goods or services - is one of the regulated transaction types. The National Consumer Affairs Center receives roughly 60,000 telemarketing-related consultations per year, underscoring the severity of the problem.
Many consumers are unaware of the rights they hold against telephone solicitation. Yet the SCTA provides a robust set of protections. This article explains the key regulations and the specific rights consumers can exercise. See also how to refuse sales calls. Understanding the legal framework around telemarketing is an essential tool for consumer self-defense.
Ban on Re-Solicitation (Article 17)
Once You Say No, They Cannot Call Again
Article 17 of the SCTA prohibits a business from re-soliciting a consumer who has expressed an intention not to enter into a contract. This "ban on re-solicitation" is one of the most practical defensive tools available to consumers.
Crucially, a brief refusal such as "No thank you," "I'm not interested," or "Please don't call again" is sufficient. You are not required to explain your reasons or be polite about it. Once you express your refusal even once, it becomes a legal violation for the same business to call you again about the same product or service.
Businesses that violate the re-solicitation ban may face a business improvement order or a business suspension order from the competent minister (the Commissioner of the Consumer Affairs Agency). In serious cases, a business prohibition order lasting up to three years may be issued. The Consumer Affairs Agency carried out 12 administrative actions related to telemarketing in fiscal year 2023, with re-solicitation violations frequently cited. Combining call blocking with the exercise of your legal rights is the most effective way to eliminate persistent sales calls.
Practical Tips for Refusing
To make the most of the re-solicitation ban, communicate your refusal clearly:
- Say "I refuse. Do not call me again" in clear terms
- Confirm and record the company name and the caller's name
- Record the call (valid as evidence)
- If they call again, say "I already refused. You are violating Article 17 of the Specified Commercial Transactions Act"
Reference books on the Specified Commercial Transactions Act will help you understand the legal basis and respond more assertively. Expressing your Do Not Call preference is a legally protected consumer right.
Cooling-Off (Article 24)
Eight Days to Cancel Unconditionally
If you enter into a contract through telemarketing, you have the right to cancel unconditionally within eight days of receiving the written contract - no questions asked. This is the cooling-off right, and the business cannot obstruct it.
Cooling-off conditions:
- Period - within eight days counting from the day you received the contract document
- Method - notify in writing (postcard, certified mail) or by electronic record (email, fax)
- Reason - none required
- Cost - return shipping is at the business's expense; no cancellation fees or damages may be charged
A 2022 amendment now allows cooling-off notices to be sent electronically (e.g., by email) in addition to paper. However, using certified mail (content-certified post) is recommended because the post office certifies the content and mailing date, preventing the business from claiming it never received the notice.
When Cooling-Off Does Not Apply
Cooling-off is not available in the following cases:
- The consumer initiated the call and requested the purchase
- Cash transactions under 3,000 yen
- Consumable goods that have been used (cosmetics, health foods, etc., as designated by government ordinance)
- Automobile purchases
However, if the business obstructed the cooling-off (e.g., falsely telling you "Cooling-off is not available"), the eight-day period is extended. In such cases, the period restarts from the date the business provides a corrected written notice.
Prohibition of Misrepresentation (Article 21)
False Explanations Are Illegal
Article 21 of the SCTA prohibits businesses from making false statements (misrepresentation) about the following during telephone solicitation:
- Product quality and performance - e.g., "This water purifier turns tap water into natural spring water"
- Price and payment terms - e.g., "This is a special limited-time price" (when it is actually the regular price)
- Cancellation conditions - e.g., "Once you sign, you cannot cancel" (when cooling-off is available)
- Business name and address - using a fictitious company name or address
- Product efficacy - claiming therapeutic effects for a non-pharmaceutical product
If misrepresentation occurred, the consumer can rescind the contract under Article 4 of the Consumer Contract Act. The rescission right may be exercised within one year from the time the consumer could have confirmed the misrepresentation, and within five years from the date of the contract. Misrepresentation is subject not only to administrative sanctions but also to criminal penalties (up to three years' imprisonment or a fine of up to three million yen).
Failure to Disclose Material Facts
In addition to misrepresentation, deliberately withholding material facts that would affect the consumer's decision is also prohibited. For example, emphasizing only the free first month of a subscription service while failing to mention the recurring monthly fee falls under this category.
Other Important Regulations
Obligation to Identify (Article 16)
At the beginning of a telemarketing call, the business must disclose:
- The business's name (or company name)
- The name of the person making the call
- The type of product or service being offered
- The fact that the call is for solicitation purposes
Starting a call under the pretense of "a survey" or "a confirmation call" violates this requirement. See also how to spot robocalls to sharpen your ability to detect suspicious calls early. Check caller ID and be alert to the possibility of number spoofing.
Prohibition of Intimidation (Article 21, Paragraph 3)
Intimidating or confusing the consumer is also prohibited. Statements like "You'll regret it if you refuse" or "Bad things will happen if you don't sign" are illegal. If you experience such conduct, contact the Consumer Hotline (188). See also where and how to report nuisance calls.
Step-by-Step Guide to Exercising Your Rights
How to Send a Cooling-Off Notice
To exercise your cooling-off right, follow these steps:
- Send a notice by certified mail to the business's address listed on the contract document
- Include the contract date, product name, contract amount, and a clear statement that you are canceling the contract
- If a credit agreement is involved, notify the credit company simultaneously
- Keep a copy of the notice and the postal receipt
Guides on writing certified mail will help you draft a legally effective notice.
Consulting a Consumer Affairs Center
If you are unsure how to exercise your rights, or if the business refuses to honor your cooling-off request, call the Consumer Hotline (188). A counselor will guide you through the specific procedures and, if necessary, mediate with the business on your behalf. See also how to report phone scams.
Summary
The Specified Commercial Transactions Act provides robust protections for consumers in telemarketing transactions. The ban on re-solicitation means one refusal is enough to stop further calls. Cooling-off gives you eight days to cancel unconditionally. Misrepresentation gives you grounds to rescind the contract entirely. Knowing these rights and exercising them appropriately is the key to protecting yourself from abusive telemarketing. If you encounter unlawful solicitation, contact the Consumer Hotline (188) and assert your rights rather than suffering in silence.