The Specified Commercial Transactions Act and Telemarketing
The Specified Commercial Transactions Act (SCTA, commonly "Tokushoho") targets transaction types in which consumer disputes are common, regulating unfair business practices and protecting consumer interests. Telemarketing is one of the regulated categories: it covers transactions in which a business solicits a consumer by phone to purchase goods or services and then concludes a contract. Consumer affairs centers across Japan continue to receive complaints about telemarketing, and the harm to consumers remains serious.
Most consumers do not know what rights they have when a sales call comes in, yet the SCTA provides a range of powerful protections. This article walks through the main rules governing telemarketing and the rights consumers can actually exercise. Read it alongside how to turn down sales calls. Understanding the legal limits on telemarketing is an essential part of defending yourself.
The Ban on Re-Solicitation (Article 17)
Once You Say No, They Cannot Solicit You Again
Article 17 of the SCTA prohibits a business from soliciting a consumer again once that consumer has expressed an intention not to enter into a contract. This "ban on re-solicitation" is one of the most practical defenses available to consumers.
What matters is that a brief refusal is enough: "No thank you," "I do not need it," or "I must decline" all suffice. You do not have to explain your reasons, and you are under no obligation to be polite about it. Once you have expressed refusal even a single time, it is a violation of the law for the same business to solicit you again regarding the same goods or services.
Where a business breaches the ban, the competent minister can issue an instruction to improve its practices, or a business suspension order halting all or part of its operations for a period of up to two years. When a suspension order is issued, the officers of the business may also receive a business prohibition order barring them from newly conducting the same kind of business for the same period as the suspension. Combining nuisance call blocking with the exercise of your legal rights is an effective way to shut out persistent sales calls.
Refusing Effectively in Practice
To get the most out of the ban on re-solicitation, make your refusal unmistakable.
- Say clearly: "I decline. Please do not call me again."
- Ask for the company name and the caller's name, and write them down
- Keep a recording of the call (useful as evidence)
- If they call again, tell them: "I declined last time. This violates Article 17 of the Specified Commercial Transactions Act."
A do not call declaration is a consumer right protected by law.
The Cooling-Off System (Article 24)
An Eight-Day Unconditional Right to Cancel
If you enter into a contract through telemarketing, you can rescind it unconditionally and without giving any reason (cooling off) for eight days from the day you receive the contract document. This is a powerful right, and businesses are not permitted to obstruct it.
The conditions are as follows.
- Period - within eight days, counting the day you receive the contract document
- Method - notice in writing (postcard or certified mail) or by electromagnetic record (email, fax)
- Reason - none required; you have no duty to explain
- Costs - return shipping is borne by the business, and no penalty or damages may be claimed from you
A cooling-off notice can be given not only in writing but also by electromagnetic record such as email. Even so, certified mail (naiyo shomei) is recommended so that you retain proof: because the post office certifies both the content of the document and the date it was sent, it forecloses any claim by the business that it never received your notice.
When Cooling Off Does Not Apply
Cooling off is unavailable in the following cases.
- Where the consumer called the business on their own initiative and placed the order (this is not telemarketing in the first place; it does count as telemarketing, however, if the business induced you to call without disclosing its solicitation purpose)
- Cash transactions under 3,000 yen
- Consumables that have been used (cosmetics, health foods, and other items designated by Cabinet Order)
- The purchase of an automobile (excluding two-wheeled vehicles)
If the business obstructs cooling off - for example by falsely stating that cooling off is not available - the eight-day period is extended. Where obstruction has occurred, the business must give you a fresh written notice stating that cooling off is available, and a new eight-day period runs from that notice.
The Ban on Misrepresentation (Article 21)
Lying Is a Violation of the Law
Article 21, paragraph 1 of the SCTA prohibits a business from making false statements (misrepresentation) about the following matters in the course of a sales call.
- Type, performance, and quality of the goods - "This water purifier makes tap water identical to natural spring water," or claiming therapeutic effects for something that is not a pharmaceutical
- Sale price or consideration - "This price is available only now" when it is in fact the regular price
- Timing and method of payment - "The total comes to the same in installments" when only a lump-sum payment is possible
- Delivery date of the goods or timing of the service - "It will arrive tomorrow" when there is no stock
- Withdrawal of the application or rescission of the contract - "Once you sign, you cannot cancel" when cooling off is in fact available
- Circumstances making the contract necessary - "Our inspection shows it is dangerous unless you replace it right now" when nothing is wrong
- Any other matter material to the customer's decision
Where misrepresentation has occurred, the consumer may rescind the contract (Article 4 of the Consumer Contract Act). The right of rescission may be exercised for one year from the time you become able to ratify the contract, and no later than five years after the contract was made. Misrepresentation is not only grounds for administrative sanctions but also a criminal offense, punishable by imprisonment of up to three years or a fine of up to three million yen.
Failure to Disclose Material Facts
Beyond outright falsehoods, intentionally failing to disclose facts relating to any of the items listed above, from the type, performance, and quality of the goods through to withdrawal and rescission, is also prohibited (Article 21, paragraph 2). A typical example is a subscription service where only the free first month is emphasized and the charges from the second month onward are never explained.
Other Important Rules
Duty to Identify Oneself (Article 16)
At the outset of a sales call, a business must disclose the following to the consumer.
- The name of the business (for a company, its corporate name)
- The name of the person making the solicitation
- The type of goods or services being offered
- That the purpose of the call is solicitation
Opening a solicitation under the pretense that "this is a survey" or "this is just a confirmation call," or giving a fictitious company name, violates this provision. See also how to spot robocalls, and build the habit of identifying suspicious calls at an early stage. Check the caller ID and stay alert to the possibility of caller ID spoofing.
Ban on Intimidation and Confusion (Article 21, Paragraph 3)
Intimidating a consumer so as to cause confusion is likewise prohibited. Shouting at you, or refusing to hang up and pressing you to sign over a long call, is a violation of the law. If this happens to you, contact the Consumer Hotline (188). See also where and how to report nuisance calls so that you reach the right desk.
Concrete Steps for Exercising Your Rights
How to Send a Cooling-Off Notice
To cool off, send your notice as follows.
- Send the notice by certified mail to the business address stated in the contract document
- State the contract date, the product name, the contract amount, and the words "I hereby rescind the contract"
- If credit financing is involved, notify the credit company at the same time
- Keep a copy of the notice and the postal receipt
Consulting a Consumer Affairs Center
If you are unsure how to exercise your rights, or the business refuses to honor your cooling off, call the Consumer Hotline (188). An adviser at a consumer affairs center will explain the procedure step by step and, where necessary, mediate between you and the business. See also how to report phone scams.
Summary
The Specified Commercial Transactions Act gives consumers strong protection in telemarketing. The ban on re-solicitation means a single refusal is enough to stop the calls, cooling off gives you eight days to cancel unconditionally, and misrepresentation lets you rescind the contract. Consumers have a substantial legal arsenal at their disposal. Knowing these rights and exercising them properly is what protects you from predatory sales calls. If you receive an improper solicitation, call the Consumer Hotline (188) and exercise your rights rather than giving up.