Report Topics:
1:- General Information
2:- Cooling-off Period
3:- Pyramid Schemes
4:- Multi-Level Marketing
5:- Prohibition on Products
6:- Credit Restrictions Country
7:- Money Collections
8:- Licenses
9:- Status of Direct Sellers
10:- Earnings Claims
11:- Taxes and Fees
12:- Social Security
13:- Others
General Information
information
Cooling-off Period
Regarding door-to-door sales, Act on Specified Commercial Transactions lays down a cooling off period of eight days from the date the consumer received the contract.
If the consumer has paid and received the goods, the price you paid to return the item will be returned. Direct seller has to pay the return cost of the goods.
There are three exceptions to the cooling-off rule;
With consumable and specified goods such as cosmetics, detergents and condoms if the goods has been used.
Cash transactions under 3,000 yen.
Private cars.
Cooling-off period is different from the door-to-door sales in MLM. 20 days being given from the day the contract is received or the day the goods are received in case of resale system, whichever the later date.
Pyramid Schemes
Pyramid schemes which are based upon ‘head-hunting’, ie, paying primarily for the introduction of participants into the scheme rather than the sale of products to consumers, are prohibited under Act on Prevention of Pyramid Sales. It is clear that successive additions of ‘children’ or ‘grandchildren’ cannot be maintained without limitless growth. The organisation will come to a halt eventually and the great majority of members will suffer financial loss.
To start a pyramid scheme or induce other persons to join one is prohibited for violation of the law.
Multi-Level Marketing
Act on Specified Commercial Transactions imposes strict regulations on companies engaged in MLM. But not to profit the MLM itself. The fact that this business has caused the social problem in the past, industry image does not have to say a harsh extremely bad environment in Japan.
The law imposes a 20 day cooling-off period on a MLM
＊For your information
The following is the definition of MLM in Act on Specified Commercial Transactions　
Article 33　The term “Multilevel Marketing” as used in this Chapter and Article 58-7, paragraphs (1) and (3) and Article 67, paragraph (1) means the business of sale (including arranging the sale) of articles (including the rights to use facilities or to be provided with services; the same applies hereinafter) or the provision (including arranging the provision) of services in exchange for payment, wherein a counterparty is induced to resell the articles that have been sold thereto (hereinafter referred to as “Goods” in this Chapter and Article 58-7, paragraph (1), item (i)(a)) (“resell” means purchasing the Goods and then selling them; the same applies hereinafter), wherein a counterparty is induced to sell Goods on consignment (meaning being consigned the Goods and then selling them; the same applies hereinafter), wherein a counterparty is induced to arrange the sale of Goods, wherein a counterparty is induced to provide the same kind of services (meaning providing the same kind of services that have been provided thereto; the same shall apply hereinafter), or wherein a counterparty is induced to arrange for such services to be provided, using the possible receipt of a specified profit (meaning all or part of the transaction fees provided by another person who resells, sells on consignment, or arranges the sale of Goods, all or part of the transaction fees provided by another person who provides the same kind of services or arranges for such services to be provided, and any other profits that satisfy the requirements specified by ordinance of the competent ministry; hereinafter the same applies in this Chapter and Article 58-7, paragraph (1), item (iv)), and wherein transactions that involve a specified burden (meaning the purchase of Goods, payment of consideration for services, or provision of a transaction fee; hereinafter the same applies in this Chapter and Article 58-7, paragraph (1), item (iv)) are carried out with the counterparty to sell or arrange the sale of Goods, or wherein transactions that involve a specified burden are carried out with the counterparty to provide or arrange the provision of the same type of services (such transactions include any change in the terms of a transaction; hereinafter referred to as “Multilevel Marketing Transactions”).
Prohibition on Products
Act on Specified Commercial Transactions protects a wide range of products and services in daily use. In addition, the Drugs, Cosmetics and Medical Instruments Pharmaceutical Law stringently prohibits direct selling companies from handling health foods and nutritional supplements which claim that a particular product has certain effects on a particular disease.
Act on Specified Commercial Transactions In this law, foes not cover the transaction of financial securities, commodity exchange programs, insurance plans and the like, made at the customer’s home, there are other laws that regulate them.
In this law, food and beverages sales are legislated and alcohol and tobacco may not be sold without a retail licence and are mainly sold in shops and stores. Rice may not be sold without a government licence.
The sale of contraband drugs and pornographic materials is, of course, prohibited by Japanese law.
Credit Restrictions Country
Installment is covered by Installment Sales Act. If, in any transaction, the price is to be paid in more than three instalments over a period of more than two (2) months, it will be regulated by the Act. Companies engaged in instalment sales must adhere to the following consumer protection provisions:
The terms and conditions of the sale must be fully represented;
A written document must be given to the consumer;
Cooling-off;
The regulations regarding cancellation, etc must be observed;
The regulations regarding the indemnity arising from the cancellation of the contract must be observed;
Consumer complaints against Credit companies;
Purchases beyond the consumer’s ability to pay should be prevented;
Licences must be obtained for instalment sales or specified transactions in which the delivery of the goods will be made after all instalments have been paid.
It is usual for two contracts to be made in door-to-door instalment sales: a purchase contract with the direct selling company and a payment contract with the credit company of which the direct seller is a member.
Money Collections
As mentioned in the preceding section, the Hire Purchase Act regulates instalment sales where the goods are delivered to the consumer after all instalments have been paid over a period of time.
Companies wishing to engage in this type of transaction must obtain a licence from the Ministry of Economy, Trade and Industry. To be licensed, the company must have a certain amount of trading capital. The terms and conditions of the sales contract must also comply with the legal requirements. Licensed businesses must deposit with the bank half of the advance payment received from the purchaser.
Licenses
In general, special licenses for door-to-door sales are not required. Everyone has the right of direct selling of goods and services in Japan as long as they abide by the law.
The Japanese DSA issues a registration certificate to all those salespersons who have completed the training course authorised by the association. The purpose of this education and registration is to enhance the quality of salespeople and the number of registrees now stands at about 8 hundred thousand. Although this registration certificate is not an official license, it serves as a standard by which the consumer can judge the salesperson and his(her) trust.
Any company wishing to sell insurance plans, securities and commodity exchange programs by home visits must obtain a government license.
Status of Direct Sellers
Salespeople engaged in direct selling may be divided into two groups; those with an employment contract with a company and individuals who have a consignment contract with a particular company. An overwhelming number belong to the second group.
Compared with other occupations, the social status of salespeople is not high due to their relatively unstable income and the difficulty in obtaining their customers and peculiar consumers’ troubles, etc.
Earnings Claims
No information.
Taxes and Fees
For salespeople who have contracts of employment, companies participate in the unemployment and social security programs established by the government. Each salesperson’s costs for these programs are split between the salesperson and the company.
However, as stated in Section VIII, the great majority of salespeople are independent, having a consignment contract with a company. Many of these participate independently in the social security programs at their own cost.
Regardless of which type they belong to, salespeople must have taxes withheld from the income they earn.
Social Security
No information.
Others
There are more than seventy (70) consumer protection laws. Of these, major laws affecting the direct selling industry are:
The WFDSA International Guide to Direct Selling Legislation is a guide and is not exhaustive either in terms of subjects presented or for all areas of concern to direct selling companies. It is intended to cover general areas of concern. The Guide is not a substitute for legal counsel but only intended to alert you to the general nature of laws and regulations affecting the direct selling industry in a particular country. Consequently, before beginning an operation in any foreign country, it is strongly recommended that competent legal counsel be consulted. While every effort has been made to insure that the information contained in this Guide is accurate, the variety of sources used makes absolute verification difficult. Further, laws and regulations also can change from time to time without notice. Therefore, the WFDSA cannot be held liable for the information included in this publication.