1. Background of Study
In addition to applying Article 21 of the Fair Trade Law to determine whether advertisements are untruthful and illegal, the FTC has also acted in line with the "Fair Trade Commission Disposal Directions (Guidelines) on Handling (of) Cases Governed by Article 21 of the Fair Trade Law" as well as FTC's nearly two decades of law enforcement experience to establish principles for handling of various types of such advertisements. With regard to real estate advertisements, the FTC already formulated the "Fair Trade Commission Disposal Directions (Guidelines) on Cases of Real Estate in Advertising" in 2006. This study is aimed to analyze whether the approaches of the FTC law enforcement on untruthful real estate advertising can actually achieve the expected results. First of all, it is necessary to examine if the aforementioned handling principles have proven effective in reducing the number of such advertisements. Furthermore, based on the types of advertising prescribed in the handling principles and the FTC's current law enforcement approaches against untruthful advertising, the focus of this study will be set upon whether there are ambiguities and inadequacies in the FTC law enforcement practices and the subsequent administrative remedy procedures in order to determine if further review and revision will be required to improve the FTC's regulatory measures.
2. Methods and Process of the Study
The principal methods adopted by this study are literature analysis and case analysis. The former is primarily applied to the examination of the current practices in real estate advertising for the purpose of understanding the particular developments arising from the practices. Secondly, the dispositions from the FTC and judicial verdicts in the past are collected and analyzed to classify and understand the regulatory measures the FTC has adopted against untruthful real estate advertising as well as the questions derived from the enforcement of measures. Thirdly, case analysis method is employed to conduct basic statistical analysis and, based on the results, relevant issues are discussed thoroughly. This paper is divided as follows: Chapter 1 is the introduction. Chapter 2 explains the current tendencies in real estate advertising and the corresponding laws and regulations applicable for such actions. In Chapter 3, a basic statistical analysis is conducted on the dispositions the FTC has administered and the problems encountered by the FTC in its implementations of related laws and regulations are analyzed and reviewed. Chapter 4 concludes with some suggestions.
3. Main Suggestions
Based on the results of analysis and review, the following suggestions with regard to the regulations and law enforcement on untruthful real estate advertisements are proposed by this Study:
- In spite of the dispositions and administrative fines the FTC has handed out, there is no significant decrease in the numbers of untruthful advertisements regarding "building appearance, design and floor plans," "duplex apartments," "inconsistency between building use and the construction or usage license issued," and "residential housing in industrial districts." The reasons behind the above mentioned facts and the improvement measures adopted by the FTC have to be a key concern in future law enforcement. It is suggested that, in addition to listing the above types of illegal conduct as key areas calling for enhanced law enforcement, the FTC must also make every effort to widely exhort associations of real estate businesses and s consumers to understand the significance in conducting fair trade and abiding by related laws and regulations.
- Since its promulgation in 2006, the "Fair Trade Commission Disposition Directions (Guidelines) on Cases of Real Estate in Advertising" has proven feasible except with cases that they were not designed to cover. This has resulted in revocation of FTC's sanctions by appeal review agencies on the grounds of lack of clearly defined regulations on such violations and absence of warning in advance in these Directions (Guidelines). However, the results of statistical analysis and case reviews have proven that untruthful advertising regarding "public housing units," "misleading representation of acquisition of construction licenses that have not been issued," and "adverting for columbaria that misleads consumers to believe the corresponding land development and use have been approved by competent authorities" has ceased to occur. On the other hand, the FTC has imposed sanctions upon a number of untruthful advertisements on the provisions of hot springs, despite that such actions are not prescribed in the handling principles as illegal. To prevent controversial application of regulations leading to revocation of FTC's sanctions by appeal review agencies as stated earlier as well as to accommodate changes in advertising practices, it is necessary to review and amend the Fair Trade Commission Directions (Guidelines) on Cases of Real Estate in Advertising and revise the existing regulations against 16 different illegal types of advertising into three major categories each of which with subcategories to deal with "land," "building," and "peripheral environment" issues and violations of building regulations, with examples of related illegal conduct provided, in order to fully cover every illegal practices and to make sure that no untruthful advertising approaches are overlooked. As for other related issues, such as the quality of construction projects (rates of return, durations of businesses, etc.,), representations that mislead consumers to believe government agencies or other enterprises are associated with the sellers, and uses of untruthful wording related to quality, that are currently not covered by the handling principles, the general law enforcement principles and handling approaches the FTC adopts against untruthful advertisements for common products already prove to be sufficient to deal with the situations. Therefore, there will be no need to include these areas when the revision of the laws and regulations is conducted in the future.