Alleged improper marketing in violation of the Fair Trade Law by Yung Ch'ang Beauty Parlor and Yung Hui Beauty Parlor (the Yunghua Street, Tainan and Minsheng Street, Kaohsiung Branch Stores of the Hao Shuai Men's Skin Care Chain)
Case:
Alleged improper marketing in violation of the Fair Trade Law by Yung Ch'ang Beauty Parlor and Yung Hui Beauty Parlor (the Yunghua Street, Tainan and Minsheng Street, Kaohsiung Branch Stores of the Hao Shuai Men's Skin Care Chain)
Key Words:
beauty parlor, skin treatment
Reference:
Fair Trade Commission Decision of August 31, 2000 (the 460th Commissioners' Meeting); Dispositions (89) Kung Ch'u Tzu No. 150 and (89) Kung Ch'u Tzu No. 151
Industry:
Barber and Beauty Shops
Relevant Laws:
Articles 24 and 41 of the Fair Trade Law, Article 33 of the Enforcement Rules of the Fair Trade Law
Summary:
1. Complaints were filed by someone in the general public alleging that the Yung Ch'ang Beauty Parlor ("Yung Ch'ang") and Yung Hui Beauty Parlor ("Yung Hui") had failed to disclose its fee schedule and fraudulently extorted service fees from them. (1)Yung Ch'ang Someone from the general public, Mr. Su, complained in a letter to the Fair Trade Commission (the Commission) that he had visited Yung Ch'ang for skin treatments under a membership plan. The shop did not disclose information concerning service fees and product prices, and the beauticians did not give him any advance notice when employing products or apparatus for which there was an extra charge. After the skin treatments, the shop demanded that Mr. Su sign and fingermark a contract to acknowledge the extra expenses incurred. Altogether the shop extorted some NT$300,000 from him in this way, Mr. Su alleged. (2)Yung Hui An unnamed one from the general public complained in a letter to the Commission that he had visited Yung Hui in 1999 for successive hair regeneration treatments and had joined its "gold card" membership plan. In the course of the treatments, the beauticians did not give any advance notice when employing products or apparatus for which there was an extra charge. Only after finishing a treatment did they tell him the cost and demand that he sign his name on an "expense record card." The shop extorted huge amounts of money from him in this way on successive occasions, totaling over NT$3.6 million, he alleged. 2. Findings of the Commission's investigation: (1)Yung Ch'ang A comparison of the fees and product prices on the product order contract and membership agreement forms provided by Mr. Su with the fee schedule provided by Yung Ch'ang has showed that Yung Ch'ang had failed to provide complete fee information. Yung Ch'ang also failed to give Mr. Su a discount consistent with the terms of its agreement with him. The Commission moreover conducted a questionnaire survey of consumers on the name list provided by Yung Ch'ang. Most of the consumers reported that the shop failed to publicly post its fee schedule in a conspicuous place at its business site. As a result, its customers lacked ready access to relevant information and were unable to determine the actual service fee scheduled employed by the store. Only after the services had been provided did the shop inform them that they owed high fees that they could not have anticipated. Furthermore, the shop consistently failed to inform customers in advance when employing products or apparatus for which there was an extra charge, causing the customers to believe that they were receiving ordinary services until the shop demanded that they pay extra fees. (2)Yung Hui In addition to carrying out an on-the-spot investigation of Yung Hui, the Commission conducted a questionnaire survey of customers on the name list the shop kept. Most of the consumers reported that the shop failed to publicly post its fee schedule in a conspicuous place at its business site, and failed to disclose its actual service fees. Only after the services had been provided did the shop inform them that they owed high fees that they could not have anticipated. Furthermore, the shop consistently failed to inform customers in advance when employing products or apparatus for which there was an extra charge, causing the customers to believe that they were receiving ordinary services until the shop demanded that they pay extra fees. 3. Reasons for the Commission's disposition (1)Yung Ch'ang The investigation findings confirmed that Yung Ch'ang, in the course of its transactions with consumers, exploited the disparity of information between itself and the consumers and deliberately concealed important information such as the cost of various beauty products and charges for use of its apparatus. Such concealment of important information to induce trading counterparts to trade constituted "deceptive acts" in violation of Article 24 of the Fair Trade Law. The Commission therefore disposed against Yung Ch'ang pursuant to the fore part of Article 41. Yung Ch'ang was ordered to immediately cease the actions and to pay an administrative fine of NT$750,000. (2)Yung Hui The investigation findings confirmed that Yung Hui exploited the disparity of information between itself and consumers and deliberately concealed important information such as the cost of various beauty products and charges for use of its apparatus. Such concealment of important information to induce trading counterparts to trade constituted "deceptive acts" in violation of Article 24 of the Fair Trade Law. The Commission therefore disposed against Yung Hui pursuant to the fore part of Article 41. Yung Hui was ordered to immediately cease the actions and to pay an administrative fine of NT$750,000. Appendix: Yung Ch'ang Beauty Parlor's Uniform Invoice Number: 73868387 Yung Hui Beauty Parlor's Uniform Invoice Number: 19765336 Summarized by Hsu Cho Yuan and Lin Chien Ching; Supervised by Lin Yow Ching