Case:
Dotcom Technology Co., Ltd. violated the Fair Trade Law by employing false and misleading representations regarding the service quality in the loan agency service advertisement
Keywords:
loan, interest rate, only, false and misleading
Reference:
Fair Trade Commission Decision of October 7, 2004 (the 674th Commissioners' Meeting); Disposition (93) Kung Ch'u Tzu No. 093095 of October 8, 2004
Industry:
Other Financing and Auxiliary Financing Not Elsewhere Classified (6299)
Relevant Law:
Article 21 (3) of the Fair Trade Law, applicable mutatis mutandis to Article 21 (1)
Summary:
| 1. | This case originated from a complaint filed by another enterprise, stating that: Dotcom Technology Co., Ltd. claimed "Dotcom Loan the only quality loan public company" in the advertisement in newspapers. However, many banks are public companies and engage in relevant loan businesses. It is not true that Dotcom is the "only" public company as claimed. Moreover, with respect to the actual example given by Dotcom in the advertisement, after the preliminary inquiry, with the situation in the example, the loan amount claimed may never be granted. Dotcom might be engaged in possible false advertising. |
| 2. | Upon the investigation, the Fair Trade Commission (FTC) found that: according to the "Investigation Form of Relevant Information Regarding Loan Service Agencies Legally Commissioned By Bank Members of the Bankers Association of the Republic of China" published on June 15, 2004, among nearly one hundred commissioned agencies, two are public companies or listed companies. Dotcom is neither the only public company nor listed company in the loan agency service industry. The advertisement in question that claimed "Dotcom Loan the only quality loan public company" is obviously inconsistent with the fact, and makes false and misleading representations, in violation of Article 21(3) of the Fair Trade Law, applicable mutatis mutandis to Article 21(1). Moreover, advertisement with actual examples is utilized to elevate the trust of trading counterparts toward the goods or services through the successful experience of specific cases. If an enterprise employs a true example as the representations of the advertisement, it shall ensure the authenticity of the example. The representations of the true loan example published in the newspaper advertisement by Dotcom are sufficient to make applicants believe in Dotcom's good performance of loan agency services and trade with it. Since Dotcom made such representations, it shall be responsible for the truthful representations and shall provide examples that objectively exist as evidence. Also, matters concerning the approval of loan, actual approved amount, interest rate, and monthly minimum payment shall be reviewed by the banks based on applicants'credit status. The conditions may vary from applicant to applicant. It is doubtful that whether applicants may be granted the loan with the interest rate claimed by Dotcom in the situation of the example in question. According to the information of the Central Bank of China and information regarding individual credit loans and government employee and teacher loans promoted by various banks, no loan with an interest rate as low as the rate that Dotcom claimed exists. Dotcom also admitted that the example in the advertisement, instead of an actual case, was made up based on the sums of various cases. Dotcom failed to provide any individual information concerning the example and concrete evidence of successful loans. It also failed to provide the bank name and relevant loan information, which could comply with the loan conditions as stated in the example, as evidence. The said example indeed made false and misleading representations and violated Article 21(3) of the Fair Trade Law, applicable mutatis mutandis to Article 21(1). After considering Dotcom's motivation of the unlawful act, the degree of the act's harm to trading order, the circumstances of the violation, the scale, and its attitude following the violation, the FTC, in accordance with the fore part of Article 41 of the Fair Trade Law, ordered Dotcom to immediately cease the aforementioned unlawful act and imposed an administrative fine of NT$ 50,000. |
Summarized by Yang, Yi-Wen;
Supervised by Wu, Lieh-Ling
Appendix:
Dotcom Technology Co., Ltd.'s Uniform Invoice Number: 70477230