Marketing (Taiwan) Ltd. was complained for disseminating untrue information in seminars recruiting its club members in violation of Article 24 of the Fair Trade Law
Chinese Taipei
Case:
Marketing (Taiwan) Ltd. was complained for disseminating untrue information in seminars recruiting its club members in violation of Article 24 of the Fair Trade Law
Key Words:
association with another's reputation (name), deception, obviously unfair
Reference:
Fair Trade Commission Decision of 24 September 1997 (the 308th Commission Meeting); Disposition (86) Kung Chu Tzu No. 166
Industry:
Consulting services industry (7040)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
1. Yung Jan Law Offices filed a complaint with the Commission indicating that its office has received several complaints from consumers alleging that while attending a seminar on the H.C. Asia Pacific GCI Holiday Programme held by the sanctioned party, they were told that GCI Marketing Ltd. (GCI) had Yung Jan Law Offices as its legal counsel and that the managing partner of the firm, Lee Yung-jan, Esq. was also an investor in the club. If attendants found out that GCI's legal counsel was another lawyer, Lee Wei-t'ing, they were told that Lee Yung-jan Esq. had entrusted his partner, Lee Wei-t'ing Esq., to accept the letter of appointment on his behalf. The truth was that GCI had appointed Lee Wei-t'ing as its legal counsel from the outset and that Lee Yung-jan was neither involved in GCI's investment project, nor had he reviewed any of its products or documents. In addition, there was no partnership between these two lawyers. The complainant had request GCI by writings to rectify, yet GCI continued providing consumers with misleading information in subsequent seminars. The sanctioned party deceived the consumers with untrue statements and intentionally associated itself with the complainant's reputation for the purpose of enhancing the credibility of its product. Such an act constituted a violation of the Criminal Law, the Consumer Protection Law, and Article 24 of the Fair Trade Law.
2. The issue of the case was that the sanctioned party associated itself with complainant's reputation and defrauded consumers with untrue statements in order to enhance the credibility of the product, which constitutes a violation of Article 24 of the Fair Trade Law. In view of the postal attestation letters received by the complainant from consumers since August 1996, the Commission has reasonable basis to believe the allegation made against the sanctioned party. It was unlikely that a number of consumers would point out the same facts, either concurrently or one after another, unless the sanctioned party was intentionally misleading consumers to believe that it had appointed Yung Jan Law Offices as its legal counsel. The sanctioned party defended that only in the instances where customers expressed that they only have heard of Lee Yung-jan, Esq. few salespersons would agree that Lee Yung-jan, Esq. also owns of Chang Li Law Offices. Such accommodation reply was false.
3. The sanctioned party claimed that it had admonished its sales force more than once not to make such misleading statement. Such claims clearly were only excuses because of the following facts: (1) The complainant attested that six members of the public, including Mr. Ts'ai, Mr. Pai, Mr. Lee, and Mr. Wang, sent postal attestation to GCI from September through November 1996 and copies of these letters to the complainant's law office. It was alleged that four of GCI's sales representatives, Ms. Chu, Ms. Ling Feng-chin, Mr. Chen Chen-hsiang, and Mr. Wang Yuan-lu, had entertained the six consumers. Had GCI not given them instructions, the four sales representatives would not have made the same or similar statements, nor would the six consumers have had the same reaction in complaining GCI. (2) On 17 September 1996, the complainant sent GCI a Lawyer Letter (85) (9) Jan Fa Tzu No. 1368, demanding immediate rectification of the unlawful act of disseminating untrue information regarding its products. On 5 October 1996 at 2:00 p.m., GCI held another seminar. Yet on 9 October 1996 two consumers, Mr. Huang and Ms. Lee, both sent a postal attestation letter to GCI at Taipei Post Office No. 5240. In view of the time between the said two events, it could be concluded that whoever the GCI representatives present at the seminar held on 5 October were, obviously they deceived consumers by making untrue statements again. (3) As the sanctioned party was a corporation, the acts of its sales force naturally represent the acts of the corporation. Therefore, the sanctioned party shall not be exempted from the liability by claiming that the sales representatives were acting on their own. Even assuming that it was true in the sanctioned party's statement that it had more than once admonished its salespeople not to produce such misleading information, the fact that the act of name association still occurred in the wake of the complainant having sent the postal attestation letters attested to the sanctioned party' failure to effectively rectify or prohibit the unlawful acts. To the sanctioned party was still guilty of failing to properly supervise its sales force and shall be held accountable for what its salespeople have done.
In summary, the sanctioned party's act of associating itself with another was found to be deceptive and its means of competition patently unfair, thus constituting a violation Article 24 of the Fair Trade Law. The sanctioned party, as a result, shall be sanctioned pursuant to the provisions in the first section of Article 41 of the same Law.
Summarized by Tu, Hsing-feng
Supervised by Pai, Yu-chuang
Appendix:
GCI Marketing (Taiwan) LTD.'s Uniform Invoice No. 96973348
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