The Taiwan branch of Holiday Marketing International Co., Ltd. violated the Fair Trade Law for selling membership for holiday villas
Chinese Taipei
Case:
The Taiwan branch of Holiday Marketing International Co., Ltd. violated the Fair Trade Law for selling membership for holiday villas
Key Words:
deception, obviously unfair, harassment
Reference:
Fair Trade Commission Decision of March 14, 1997 ( the 281st Commission Meeting), Letter (86) Kung Yi Tzu No. 8512461-007
Industry:
Other Consulting Service Industry (7409)
Relevant Laws:
Summary:
1. During November and December of 1996, the Commission received complaints against Holiday Market International Co., Ltd. ("HMI"), which had notified the complainants by telephone that they had won prizes - a tour with free board and lodging which could be obtained only after the prize winners attend a 90-minute tour seminar. During the seminar, a videotape was played, followed by sales representatives one-on-one reception of the participants. After four to five hours of intensive and forceful sales pitch, the consumers were persuaded to sign the agreement for holiday villa membership on the spot. However, the consumers subsequently reviewed the agreement and identified several unconscionable clauses. Therefore, they asked the HMI for rescission of the agreement and refund.
2. The Commission has the following opinions:
(1) HMI induced the consumers, by promising distribution of prizes, to attend its seminars without informing them that such seminars were organized to promote membership of the holiday villas, and, in doing so, HMI created false expectation on the part of the consumers in violation of Article 24 of the Fair Trade Law, which prohibits enterprises to conduct deceptive or obviously unfair acts that are sufficient to affect trading order.
(2) After attending the seminars, HMI made forceful, one-on-one sales pitches, sometimes lasting over five hours, a move that could cause the consumers to rashly sign the agreement out of fatigue and on impulse. This indicates that the freedom of the consumer to decide whether to trade or not was hampered.
(3) Judging from the fact that a large number of consumers signed the agreement before the seminars were over and that such consumers requested rescission of the agreement after their subsequent review of the agreement, HMI failed to provide opportunity to enable the consumers to fully review the agreement and understand their rights and obligations thereunder.
3. The 281st Commission Meeting on March 14, 1997, decided that HMI has violated Article 24 of the Fair Trade Law for its obviously unfair act of selling, by deceptive means, membership of the holiday villas by first inducing the consumer to collect prizes and then engaging in promotion through harassment without allowing the consumer an adequate contract review period, and that HMI shall desist from such sales act in accordance with Article 41 of the Fair Trade Law.
Summarized by Lin, Huei-yun
Supervised by Hu, Kuang-yu
＠: For information of translation, click here
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