A complaint is filed against First International Telecom Co. for not disclosing the important trading information of its “Chi Nien Hao Chi 0 Plan” , violat ing the Fair Trade Law

Chinese Taipei

Case:

A complaint is filed against First International Telecom Co. for not disclosing the important trading information of its “Chi Nien Hao Chi 0 Plan” , violat ing the Fair Trade Law

Key Words:

Telecommunication service, Disclosure of important trading information, Deceptive, Obviously unfair

Reference:

Fair Trade Commission Decision of August 18, 2005 (the 719th Commissioners' Meeting), Letter Kung Yi Tzu No. 0940007303

Industry:

Telecommunications (6000)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. The case originated from a letter by a member of the general public, stating that Mr. Wu, the person concerned in this case had applied for mobile phone services by First International Telecom Co. (hereinafter referred to as First International) at the end of 2002. At that time, there was a sales promotion of no set- up fees, no deposit, no monthly rental and a premium of NT$100 discount per month for calls made within the same network for four years. On February 22, 2005, Mr. Wu delivered his cellular phone to First International’s Taichung Hsian Shang branch for a repair and the sales woman at the branch introduced “J98 cellular phone promotion plan” to him. At the same time, Mr. Wu specifically inquired whether the original premium from the previous plan would be affected if he switched to the new plan. The sales woman told him clearly that the original premium would not be affected and he thus made an application for the J98 cellular phone plan. However, Mr. Wu discovered later in the telephone bill received that there was no NT$100 discount for calls made within the same network. And hence, he contacted First International and found out the new plan of NT$299 discount for telephone charges was made in the order such that NT$299 shall be deducted first (regardless of calls made within the same network or off-net calls, including charges on local calls and domestic messengers service), the NT$100 discount for calls made within the same network from the original premium plan shall only be deducted from the telephone bill when the total charges is more than NT$299. However, the content of the poster and the standard contract did not indicate that the said program has the order of deduction items for the monthly service charges. Therefore, the program failed to disclose important trading information and violated Article 24 of the Fair Trade Law.
2. Th is Commission undertook an investigation and presented the findings in the 719th Commissioners' Meeting convened on August 18, 2005 for a decision. According to the available evidences, it is still difficult to conclude that there is a violation of the Fair Trade Law. This Commission made the aforementioned decision based on the following reasons:
1. The “Chi Nien Hao Chi 0 Plan” at issue has already disclosed the following messages in its advertisements on the media: “The user that participates in this plan will get a free J98 cellular phone, does not have to pay set- up fee or deposit, and only have to pay monthly service charge of NT$299 for two years (the monthly service charge can be used to offset domestic calls charges).” “Domestic calls charges: include calls made within the same network, off-net calls, local/long distance calls, value added voice service, and domestic messenger service.” In addition, the investigation found that the contract for the plan at issue used easily understood language to print important trading information such as terms and conditions on termination of the rental service, duration of contract, indemnity clause for terminating contract before its expiration and details of premiums in larger and bold font at a visible part of the contract. Also, the consumer was requested to sign the contract. Therefore, First International did not conceal important information on the marketing and advertisement of the plan at issue, and thus did not have any deceptive or obviously unfair conduct sufficient to affect trading order.
2. Next, it is found that the controversy of this complaint ar ose due to that Mr. Wu and the sales woman of First International ha d different opinions on “the order of deduction for telecommunication charges premium” . However, the fifth article of contract for the plan at issue has clearly stipulated: “The premium for this plan cannot be used together with other premium plans.” Mr. Wu signed the contract. Finally, it is found that a total of 68,454 users have used the plan at issue launched by First International, but only one user made objection to the order of deduction for telecommunication charges. Moreover, in order to settle the dispute, First International has given the user a plan that is most favorable to the said user. Therefore, this complaint is an individual dispute due to the parties’ different opinions on “the order of deduction for telecommunication charges premium” at the time of signing contract and did not impede the market’s trading order.
3. With regard to the calculation of indemnity when a user terminates contract before its expiration, First International pointed in the plea that the amount of indemnity was calculated on the basis of compensation for cellular phone and also the loss of monthly service charges that were compensated for domestic calls charges incurred by First International during the validation of the plan. Furthermore, the breach penalty was calculated at declining balance method. First International has fully disclosed the indemnity article in the agreement and the method of calculation is still reasonable.
4. To sum up, First International Telecom Co., the respondent in this case, did not conceal important trading information when organized the “Chi Nien Hao Chi 0 Plan” and thus there is no incident of trading order being affected. Therefore, it may not be concluded that First International has violated the provision of Article 24 of the Fair Trade Law.

Summarized by Tsai, Hui-Chi;
Supervised by Hou, Vn Hsien

Appendix:

First International Telecom Co.’s Uniform Invoice Number: 16080042