The Great Taipei Gas Line Safety Inspection Corp. violates the Fair Trade Lay by using improper sales methods to sell its natural gas shut-off devices

Case:

The Great Taipei Gas Line Safety Inspection Corp. violates the Fair Trade Lay by using improper sales methods to sell its natural gas shut-off devices

Key Words:

natural gas shut-off device, improper sales practices

Reference:

Fair Trade Commission Decision of April 1, 2004 (the 647th Commissioners’ Meeting); Disposition Kung Ch’u Tzu No. 093036

Industry:

Gas Supply (3400)

Relevant Laws:

Article 24 of the Fair Trade Law

1. This case was initiated based on complaints from members of the public alleging that the Great Taipei Gas Line Safety Inspection Corp. (hereinafter called “the respondent”) distributed notifications of gas safety inspections and then dispatched employees to conduct said safety inspections under the guise of employees of the Great Taipei Gas Corp. and use coercive tactics to install its natural gas shut-off devices. When the unwitting customers later requested that the devices be removed and their money returned, they were ignored. The acts were alleged to constitute a violation of the provisions of Article 24 of the Fair Trade Law (FTL).
2. Findings of the Fair Trade Commission (FTC) after investigation:
   1. Invoices used by the respondent were imprinted only with “The Great Taipei Gas Line Equipment Invoice,” while the company’s actual full name was simply stamped on the invoice in smaller, less legible script and furthermore disclosed no basic information about the seller. The overall effect of these actions was sufficient to cause ordinary consumers to mistakenly identify the respondent as part of the same business entity as the jurisdiction’s sole provider of piped-in natural gas – the Great Taipei Gas Corp. The respondent’s intent to mislead gas consumers was obvious.
   2. The service notifications disseminated by the respondent clearly sought to goad residents into arranging a time for an inspection of their gas lines under the pretense of routine safety maintenance and inspection. The notice further appealed for cooperation and requested that those who could not be available for the inspection contact the company and arrange an alternative time for the inspection. This act was sufficient to cause residents to misidentify the respondent’s personnel as having been sent by the Great Taipei Gas Corp. rather than being just ordinary door-to-door salespersons. In any event, the respondent, appearing before the FTC, candidly admitted arranging the times and dispatching personnel to call on clients and conduct gas line safety inspections and provide installation services for those clients deemed in need. This proved that the respondent’s personnel were entering gas client’s homes under the pretense of conducting safety inspections yet in fact engaging in sales by means of sales pitches disguised as bogus safety inspections. What was in reality a sales pitch for natural gas safety equipment was presented as a safety inspection service to residents.
3. Grounds for disposition:
   The respondent is in the business of selling natural gas safety equipment, a different type of business operation from the actual supply of piped-in natural gas. However, the respondent intentionally adopts a company name that is extremely similar to that of the piped-in natural gas supplier to Taipei, the Great Taipei Gas Corp. Furthermore, their sales methods involved going door-to-door a day after distributing gas safety inspection notifications. The forms used when conducting the actual “gas line safety inspection service” were imprinted with the words “Notification of the Great Taipei Gas Line Safety Inspection Service” and went so far as to note that consumers should insist on examining the work ID of the employees conducting the inspections to avoid potential problems. The respondent clearly sought to pass off the established piped-in gas supplier in the jurisdiction and the overall effect of the respondent’s marketing techniques was sufficient to cause ordinary consumers to misidentify the respondent as part of the same operational entity as the area’s sole natural gas supplier. During the course of its sales, the respondent was consistently unwilling to reveal its actual purpose, which was to promote the sales of gas shut-off devices, and it exploited of the average consumer's trust in the gas utility company to secure the unsuspecting cooperation of residents, only later to install equipment and collect fees. The respondent’s intentionally misleading methods are obvious and the deceptive practices are sufficient to adversely affect the trading order in violation of the provisions of Article 24 of the FTL. In accordance with the provisions of the fore part of Article 41 of the FTL, the FTC ordered the respondent to cease the deceptive practices and, after weighing the motive, purpose, duration, improper gains, business scale, degree of harm to the trading order, and other relevant factors, imposed an administrative fine of New Taiwan Dollars (NT$)100,000.

Appendix:
Great Taipei Gas Line Safety Inspection Corp.’s Uniform Invoice Number: 80161077

Summarized by Yang, Chia-Hsien; Supervised by Tso, Tien-Liang