Hsi Chi Enterprise Co., Ltd. did not immediately give the “stub copy for client” of signed “Purchase Agreement” to some of its consumers, an obviously unfair act that is sufficient to affect trading order

Chinese Taipei

Case:

Key Words:

Agreement, trial period

Reference:

Fair Trade Commission Decision of January 19, 2006 (the 741st Commissioners’ Meeting); Disposition Kung Ch’u Tzu No. 095004

Industry:

Book Publishers (8430)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. The complainant in this case indicated that at the time of selling language learning teaching materials, Hsi Chi Enterprises Co., Ltd. (hereinafter referred to as Hsi Chi) has first explained the products and member services, then expressed that the products were offered for trial. After that, the consumers were instructed to put their signatures on “Purchase Agreement” for the said products. Upon signing, Hsi Chi Company for the reason of submitting the agreements to offices for verification had taken back the signed agreements immediately without giving consumers the stub copies. The copies were mailed to the consumers several days later.
2. Upon investigation, the Fair Trade Commission (FTC) found that Hsi Chi Company has mainly invited consumers visiting the company through lucky draws, questionnaires, exhibitions, online promotion and holding activities together with the suppliers. When consumers visited the company, Hsi Chi Company gave them more explanations on the products, member services, the English learning environment and activities provided by the company. Hsi Chi would give detailed explanations on products’ characteristics, activities and services descriptions, contents of “Purchase Agreement” and member handbook when consumers were interested in purchasing the products. Hsi Chi collected deposits from consumers after they had gone through and signed the agreements. Upon signing the “Purchase Agreement”, Hsi Chi gave consumers the forth copies of “stub copy for client” (not affixed with the Company’s seal). The remaining three copies were delivered to the Company’s office for verification. After verification of consumers’ credit records and contents of agreements, the third copies of “copy for client’s file” that affixed with the seals of company and its responsible person were mailed to consumers. The FTC conducted a sampling survey of consumers that had signed agreements with Hsi Chi, and discovered that 30.3 % of the samples indicated that Hsi Chi neither gave them “stub copy for client” nor “copy for client’s file ” immediately after they signed “Purchase Agreement”. The Company mailed them the said duplicate copies several days later (only one consumer indicated that he/she had never received the duplicate copy). The remaining 69.7% surveyed consumers indicated that Hsi Chi immediately gave them the duplicate copies of “Purchase Agreement” after signing.
3. Grounds of Disposition:
1. Hsi Chi first showed the “Purchase Agreement” to consumers, then collected deposits and gave the forth copies of “stub copy for client” that were not affixed with the seals of the company and responsible person to consumers after they went through and signed the agreements. Hsi Chi took back the remaining three copies and verified consumers’ credit records through telephone. If the said agreements were accepted and processed, Hsi Chi, then mailed the third copies of “copy for client’s file” that affixed with the seals of company and its responsible person to consumers. However, the complainant and the party involved, Mr. A expressed that Hsi Chi took back the “Purchase Agreement” immediately after he signed it without giving him any duplicate copy. Furthermore, the results of sampling survey showed that 30.3% of surveyed consumers answered that Hsi Chi neither gave them “copy for client’s file” nor “stub copy for client” immediately after they signed “Purchase Agreement”; the Company mailed them the said duplicate copies several days later. Because Hsi Chi did not immediately give its consumers the “stub copy for client” after they signed the “Purchase Agreement”, the consumers were unable to verify the content of agreements, in addition to this; they also had difficulties and hindrances in exercising their rights. Furthermore, the consumers were unable to exercise their rights of agreement cancellation as early as possible due to not having the agreements and thus unable to find out the seven days trial period stipulated in the agreement. Hsi Chi took advantage of its dominant position in trading and the relative weaker position of consumers in trading to carry out obviously unfair conduct that is sufficient to affect trading order. Such conduct has violated the provision of Article 24 of the Fair Trade Law.
2. Taken into consideration the motivation, purpose and expected improper benefit of the unlawful acts of Hsi Chi; the degree and duration of the act’s harm to market order; benefits derived on account of the unlawful act; scale, operating condition and market position of the enterprise; past violations; remorse shown for the act and attitude of cooperation in the investigation, therefore, Hsi Chi is ordered to cease the unlawful acts immediately and a fine of NT$ 1,850,000 is imposed.

Summarized by Yang, Chung-Lin;
Supervised by Chen, Yuhn-Shan

Appendix:
Hsi Chi Enterprises Co., Ltd.’s Uniform Invoice Number: 23931759