Complaint filed against Happy Holidays International Co., Ltd. for violating the Fair Trade Law in its sale of membership cards for overseas vacation resort

Chinese Taipei

Case:

Key Words:

Overseas vacation resort, membership cards, contract review

Reference:

Fair Trade Commission Decision of February 16, 2006 (the 745th Commissioners’ Meeting); Disposition Kung Ch’u Tzu No. 095015

Industry:

International and General Tourist Hotel (5011)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. The Fair Trade Commission (FTC) received three complaints against Happy Holidays International Co., Ltd (hereinafter referred to as Happy Holiday), indicating that Happy Holidays has collected the public’s information through conducting questionnaires at the streets first. After that, Happy Holidays notified the public by telephone that the questionnaires filled by them have been drawn out from a lottery draw, and they will receive accommodation premium or a free overseas tour. Upon receiving the calls, the public thus has gone to attend a prearranged seminar, only then they found out the seminar was a membership cards promotion for an overseas vacation resort. Furthermore, Happy Holidays had requested the public to pay deposits before the public read through the contract. This might constitute an act of violating the Fair Trade Law.
2. Upon investigation, the FTC found that Happy Holidays alluded to the complainants that they have won prizes or lucky draws in telephone calls, and invited them to attend a seminar, without disclosing the purpose of selling membership cards. Consequently, the consumers had attended the said promotion without any prior knowledge of anticipated trading. Next, the Thailand QVC vacation resort of which Happy Holidays is the sales agent for its memberships is located at overseas and managed by the foreign enterprise. Therefore, the consumers were at positions of asymmetrical trading information with regard to the profile of the said vacation resort and the content of membership rights. Under this situation, the consumers became more disadvantageous in trading if the seller still requested them to pay deposits before they can read the contracts. Even though Happy Holidays argued that it had not carried out the aforementioned conducts, but admitted that it had first collected reservation fees from consumers that intended to become the advertisement spokespersons at the seminar. Then, the consumers were brought to another room to go through the agreements after they have filled in membership application forms. In addition, Happy Holidays had alleged that the consumers could enjoy the preferential prices of advertisement spokespersons on the day becoming members, and the collection of reservation fees in advance were to ensure that the consumers were qualified for the member discounts, and thus such fees in essence were tantamount to deposits. Moreover, the investigation found that Happy Holidays had frequently given long hours of seminar to make consumers became exhausted and then promoted the sales of membership cards. The fact of requesting consumers to pay deposits before they were allowed to read agreements was verified. To sum up, Happy Holidays had intentionally solicited consumers that did not have prior knowledge of anticipated trading to attend its sales activities, and then given them long hours of speeches. Happy Holidays abused its dominant position in trading information and requested its consumers to pay deposits in advance before they can read agreements. Happy Holidays had used these improper means of selling overseas vacation resort’s membership cards, causing its trading counterparts to make trading decision under the situation of information non-transparency. Such conducts were obviously unfair and sufficient to affect trading order and thus has violated the provision of Article 24 of the Fair Trade Law.
3. Taken into consideration the motivation, purpose and expected improper benefit of the unlawful acts of Happy Holidays; the degree and duration of the act’s harm to market order; benefits derived on account of the unlawful act; scale, operating condition, sales volume and market position of the enterprise; whether or not the type of unlawful act involved in the violation has been the subject of correction or warning by the Central Competent Authority; types of, number of, and intervening time between past violations, and the punishment for such violations; remorse shown for the act and attitude of cooperation in the investigation, and other factors, therefore, Happy Holidays is ordered to cease the unlawful acts and a fine of NT$ 3,000,000 is imposed according to the anterior paragraph of Article 41 of the Fair Trade Law.

Summarized by Tseng, Chiu-Chen;
Supervised by Tai, Pei-Yi

Appendix:
Happy Holidays International Co., Ltd.’s Uniform Invoice Number: 70380382