Business Start-up Consulting Co., Ltd.

Case:

Key Words:

false or misleading representations in advertising, successful example

Reference:

Fair Trade Commission Decision of September 8, 2010 (the 983rd Commission Meeting), Disposition Kung Ch'u Tzu No. 099090

Industry:

Management Consultancy Services (7020)

Relevant Laws:

Article 21 of the Fair Trade Law

Summary:

1. Business Start-up Consultancy Co., Ltd. (hereinafter referred to as BSC) posted a number of false and untrue advertisements to show successful examples of loan acquisition.
2. Findings of the FTC after investigation: BSC claimed in its business start-up loan advertisements that "we can customize according to your situation and help you acquire the ‘Business Start-up Loan for Young Entrepreneurs' or the ‘Micro-business Start-up Phoenix Loan'". The company also gave 11 successful examples of loan acquisition that were supposed to be cases it had helped process. However, the replies from the National Youth Commission and the Council of Labor Affairs, the competent authorities for the said two loans, to the FTC's inquiries revealed that three of the aforementioned 11 loans had not been approved. This was apparently inconsistent with the claim of BSC in the advertisements.
3. Grounds for disposition: Enterprises sometimes use real people and cases as proof of successful examples to increase the confidence of consumers in the quality of the product or service in concern in order to gain business. Therefore, an enterprise doing so is required to ensure the contents of the examples given are true. The 11 advertisements BSC posted gave the impression that they were genuine cases in which the applicants were able to acquire loans under the assistance of the company. However, as the applicants in some of cases advertised never got the approval of the competent authority for the loan, the advertisements could generate in trading counterparts wrong recognition or confidence with regard to the quality of the service and thus affect their trading decision. The conduct was a false, untrue and misleading representation in violation of Article 21 (1) of the Fair Trade Law (FTL). The FTC therefore applied the First Section of Article 41 of the FTL and ordered BSC to immediately cease the unlawful act and imposed on the company an administrative fine of NT$80,000.

Appendix：
Business Start-up Consultancy Co., Ltd.'s Uniform Invoice Number: 28468147

Summarized by: Yu,Yi-Fong; Supervised by: Chen,Chun-Ting