Qun-Yi-Xin Co., Ltd.

Case:

Key Words:

loan acquisition, false and untrue advertising, DBR22

Reference:

Fair Trade Commission Decision of October 5, 2011 (the 1039th Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 100179

Industry:

Wholesale of Motor Vehicles and Motorcycles and Related Parts and Accessories (4651~4653)

Relevant Laws:

Article 21(3) applies mutatis mutandis to Article 21 of the Fair Trade Law

Summary:

1. The FTC received from the Banking Bureau of the Financial Supervisory Commission (hereinafter referred to as the FSC), Executive Yuan a letter stating that the wording of"special loan acquisition packages: for people with debts more than 22 times of their average monthly income and the DBR22 regulation not to be taken into account" in the advertisement posted by Qun-Yi-Xin Co., Ltd. on its website was in violation of Article 21 of the Fair Trade Law.
2. Findings of the FTC after investigation:
   (1) The investigation revealed that Mr. Huang, an employee of Qun-Yi-Xin Co., Ltd. (hereinafter referred to as QYX) responsible for business development, had set up the website in the name of Qun Yi (transliteration) Financial Management Marketing Co., Ltd. (not officially registered) and posted the said advertisement as a result of the company's intention to extend its business operations to loan acquisition.
   (2) QYX argued that according to the FSC's regulation, unsecured debt owed to banks, or the overall account balance of a credit loan, could not exceed 22 times of the applicant's average monthly income in the most recent year (hereinafter referred to as DBR22). In other words, if a loan seeker applied to a bank for a credit loan, or unsecured debt, the aforesaid regulation would make it impossible for the applicant to acquire a loan any more than DBR22. However, QYX could assist loan seekers to acquire secured loans, such as the borrower provides a car, real estate, or other property as collateral to get a loan from a pawn shop or bank and the FSC's DBR22 regulation would not be applicable. That was what"other special packages" in the said advertisement referred to.
3. Grounds for disposition:
   (1) In the said advertisement, QYX claimed to be"offering various financial planning and credit loan services,""special loan acquisition packages: for people with debts more than 22 times of their average monthly income and the DBR22 regulation not to be taken into account," and, at the bottom of the page,"credit loan interest rates range between 1.68% and 20%. Banks consider military personnel, civil servants, teachers, and employees of listed companies' top candidates…,""each bank offers various products for different clienteles…,""bank loan actuary…" The overall wording in the advertisement gave consumers the impression that there were special ways to bypass the FSC's DBR22 regulation and acquire credit loans from banks through the loan acquisition service provided by QYX. The advertisement apparently could thus induce certain recognition in the general public or interested parties and make their trading decisions accordingly.
   (2) QYX argued that the wording of"special loan acquisition packages: for people with debts more than 22 times of their average monthly income and the DBR22 regulation not to be taken into account" referred to acquisition of loans from banks or legally registered pawn shops for borrowers who could provide cars, real estate or other property as collateral. However, the company admitted that the FSC's DBR22 regulation made it impossible to acquire loans more than 22 times of a borrower's average monthly income and there was no record indicating the company had ever succeeded in acquiring credit loans more than DBR22. In addition, in Yin-Ju (Piao) Document No. 10000148171 dated May 16, 2011, the FSC expressed from its professional standpoint that"according to the DBR22 regulation, the advertisement in question was apparently false and untrue and could easily make consumers believe that it would be more advantageous to seek loans through the advertiser than by applying for loans on their own. In consequence, people would have the burden of paying for the service. The advertisement was obviously misleading the public." The information presented through the advertisement was incongruous with the reality. The difference could lead to wrongful understandings or decisions and was unacceptable to the general public or interested parties. It was a false, untrue and misleading representation in violation of Paragraph 3, Article 21 of the Fair Trade Law and Paragraph 1 of the same article could apply mutatis mutandis.
   (3) Combining the above and assessing the level and duration of the impact of the illegal conduct of QYX on trading order on the market, the FTC acted according to the first section of Article 41 of the Commission ordered QYX to immediately cease the unlawful act, and imposed an administrative fine of NT$50,000 on the company for the violation of Paragraph 3, Article 21 of the Fair Trade Law where Paragraph 1 of the same article applied mutatis mutandis.

Appendix:
Qun-Yi-Xin Co., Ltd.'s Uniform Invoice Number: 53376146

Summarized by Lin, Fu-Hao; Supervised by Chi, Hsueh-Li