Vigan Construction Co., Ltd.

Case:

Vigan Construction Co., Ltd. violated the Fair Trade Law by posting false and untrue advertisement for its "Love with Sky River" housing project

Key Word(s):

Real estate advertisement, last chance

Reference:

Fair Trade Commission Decision of June 26, 2013 (the 1129th Commissioners' Meeting); Kung Ch'u Tzu Disposition No. 102086

Industry:

Real Estate Development Activities (6700)

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

1. When marketing its "Love with Sky River" housing project, Vigan Construction Co., Ltd. (hereinafter referred to as the offender) posted advertisements in newspaper claiming "3 final units for first time home buyers, your last chance" which gave the impression that the housing project had been selling very well and only a limited number of units were left. It was meant to increase the interest of consumers in checking out the units so that they would make their purchase decisions in haste. To find out whether the claim of sales was true or if it had been a dishonest marketing approach by the builder or marketer, the FTC initiated an ex officio investigation.
2. Findings of the FTC after investigation:
   

   The said advertisements were posted between March 9 and 24, 2013. The investigation showed that there were 9 units left when the offender posted its first advertisement on March 9. Apparently, it was inconsistent with the claim of "3 final units for first time home buyers, your last chance." The offender contested that the claim had been referring to its plan that 3 units were reserved for people buying homes for the first time and not that only 3 units had been left in its project. In addition, it argued that negotiations for the other 6 units had been in progress. However, there was not any offer letter or deposit paid for the said 6 units. The only thing the offender could prove was that a party interested in its units had reserved one (D2) of the 6 units and eventually signed the contract with the offender on March 9. Even if the statement by the offender had been true, there were still another 5 units available. Moreover, when the offender presented its statement at the FTC on May 24, there were still 7 units unsold.

3. Grounds for disposition:
   

   Despite the claim of "3 final units for first time home buyers" in the advertisements posted by the offender, there were still 7 units unsold when the offender presented its statement at the FTC on May 24, 2013. Obviously, the claim had been inconsistent with the fact and the understanding of consumers after seeing the advertisements. This inconsistency could have easily led to wrong perceptions of potential buyers and increased the interest of consumers in checking out the units and they could have made their decisions in haste. The offender's false, untrue and misleading representation with regard to the quantity of product and the resulted unfair competition against its competitors had violated Article 21(1) of the Fair Trade Law. Acting according to the first section of Article 41(1) of the same law, the FTC ordered the company to cease its unlawful act and also imposed on it an administrative fine of NT$100,000.

Appendix:
Vigan Construction Co., Ltd.'s Uniform Invoice Number: 12751060

Summarized by Wu, Jia-Lin; Supervised by Chen, Chun-Ting