In 2017, amendments ("Amendments") to the Act on Specified Commercial Transactions ("ASCT") promulgated on 3 June 2016 will come into force to expand consumer protection measures.
The Amendments prohibit directors and other executives from operating the same businesses that are subject to administrative suspension orders by resorting to the incorporation or establishment of new companies, and now provide criminal sanctions for violations of this prohibition. Sanctions include a fine of up to 300 million Yen on the erring company, and imprisonment of up to 3 years and/or a fine of up to 3 million Yen on the erring individual. The Amendments also increase the maximum duration of the business suspension orders to 2 years from the current 1 year limitation.
Internet-based transactions fall into the definition of "mail-order sales" which is one of the regulated business forms under the "Specified Commercial Transactions" in the ASCT, and as a result, website operators are subject to the application of the regulations under the ASCT.
In the context of telemarketing sales which are also regulated under "Specified Commercial Transactions" in the ASCT, the Amendments now allow a consumer to withdraw or cancel his purchases that are beyond necessary for a given household, unless the consumer would have a special cause to require such "excessive" quantities. The Amendments also extend the consumer's period to cancel purchases to 1 year (currently 6 months) from the date of purchase.
Relevant business operators should watch out for the enforcement schedule of the Amendments.