Japan Act on Specified Commercial Transactions (ASCT) - Digital Services

Articles 3-10 (Door-to-Door Sales) and Articles 16-25 (Telemarketing Sales) of the Japan ASCT regulate two of the most fraud-prone transaction categories. Both share 8-day cooling-off + strict documentation + identification requirements. (1) Article 3 Door-to-Door Sales - Identification Requirements: (a) seller must immediately identify himself/herself + business name + purpose + product before solicitation; (b) failure to identify is offence + voids contract; (c) carry written ID + business license. (2) Article 3-2 Solicitation Refusal Notification (RE-INFORCED): (a) if consumer refuses solicitation, seller must IMMEDIATELY LEAVE + cannot return; (b) recent amendments + CAA guidance - 'do not solicit' notice on door (e.g. sticker) is legally binding refusal; (c) repeated visits despite refusal - administrative penalty + criminal liability. (3) Article 4 Pre-Contract Document: (a) before

• Identification + Article 3/16 + records + per call/visit + per agent + script audit
• Pre-contract document + Article 4/18 + red 8-pt cooling-off + records + per consumer
• Contract document + Article 5/19 + records + per contract + signing audit
• Cooling-off + Article 9/24 + 8-day + records + per cancellation + refund within 30 days
• Solicitation refusal + Article 3-2/17 + records + per refusal + DNC List

• Identification informal (Article 3 violation)
• Pre-contract document missing red font cooling-off explanation
• Contract document delivery delayed (cooling-off extension)
• Cooling-off refunds delayed beyond reasonable period
• Refused consumers re-contacted (Article 3-2/17 violations)

Articles 11 through 15-2 of the Japan ASCT regulate Mail-Order Sales (Tsushinhanbai 通信販売) which includes ALL Internet/e-commerce sales + catalog mail + TV shopping + magazine ads. The 2023 Digital Services Amendment significantly enhanced requirements for internet subscription + dark pattern prohibition + final order confirmation. (1) Article 11 Advertisement Disclosure: (a) seller name + representative + address + phone + email; (b) sale price + delivery + handling fees; (c) payment method + timing; (d) delivery method + timing; (e) return/refund policy + costs; (f) APPI personal information notice; (g) subscription terms + duration + renewal + cancellation; (h) cooling-off availability or non-availability; (i) for digital content - device requirements + format + technical limitations. (2) Article 12 Prohibition of False/Misleading Representation: (a) prohibition on materially false adv

• Article 11 disclosure + records + per listing + per channel + per language
• Article 13 final order screen + records + per purchase + UI screenshots audit-ready
• Article 14 cancellation parity + records + per subscription + UX testing
• Article 12-2 email compliance + records + per campaign + opt-out percentage
• Article 15-4 cooling-off + records + per refund + per ground + 30-day processing

• Advertisement disclosure scattered (no single Article 11 statement)
• Final order screen lacks total/subscription/cancellation
• Cancellation requires phone call only (not parity)
• Email opt-out broken or buried
• Cooling-off refused incorrectly (no Article 15-4 awareness)

Articles 33 through 40-3 of the Japan ASCT regulate Multilevel Marketing Transactions (Rendoshikihanbai Torihiki 連鎖販売取引) including MLM + Network Marketing + Direct Selling with downline compensation structures. Japan has one of the world's strictest MLM regulatory regimes. (1) Article 33 Definition + Scope: (a) sales of goods/services to consumers with promise of commissions from recruiting other consumers; (b) tier-based compensation structure; (c) emphasis on recruitment over product sales triggers scrutiny; (d) distinguished from legitimate direct sales by recruit-based income. (2) Article 33-2 Distinction from Pyramid Scheme (Mugen Renkan Kou 無限連鎖講 - prohibited per Pyramid Scheme Prevention Act 1978): (a) MLM with REAL PRODUCT + INCOME FROM PRODUCT SALES = legal under ASCT; (b) PYRAMID with NO REAL PRODUCT + INCOME FROM RECRUITMENT FEES ONLY = prohibited + criminal; (c) Test - is inc

• Article 34 pre-recruitment + records + per recruit + audit trail + version
• Income data + median/range + records + per disclosure + actual vs claimed
• 20-day cooling-off + Article 40 + records + per distributor + refund
• Inventory buyback + Article 40-2 + 1-year + 90% + records + per distributor
• Pyramid test + product income > 50% + records + annual + financial analysis

• Income disclosure overstated (success stories presented as typical)
• 20-day cooling-off ignored or made difficult
• Inventory buyback refused (Article 40-2 violation)
• Pyramid test failed (product income < 50%)
• Aggressive recruitment of vulnerable populations

Articles 70-76 of the Japan ASCT establish the comprehensive penalty + enforcement framework administered by the Consumer Affairs Agency (CAA) + with civil enforcement by Qualified Consumer Organizations + Police involvement for criminal cases. (1) Article 70 False Representation - Most Severe Criminal Offence: (a) materially false statements; (b) misleading representations re price + quantity + cancellation + cooling-off; (c) up to JPY 3 MILLION FINE + 3 YEARS IMPRISONMENT; (d) corporation dual liability + up to JPY 100M; (e) repeat offence aggravated; (f) deceit + intent enhanced punishment. (2) Article 71 Telemarketing Violations: (a) failure to identify; (b) prohibited solicitation; (c) up to JPY 1 MILLION + 1 YEAR; (d) corporate dual liability. (3) Article 72 Email/SMS/Direct Mail Excessive Advertising: (a) post-2002 amendment + 2008 expansion; (b) up to JPY 1 MILLION; (c) covers sp

• Internal compliance + records + per quarter + Board reporting
• CAA guidance monitoring + records + per update + audit trail
• Penalty risk + per article + records + per processing + quantified
• Director/officer liability + Article 75 + D and O records + Board awareness
• Qualified Consumer Org engagement + records + per inquiry + response

• Internal compliance program absent (reactive only)
• CAA guidance unfollowed (Stealth Marketing missed)
• Penalty risk unquantified (Board unaware)
• Director liability not in D and O coverage
• Qualified Consumer Org inquiries ignored

Platform Operators (e-commerce marketplaces + classified ad platforms + auction sites + matchmaking platforms) face specific ASCT obligations beyond seller-level requirements + a complex cross-cutting compliance regime intersecting multiple Japanese statutes. (1) Platform Operator Definition: (a) e-commerce marketplaces (Amazon Japan + Rakuten Ichiba + Yahoo! Shopping + Mercari + ZOZO + Qoo10); (b) classified ad platforms (Jimoty + Mercari) (c) auction sites (Yahoo! Auctions); (d) matchmaking platforms (Pairs + Omiai); (e) subscription aggregators; (f) B2B platforms (Alibaba Japan + Lansa). (2) Platform Operator Specific Obligations per 2021 + 2023 Amendments: (a) Seller Verification - business registration check + tax ID + bank account verification before listing; (b) Listing Content Moderation - prohibited items + price accuracy + warranty terms; (c) Suspect Activity Reporting to CAA;

• Platform operator obligations + Article 14-2 + records + per listing + seller verification
• Seller verification + KYB + business registration + records + per onboarding
• Suspect listing removal + 24-48hr SLA + records + per CAA notice + remediation
• Cross-statute integration + APPI/Anti-Spam/AML + records + per process + audit
• Industry self-regulation + JADMA/JIAA + records + compliance with codes

• Platform operator absent verification (sellers unchecked)
• Suspect listing slow removal (CAA escalation)
• APPI not integrated with ASCT (data flow disconnected)
• Anti-spam compliance separate (Article 12-2 violations)
• Industry self-regulation ignored (best practice gap)

The Japan Act on Specified Commercial Transactions (Tokutei Shotorihiki ni kansuru Horitsu 特定商取引に関する法律) is Act No. 57 of 4 June 1976 (Showa 51 Act No. 57) administered by the Consumer Affairs Agency (CAA 消費者庁) as Japan's foundational consumer protection statute covering specified commercial transaction types. The Act has been amended multiple times including the major Digital Services Amendments effective 1 June 2023 (令和5年改正) introducing specific online subscription + dark pattern + cooling-off period requirements for internet transactions. (1) Six Specified Transaction Types per ASCT Chapter II + III + IV + V + V-2 + VI: (a) Door-to-Door Sales (Houmonhanbai 訪問販売) Chapter II Section 2 - Articles 3-10 - sales conducted at consumer location away from seller's premises; (b) Mail-Order Sales (Tsushinhanbai 通信販売) Chapter II Section 3 - Articles 11-15-4 - includes ALL ONLINE/INTERNET SALES + c

• Transaction type classification + per business + records + per channel/product
• CAA reporting + cooperation + records + per engagement + Improvement Orders
• 2023 Digital Services Amendment + records + per e-commerce + UI/UX compliance
• Cooling-off implementation + per type 8/20 day + records + per transaction
• Mandatory disclosure + Articles 11/13/15-2 + records + per sale + per channel

• Transaction type misclassified (Internet sale treated as in-store)
• CAA cooperation absent (responses delayed)
• 2023 Amendment not implemented (UI dark patterns persist)
• Cooling-off ignored (8/20 day misapplied or absent)
• Mandatory disclosures missing or incomplete

Articles 41 through 50 of the Japan ASCT regulate Specified Continuous Service Transactions (Tokutei Keizokutekiekimu 特定継続的役務提供) - long-term service contracts where consumer vulnerability + buyer remorse + service quality issues are common. Originally enacted following Nova Corporation foreign language school collapse 2007 + multiple aesthetic clinic scandals. (1) Article 41 Six Designated Service Categories: (a) Foreign Language Schools (Goyaku Kyoshitsu 語学教室) - contracts > 2 months + > JPY 50,000; (b) Tutoring Services for Entrance Exams (Gakushuu Juku 学習塾) - contracts > 2 months + > JPY 50,000; (c) Computer Schools - contracts > 2 months + > JPY 50,000; (d) Aesthetic/Cosmetic Surgery + Beauty Services (Esute エステ) - contracts > 1 month + > JPY 50,000; (e) Matchmaking Services (Kekkon Joho Service 結婚情報サービス) - contracts > 2 months + > JPY 50,000; (f) Medical Services for cosmetic purpose

• Six categories classification + Article 41 + records + per service + threshold check
• Mid-term cancellation + Article 47 + refund formula + records + per cancel
• Pre-contract document + Article 43 + records + per customer + audit
• Cooling-off + Article 46 + 8-day + records + per cancel + 30-day refund
• Outcome representation + Article 45 + records + per marketing material + audit

• Service mis-categorised (avoidance of Article 41 thresholds)
• Mid-term cancellation refused or fee exceeds formula
• Pre-contract document missing or inadequate
• Cooling-off implementation weak
• Outcome representations exaggerated (success rate inflation)

Articles 58-3 through 58-12 of the Japan ASCT regulate Visit Purchase Transactions (Houmonkounyu 訪問購入) - sellers BUYING from consumers at consumer's residence. Added by 2012 amendment + effective 1 February 2013 + responding to widespread elderly consumer fraud involving gold + jewellery + precious metals + antiques + Japanese yen rare bills. (1) Article 58-3 Definition: (a) purchase of goods by business operator at consumer's location without invitation; (b) includes (i) gold + silver + platinum + precious metals; (ii) jewellery + watches + accessories; (iii) antiques + art + curios; (iv) clothing + handbags (recently); (v) cars (now restricted); (b) excludes regulated sectors like real estate. (2) Article 58-4 Mandatory Identification: (a) business name + representative + address + phone; (b) at FIRST CONTACT + clearly identify purchase intent; (c) carry written ID + business license;

• Initial contact justification + Article 58-5 + records + per visit + consumer request log
• Identification + Article 58-4 + records + per purchase + name card + ID
• Cooling-off item hold + Article 58-9 + records + per transaction + 8-day
• Pre-contract + contract document + red 8-pt cooling-off + records + per consumer
• Senior protection + family notification + records + per high-value + BLE bank coord

• Cold-call visits without prior request (Article 58-5 violation)
• Item taken during cooling-off (Article 58-9 violation)
• Identification informal or refused
• Pre-contract document missing red font cooling-off
• Senior consumers targeted without protection