Prepare for stealth marketing regulations! First of all, what is the Premiums and Representations Act/Misrepresentation?

What is the Premiums and Representations Act?

When a product or service is made to look better than it really is by falsifying its quality, content, price, etc., or when excessive premiums are offered, consumers are fooled by the display and the quality is actually higher than it really is. You may end up purchasing unsuitable products or services, which could put you at a disadvantage.
The Premiums and Representations Act isProtect general consumers from such misrepresentations and unfair premiums, and protect an environment where they can independently and rationally choose products and services.This is a law aimed at.

What is misrepresentation?

Displays that mislead general consumers into believing that the quality and price of products and services are significantly better or more advantageous than the actual ones.is called "misrepresentation."

"Display" meansGeneral advertisements and displays that inform consumers about the quality, standards, other details, prices, and other transaction conditions of the products and services that businesses supply, as a means of attracting customers.This refers to not only advertising, but also product containers and packaging, telephone sales, and door-to-door sales.

There are three types of misrepresentation:

1. What is misleading representation of quality?
of products and servicesContents of quality, standards, etc.about,Contrary to reality or fact, it is significantly better than that of a competing company.Display that is misunderstood by general consumers as
In other words, it refers to a label that makes general consumers believe that the product is of good quality, standards, and content, when in fact it is not.
Example)
　・Beef from overseas is labeled as if it were domestic brand beef
　・Display a used car with a mileage of 10 km as if it had a mileage of 3 km.

2. What is a misleading representation of benefits?
of products and servicesTransaction conditions such as priceabout,Significantly more advantageous than those of competitors due to differences in reality or factsDisplay that is misunderstood by general consumers as
In other words, it refers to a display that makes the general consumer think that the product is a good deal (quantity, after-sales service, warranty period, payment terms, etc.) when it is actually not.
Example)
　・The price displayed is higher than the actual price, even though it is said to be cheaper than the other company's price.
　・Even though the capacity is the same as other companies' products, it is displayed as if it is more than other companies' products.
　・Display only the initial cost even though other additional costs are required
　・Even though it has been on sale for only one week for 3 yen, it says "3 yen reduced to 2 yen!" (*)
*Displaying your own selling price and a higher price at the same time is called "double price display." When displaying double prices, the higher price must be the price at which the same product has recently been sold for a significant period of time.

3. Other representations that may be misleading
Based on Article 3, Item XNUMX of the Act on Premiums and Representations, the following six notifications are stipulated, and displays that may mislead consumers are prohibited.

・Labeling for non-juice soft drinks, etc.
- Misrepresentation regarding the country of origin of the product
・Misrepresentation regarding consumer credit financing costs
・Display regarding real estate decoy advertisements
・Display regarding decoy advertisements
・Unfair representations regarding excellent nursing homes

The "stealth marketing regulations" that came into effect on October 2023, 10
"Displays that make it difficult for general consumers to discern that they are the display of a business operator"
AsI joined here!

How should I respond?

◆ Display only the truth with evidence

◆Prepare materials that show reasonable grounds to support the labeling (*)
*If the Consumer Affairs Agency suspects a mislabeling of superiority, it can request the business to submit supporting materials to support the labeling, and if it is unable to submit appropriate materials at that time, it will consider the labeling to be a false labeling. (Regulations on unsubstantiated advertising)
Even if the information displayed is true, be sure to prepare reasonable supporting documents such as "the opinions of experts or academic literature" or "the results of tests or investigations using methods generally accepted in the industry" just to be on the safe side!

What happens if there is a violation?

If there is suspicion of a violation of the Act against Unjustifiable Premiums and Misleading Representations, the Consumer Affairs Agency will conduct an investigation, including questioning of your business.
If the investigation reveals a violation, an order will be issued to take measures to prevent recurrence and to thoroughly publicize the facts of the violation.
Furthermore, if you make a misleading representation of quality or advantage, you may be subject to penalties.

The business name isAnnouncementBeing found guilty of a crime will damage the reputation of the business and may result in the loss of sales related to the crime.3%This surcharge will be a pain for businesses.

Finally

Display is essential for selling products and services, but there are various regulations regarding display methods.

This time, we have limited our explanation to unfair representations under the Specified Commercial Transactions Act, but depending on the product or service in question, other laws may apply (such as the Pharmaceuticals and Medical Devices Act).

"Stealth marketing restrictions" will also come into effect on October 2023, 10. It is advisable to review your company's rules once again.