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Q&A on the Provision of Specified Continuous Services

Specified Continuous Services and the Provision of Specified Continuous Services

Q1What are "Specified Continuous Services?"
A1What are Specified Continuous Services?
The definition of Specified Continuous Services is provided in Article 41, paragraph (2) of the Act as follows:
1. Services that the recipient is induced to receive through the claim that they will increase the recipient's physical beauty, increase the recipient's knowledge or skills, or cause the recipient to accomplish any other purpose related to the recipient's mind, body, or personal affairs.
2. Services the nature of which makes it uncertain whether the purposes prescribed in the preceding item will be accomplished.
This "Specified Continuous Services" means the services that a person who receives such services needs to receive continuously for a certain period in order to achieve the purpose ("purposes related to the recipient's mind, body, or affairs"), such as to become more beautiful ("increase the recipient's physical beauty"), or to improve English ("increase the recipient's knowledge or skill").
On the other hand, services that are generally completed in one session and thus the service recipients do not need to receive them continuously, such as haircuts or massages, do not fall under Specified Continuous Services.
Q2How is the "Provision of Specified Continuous Services" provided for each service?
A2About the "Provision of Specified Continuous Services" subject to the Specified Commercial Transactions Act
When the following "Specified Continuous Services" specified by Cabinet Order are provided for a period exceeding a certain period by receiving compensation exceeding a certain amount(including sales of the right to be provided with services), such provision of services will be subject to the Specified Commercial Transactions Act.
As for the "consideration," when the total amount of admission fee (entrance fee), tuition fee, educational material fee, facility utilization fee, the sale of related goods, etc., is more than fifty thousand yen, such provision of services will be subject to the Specified Commercial Transactions Act.
<Definition, period, and amount per service>
Specified Continuous Services Period Amount of consideration
So-called esthetic salons
Esthetic salons perform treatment to purify or beautify a person's skin, fix the body shape, or lose weight.
The services that continue for more than one month More than fifty thousand yen for each service
So-called language schools
Language schools teach languages (excluding those that fall under teaching for the improvement of academic ability to prepare for school entrance examinations or to supplement education in schools other than universities).
The services that continue for more than two months
So-called home tutors(※1)
Home tutors teach students for the improvement of academic ability to prepare for school entrance examinations (excluding elementary schools and kindergartens) or to supplement school education (excluding universities and kindergartens) (limited to those provided at places other than so-called cram schools).
The services that continue for more than two months
So-called cram schools(※1)
Cram schools teach students of schools (excluding universities and kindergartens) to improve their academic ability to prepare them for school entrance examinations or to supplement school education (limited to those provided at an office(s) of a service provider or other places prepared by the service provider for the purpose of the provision of said services).
The services that continue for more than two months
So-called personal computer schools
Personal computer schools teach knowledge or techniques pertaining to the operation of electronic computers or word processors.
The services that continue for more than two months
So-called marriage agencies
Marriage agencies introduce the person to a person of the opposite sex who seeks to get married.
The services that continue for more than two months
* Teaching in preparation for "competitive entrance examinations" for prestigious elementary schools and kindergartens are not included in "home tutors" and "cram schools." Services (courses) targeting only Ronin students (meaning students who failed the entrance examinations and are preparing for one next year) do not fall under "cram schools" (courses that target both high school students and Ronin students fall under cram schools as a whole).
* Services for which contents are provided via fax, telephone, the Internet, postal mail, etc. also fall under "Specified Continuous Services."
Q3How are so-called ticket systems and membership systems treated?
A3Treated as services with no expiration date
Esthetic salons and language schools using so-called "ticket systems" and "membership systems" are also subject to the Specified Commercial Transactions Act in principle. For those with an expiration date,
as the service recipients can be provided with the services anytime up to the expiration date, the period until the expiration date is considered to be the service period, and thus when this service period exceeds the base period, such services will be subject to the Act.
For those without an expiration date, as the service recipients can be provided with the services anytime, their service period is always considered to be over the base period.
Note that when these tickets and memberships are sold by a third party other than the provider of the services, it is considered to be a "Sales Contract for Specified Rights," and it will be subject to the Specified Commercial Transactions Act as well.

Delivery of Documents

Q4What kinds of documents are required to be delivered pertaining to the Provision of Specified Continuous Services?
A4About the delivery of documents
When the Provision of Specified Continuous Services is performed, business operators are obligated to deliver documents twice; first before the conclusion of the contract, and second at the conclusion of the contract.
About outline documents
A so-called outline document delivered prior to the conclusion of the contract contains information that consumers need to know in concluding a contract.
To be more specific,
such documents will be delivered along with the explanation of the service contents, etc. given to the consumer when visiting the business operator's store to conclude a contract, etc. at some time before the conclusion of a contract.
About contract documents
This document is delivered to offer information on the contents of the contract and the matters required by the Act pertaining to the contract after the contract is concluded.
It should be issued "without delay," and will be issued at the same time with the conclusion of the contract unless there are exceptional circumstances.

(Changes in the contract)

Q5Please tell me how the provisions of the Act will apply when the contents of a contract, such as service period or contract money, etc. are changed.
A5Basic policy on changes in contract
The following is the basic policy on the application of the Act when the contents of a contract, such as service period, contract money, related goods, etc. are changed:
・When the original contract is not subject to the Act
If the contents of the contract that was originally not subject to the Act are changed, it will basically be considered to be the same as concluding a new contract, and if the changed contents of the contract fall under the conditions provided in the Act, it will be subject to the Act from the point when the contract was changed, and thus the delivery of a document becomes mandatory, and cooling-off and mid-term cancellation become possible.
(Exceptional cases)
Even when the changed contract alone does not fall under the conditions provided by the Act, if the changed contract is considered to constitute one contract together with the original contract, the contract as a whole may become subject to the Act if the contract as a whole meets the conditions provided by the Act.
Please note that even if the original contract sets "one month" as its effective period for form's sake, if the extension of such period is obviously presumed, and thus it substantially meets the conditions provided by the Act, the original contract is subject to the Act in the first place.
・When the original contract was subject to the Act
If the original contract falls under the Provision of Specified Continuous Services, the period, amount, and all other details of the contract specified by the Act must be clarified in writing upon the conclusion of the contract, in principle.
Therefore, it is not possible for a business operator to change the contents unilaterally after the conclusion of the contract. The application of the Act when changing the contents of the contract according to the agreement by both parties will be decided by focusing on the substance thereof.
That means, if it is considered to be the conclusion of a new contract, whether the new contract will fall under the conditions specified by the Act will be determined, and if it does, the delivery of a new document will be performed, and when such document is delivered,
cooling-off will become possible. On the other hand, if it is considered to be a change of the contract contents, cooling-off won’t become possible again; however, it would be necessary to clarify the changed contents in writing.

Prohibited Conduct

(About "indication that differs vastly from the truth")

Q6Please give me some examples of an "indication that differs vastly from the truth" and an "indication that misleads people into believing that it is vastly better or more advantageous than it is in reality" in Prohibition of Misleading Advertising.
A6Prohibition of misleading advertising
As with Mail Order Sales, for the Provision of Specified Continuous Services, advertisements are used by Specified Continuous Services providers as a means to solicit general consumers, and often times customers are induced by the claim that the services will provide results or realize the consumer's purpose, therefore the Act prohibits false or misleading advertisements to prevent consumer problems.
Criteria of false or misleading advertisements
An "indication that differs vastly from the truth" and an "indication that misleads people into believing that it is vastly better or more advantageous than it is in reality" are provided as the two criteria of false or misleading advertisements, and the specifics of each advertisement will be judged respectively, but to give an example, if the following applies to the advertisement, it will be considered to fall under a false or misleading advertisement: "If a general consumer knew the difference between what is indicated in the advertisement and the truth, such consumer wouldn't have been solicited to conclude such a contract."
Specific example of misleading advertisements
Specific examples include misleading advertisements concerning matters pertaining to persons who actually perform the relevant services to the customer (qualifications, capabilities, etc., of the operators and lecturers),
or false indications pertaining to "affiliation with the national or local governments," such as "accredited by the Minister of Education," "recommended by the Ministry of Economy, Trade and Industry," or "accredited by City of Tokyo," etc.
In addition, there are advertisements that highlight a person who achieved remarkable results or attained the purposes through receiving the services and emphasize such remarkable results or attained purposes by indicating "Body weight: Minus xx kg," "Term-end examination: Plus XX points," etc. Whether these advertisements fall under misleading advertisements will be judged depending on whether they claim, or are deemed to be claiming, as if many and unspecified general consumers are sure to obtain or attain similar results or purposes by receiving similar services, even though it is uncertain in practice (in other words, it depends on whether there is a statement or expression that misleads people to think that all consumers who are provided with such services can obtain such results).
Specifically, such statements as "Minus xx kg – We promise you," or "We realize plus xx points" without good reasons are highly likely to be considered to be misleading advertisements.

(About "misrepresentation")

Q7What kind of notifications can be so-called misrepresentation (Article 44, paragraph (1) of the Act) and "material information that would affect the decision" specifically?
A7What is "misrepresentation"?
An act "to prevent the cancellation of a contract" mainly envisages unjust acts to prevent the execution of cooling-off or mid-term cancellation, and means an act of notifying "false information" in order to interrupt a consumer's right conducts that are in compliance with the provisions of cooling-off or mid-term cancellation.
What is "material information that would affect the decision"?
These are matters that seriously affect a customer or a person who receives the provision of the Specified Continuous Services in deciding to conclude or cancel a contract, and that are related to the contract.
Specific examples
The followings can be listed as examples:
-At the conclusion of a contract, a consumer is informed that "you will surely be able to make an appointment (for receiving the service) at any desirable time," but the truth is that appointments are hard to make because the service provider is swamped with other appointments, or for other reasons.
-When a consumer requests the cancellation of a contract, the service provider avoids such cancellation by giving the consumer false information, such as by saying "your case is special so you are not supposed to cancel."

(About "intimidation to overwhelm")

Q8What kind of conduct falls under "intimidation to overwhelm" in the provisions of prohibited conduct (Article 44, paragraph (3) of the Act)?
A8What are "intimidation" and "overwhelm?"
"Intimidation" means conduct that builds up anxiety in consumers to the extent that stops short of assault, and "overwhelm" means to make consumers upset and confused.
Specific examples
The followings can be listed as examples:
・The service provider spoke loudly saying "I'll be in trouble if you do not sign this contract," and the consumer was bewildered having no other parties present, and hastily made a contract wanting to leave the place quickly.
・While receiving a free-trial service in an esthetic salon, a consumer was surrounded by many people without any (or some) clothes on and was induced with insistence, so the consumer concluded a contract out of fear.
・When a consumer requested cooling-off, the provider called and demanded payments saying "if you do not pay the remainder, we will make you have to move out of your current home," so the consumer stopped executing cooling-off out of fear.

Cooling-off

Q9Please tell me about cooling-off of related goods.
A9 Cooling-off of Related Goods
It is possible to execute cooling off of related goods if such goods were purchased as a requirement to receive the provision of the service.
There are many cases where the sale, etc., of goods that consumers must purchase to receive the provision of services (hereinafter referred to as "related goods") is conducted, such as the sale of cosmetics used during treatments and health foods required to drink at home continuously conducted at esthetic salons, or the sale of audio recordings conducted at English conversation schools.
In these cases, even if cooling off from the language school is accepted, if cooling off from the contract pertaining to the sale of related goods such as audio recordings is not accepted, consumers are not well protected, so the Act provides that cooling off of the sales contract of related goods is also possible (cooling-off of the related goods alone is not possible).
Designation of related goods
For the purpose of securing the stability of transactions, related goods to which cooling off can be executed are limited to certain products.
To be specific, the following are designated as related goods: for esthetic salons, so-called health foods, cosmetics, soaps (excluding pharmaceutical products) and bath agents, underwear, electric facials, and depilatory devices;
for language schools, home tutors, and cram schools, books (including educational materials), so-called software (audio recordings, CDs, etc.), facsimile devices, and videophones.
About consumables
With regard to the related goods designated by Cabinet Order as goods for which the value is completely lost by any usage or consumption (so-called consumables), cooling-off will become impossible once they are used or consumed.
Goods designated as such consumables are health foods, cosmetics, soaps (excluding pharmaceutical products), and bath agents.
About the "use or consumption" of consumables
To be more precise, if the related goods are obviously "used or consumed," it would naturally be considered to be "used or consumed"; however, in the case of goods whose packages need to be completely sealed, such as those for which the indication of net-weight is required by law, just opening their packaging will be considered to be "use or consumption," even if the related goods are not "used nor consumed." But in general, just opening the packaging of goods is not considered to be used or consumed.

Sales form of related goods

Q10What about if a consumer is allowed to purchase related goods either from the party designated by the service provider or in town?
A10About "agent or intermediary"
Regarding related goods, it is possible to execute cooling off when the goods are sold to a consumer by a service provider or a seller, as well as when the service provider or the seller acts as an agent or an intermediary for the sales contract between a third party who sells such related goods.
As an "agent," a service provider or a seller concludes a sales contract for related goods in the name of the party who sells such related goods, and as an "intermediary," a service provider or a seller mediates between the consumer and the party who sells the related goods.
To be more specific, a service provider or a seller will be considered to have worked as an "intermediary," if it instructs a consumer to buy a related good from a designated supplier with whom it has a pre-agreement.
What about buying from stores in town?
In that case, goods purchased from the designated supplier are considered to be related goods, but goods purchased from stores in town are not considered to be related goods.
Therefore, only the goods purchased from the designated supplier will be written in the document as related goods.
Q11What is the difference between related goods and recommended goods?
A11About related goods and recommended goods
With the latest amendment to the Act, "related goods" means "goods that the service recipient will need to purchase at the time the services are provided," and such goods are subject to mid-term cancellation and cooling-off.
In addition, a business operator who provides Specified Continuous Services must indicate, in outline documents and other documents delivered upon the conclusion of a contract, "the name of any goods that the service recipient will need to purchase at the time the services are provided" and "the amount of payment broken down by expense item."
Therefore, viewed in terms of format, the goods written in the document delivered upon the conclusion of a contract as the goods that the service recipient will need to purchase at the time the services are provided are "related goods," and the goods that the service recipient will not necessarily need to purchase at the time the services are provided, and are not written in the document delivered upon the conclusion of a contract are so-called "recommended products," to which cooling off or mid-term cancellation cannot be executed.
About related goods and the delivery of written documents
Consumers must confirm the document delivered upon the conclusion of a contract and check the required items including the contents of the service. Especially regarding goods that are explained as goods to be purchased,
it is important for consumers to confirm whether the goods are written in the delivered document as related goods, before concluding the contract.
Please note, when the service provider sells "goods that the service recipient will need to purchase at the time the services are provided," such as when the service provider explains to the consumer, at the time of concluding the service contract, about the goods that need to be purchased, if such goods are not written in the delivered document, such service provider will be subject to administrative dispositions or penalties on the grounds of deficiency in documents.
Q12Do I need to accept the return of underwear, etc. unconditionally if it is still in the cooling-off period even if the consumer already wore it? Also, do I need to accept used underwear even after the cooling-off period has passed by getting some amount of charge for the use?
A12You are required to accept the return of related goods in principle.
In the case of cooling-off of a Specified Continuous Service Contract, any used or consumed consumables can be exempted from cooling-off (limited to the case where a note to that effect is included in the document delivered upon the conclusion of the contract).
However, goods designated as consumables are only cosmetics and health foods, and underwear is not designated.
Therefore, when cooling-off is executed, the service provider is required to unconditionally accept returns, and in the case of mid-term cancellation after the cooling-off period, settlement must be made within the upper limit specified by the law (see below*) by a method predetermined in the delivered document. In the case of mid-term cancellation, if the goods are not returned, the service provider may claim the amount equivalent to the selling price of the goods, but it also needs to accept the return of the goods.
*Mid-Term Cancellation of the Related Goods and the Upper Limit of the Charge (Article 49, paragraph (6) of the Act)
When the related goods are returned
The amount equivalent to the ordinary usage fees for the related goods (when the amount equivalent to the selling price of the related goods less their market value as of the time of their return exceeds the amount equivalent to the ordinary usage fees, such amount applies).
When the related goods are not returned
The amount equivalent to the selling price of the related goods
When the contract is canceled prior to the transfer of the related goods
The amount of costs normally required for concluding and performing a contract

Mid-Term Cancellation

Q13Please tell me about mid-term cancellation
A13Mid-term cancellation system
Even after the cooling-off period has passed, consumers (recipients of the services) can execute mid-term cancellation of a Specified Continuous Services Contract anytime during the contract period for any reason whatsoever.
If the consumer has purchased related goods, they can also be canceled (Article 49 of the Act).
In the case of mid-term cancellation, unlike in the case of cooling-off, the consumer must pay to the service provider the consideration for the services already provided (for example, if the consumer canceled the contract three months after the conclusion of the contract, the consideration for services for three months) as well as the damages up to a certain amount specified by law. If the service provider has already received more than this amount, the excess amount must be returned immediately.
Limitation of the amount of damages
The upper limit of the amount of damages the service provider can claim from the consumer at the time of mid-term cancellation is provided as noted below:
Is it possible to cancel the related product goods if the contract period has expired?
Regarding mid-term cancellation of the related goods based on law, it is possible only when the service contract itself is canceled mid-term. If the contract period has expired, that means the contract itself has ended, then it is not possible to execute mid-term cancellation of the service contract itself, therefore it is not possible to execute mid-term cancellation of the related goods alone.
<About the upper limit of the damages in mid-term cancellation>
(1) When the contract is canceled before the start of service provision
The following amounts specified for each service by Cabinet Order as the amount of costs normally required for concluding and performing a contract
  • Esthetics salons/Twenty thousand yen
  • Language schools/Fifteen thousand yen
  • Home tutors/Twenty thousand yen
  • Cram schools/Eleven thousand yen
  • Personal computer schools/Fifteen thousand yen
  • Marriage agencies/Thirty thousand yen
(2) When the contract is canceled after the provision of the service
a) The amount equivalent to the consideration for the Specified Continuous Services provided
b) The following amount following amounts specified for each service by Cabinet Order as the amount of damages that are normally caused by the cancellation of the relevant Specified Continuous Services Contract
Esthetic salons: The lesser of either twenty thousand yen or the amount equivalent to 10% of the remaining contract money
Language schools: The lesser of either fifty thousand yen or the amount equivalent to 20% of the remaining contract money
Home tutors: The lesser of either fifty thousand yen or the amount equivalent to the consideration for one month of the relevant Specified Continuous Service Contract.
Cram schools: The lesser of either twenty thousand yen or the amount equivalent to the consideration for one month of the relevant Specified Continuous Service Contract
Personal computer schools: The lesser of either fifty thousand yen or the amount equivalent to 20% of the remaining contract money
Marriage agencies: The lesser of either twenty thousand yen or the amount equivalent to 20% of the remaining contract money

(About initial cost)

Q14In the case of mid-term cancellation, how should the initial cost be dealt with?
A14About initial cost
So-called "initial cost," such as preparation cost of the delivered document, stamp tax cost, and membership registration cost, in the case of mid-term cancellation are treated as noted below:
If the cancellation is executed before the start of service provision, this initial cost can be claimed up to the limit provided by Cabinet Order as "the amount of costs normally required."
If the cancellation is executed after the start of service provision, it may be possible, in principle, to claim an amount within the range that can be considered to be "the amount equivalent to the consideration for the provided services" by the settlement method written in the document delivered at the conclusion of the contract; however, whether such claim is actually possible, or the amount that can be claimed, depends on the individual case.
Note that the upper limit for the "costs required for concluding and performing a contract" before the start of service provision is provided by Cabinet Order (eleven thousand yen (cram schools) to thirty thousand yen (marriage agents)), and these would also serve as a reference in the case where the initial cost is claimed after the start of service provision.
Upon admission, we receive costs for copying, utilities, and air conditioning as annual costs and expenses. Can these costs and expenses be considered as initial cost?
Initial cost is considered to be the cost required for the conclusion of the contract, such as costs for enrollment procedures, level checks, or placement tests.
Therefore, costs and expenses for copying, utilities, air conditioning are considered to be monthly costs, and thus these are not considered to be the initial cost.
Q15In the case of mid-term cancellation after the start of service provision, how should the admission fee or entrance fee be treated?
A15Characteristics of entrance fee and admission fee
Concerning the settlement at the time of mid-term cancellation after service provision has started, the business operator cannot claim an amount that exceeds "the amount equivalent to the consideration for the provided services" and "the amount of damages that are normally caused."
In addition, an upper limit is provided for "the amount of damages that are normally caused" per each service.
Considering their nature, entrance fees or admission fees of esthetic salons, cram schools, etc., must be refunded in accordance with this settlement rule in principle, and thus special provisions such as "admission fees (entrance fees) are not refundable" will be deemed invalid, as they don’t fall under any of the amounts mentioned above.
However, concerning the part of such fees equivalent to so-called initial cost, if there are reasonable grounds for deeming it as "the consideration for the provided services," it may be claimable;however, whether such claim is actually possible, or the amount that can be claimed, depends on the individual case.
Settlement of initial cost
In order for a business operator to claim the initial cost upon settlement for mid-term cancellation after the start of service provision,
such business operator has to clarify the specific contents of such costs beforehand, and clearly indicate that it will claim such costs in the case of mid-term cancellation.
Specifically, under the "information about settlement" section in the document to be delivered at the conclusion of the contract, specific contents of the initial cost must be described, and also, a note to the effect that the initial cost may be claimed at the time of mid-term cancellation must be clearly indicated.
Note that the upper limit for the "costs normally required for concluding and performing a contract" is provided in Article 49, paragraph (2), item (ii) of the Act, and this would also serve as a reference for the upper limit in the case of claiming initial cost.

Settlement method in mid-term cancellation

Q16If I cancel the contract mid-term after the service provision started, how much of a refund can I claim from the business operator?
A16The upper limit of damages
In the provision of Specified Continuous Services, if a contract is canceled mid-term after the start of service provision, the upper limit of damages that the business operator can claim from the consumer is provided as the total amount of a) and b) below:
a) the amount equivalent to the consideration for the provided service
b) the amount specified by Cabinet Order as the amount of damages that are normally caused by the cancellation of the contract (for example, in the case of esthetic salons, twenty thousand yen or 10/100 of the remaining amount of the contract money, whichever is lower).
About initial cost
Of these, a) is for the settlement of the consideration for the services already provided at the time of mid-term cancellation, and some costs and expenses required for concluding and performing the contract (so-called "initial cost") may be considered to be included in this consideration;however, whether such claim for the "initial cost" is actually possible, or the amount that can actually be claimed, depends on the individual case. (See Q14)
Mid-term cancellation and settlement method
If a consumer has already made an advance payment to a business operator, the remaining amount after subtracting a) the amount equivalent to the consideration for the services provided until the mid-term cancellation and b) the damages up to a certain amount, will be refunded.
"The amount equivalent to the consideration for the provided services" consists of the part equivalent to the initial cost and "consideration for the services (in a narrow sense)" as shown in the figure below.
The treatment fees of esthetic salons, monthly tuition of cram schools, etc. used until the mid-term cancellation are "the consideration for the services (in a narrow sense)."
Note that in order to claim such "initial cost," a business operator is required to describe the breakdown of the initial cost and the settlement method to be used in the document to be delivered at the conclusion of the contract.

About "ordinary usage fee"

Q17Please tell me about the "ordinary usage fee" in the case of mid-term cancellation of the related goods. Also, please tell me about the case of goods whose value will considerably decrease when they are used.
A17About "ordinary usage fee of goods"
For "the amount equivalent to the ordinary usage fees" for the case where a related good is canceled mid-term and returned, a rental charge can be used as a reference, but the amount should be reasonable, taking into consideration the depreciation cost, the margin, the interest,etc. of such goods. In addition, it must be an "ordinary" usage fee, and it is not possible to reflect a special situation.
As for the specific amount of the usage fee, if there is a standard fee already calculated by the industry for such goods, such fee will be used as a reference. If there is no such standard fee in the industry, a reasonable amount must be calculated.
When the value has declined
Furthermore, the Act provides that, if "the amount equivalent to the selling price of the related goods less their market value as of the time of their return," that is, the difference between the price of the new goods and the price of the returned goods in the used goods market, exceeds the "ordinary usage fees," such difference will be the maximum amount the business operator is allowed to claim from the consumer (refer to Article 49, paragraph (6), item (i), in parentheses of the Act). Therefore, if related goods whose value has declined, such as cosmetics or health foods which have been opened or consumed, or books on which something has been scribbled, are returned, the amount up to such difference can be claimed by the settlement method written in the document delivered upon the conclusion of the contract.

Q&A per service

(1) Esthetic salons

Specified Continuous Services Period Amount of consideration
So-called esthetic salons
Esthetic salons perform treatment to purify or beautify a person's skin, fix the body shape, or lose weight.
The services that continue for more than one month More than fifty thousand yen for each service
Q18Are hair transplant, hair restoration, hair growth, and depilation included in the Specified Continuous Services of esthetics?
A18It depends on the purpose of the treatment. Hair transplant and hair restoration would not be considered as falling under the definition of a so-called esthetics salon treatment, which is to "purify or beautify a person's skin."
Also, some hair growth treatments may "purify or beautify a person's skin" as part of the treatment, but if that is only a part of the whole treatment process performed for a different purpose, it will be considered not to fall under esthetics treatment.
As for depilation, its purpose (removal of body hair) is considered to fall under "to purify or beautify a person's skin."

About contracts in which services are provided for free, but the related products are charged

Q19Does a sales contract of cosmetics or health foods, in which the esthetics treatment is provided for free, fall under the Provision of Specified Continuous Services?
A19Judged from the substance of the contract
The amount of consideration specified by Cabinet Order for a service to be considered as Specified Continuous Services includes the amount of the charge for related goods a consumer must purchase.
Therefore, even if the contract says "this is a contract for sales of goods only and esthetics treatments are provided for free" and cosmetics or health foods are sold as related goods, judging from the substance of the contract, it is a contract in which sales of goods and the provision of services are performed in pair; therefore if the period of the provision of the service is longer than one month and the amount a consumer has to pay exceeds fifty thousand yen, it will become subject to the Act.
For example, if the amount of consideration exceeds fifty thousand yen and a consumer can receive the service any time after purchasing the goods, such provision of service will fall under the Provision of Specified Continuous Services.

Changing contents of esthetics treatment contract

Q20What if, in a contract for esthetic treatment, the initial plan was one month but it became longer, or if I was told that I need to buy additional goods after the conclusion of the contract?
A20It is fundamental to clarify the contents of the contract at the beginning.
The Act provides that all the details of the contract specified by the law, such as the contract period and the amount of the consideration, must be clarified in writing, and they cannot be changed unilaterally.
The basic policies for application of the law when the contents have been changed are shown in Q5.
Changing the contract period
The Act will not apply to a contract for esthetics treatment that lasts essentially for one month or less. However, if such contract period is extended and the extended contract came to meet the criteria for the Provision of Specified Continuous Services, the delivery of a designated document will become necessary at that point.
Note that even if the extended contract does not meet the criteria, if such extension had been obviously planned from the beginning, or if the contract before the extension and the contract after the extension are considered to substantially form one and the same contract that meets the criteria, such contract will be subject to the Act at the time of such extension.
Addition of related goods
The Act provides that, in contracts for the Provision of Specified Continuous Services, if the compulsory purchase of goods is contemplated in the future mainly during the contract period,such goods must be stated in the document to be delivered upon conclusion of the contract, and business operators cannot oblige a consumer to purchase any goods that are not stated in said document.
Therefore, if, for any goods that are not stated in the document, a business operator says "you must purchase this good" after the conclusion of the contract, such business operator must conclude another contract in principle (if there is mutual agreement between both parties, it will be dealt with as a change in the contract period or the amount of consideration, etc.).

(2) Language schools

Specified Continuous Services Period Amount of consideration
So-called language schools
Language schools teach languages (excluding those that fall under teaching for the improvement of academic ability to prepare for school entrance examinations or to supplement education in schools other than universities).
The services that continue for more than two months More than fifty thousand yen for each service

[Specific examples] of what are considered "Language schools"

・Language lessons for qualification examinations such as the English Proficiency Test.
・Any "language lessons" conducted as part of foreign culture classes
・Japanese classes to learn Japanese language

Exceptions to "Language schools"

In the School Education Act, the range of schools is provided in Article 1 as kindergarten, elementary school, lower secondary school, upper secondary school, secondary educational school (chuto kyoiku gakko), school for special needs,
university, and technical college, in Article 124 as advanced vocational school (senshugakko), and in Article 134, paragraph (1) as miscellaneous school (kakushugakko)
The provision of services conducted for entrance examinations of the aforementioned schools or to supplement education in schools provided in Article 1 of the School Education Act (excluding universities) does not fall under "language teaching."
However, there is a possibility that said services may fall under "home tutor" or "cram school."
For those that fall under "home tutor" or "cram school," please refer to the respective paragraph.

(3) Home tutors

Specified Continuous Services Period Amount of consideration
So-called home tutors
Home tutors teach students for the improvement of academic ability to prepare for school entrance examinations (excluding elementary schools and kindergartens) or to supplement school education (excluding universities and kindergartens) (limited to those provided at places other than so-called cram schools).
The services that continue for more than two months More than fifty thousand yen for each service

Note: Teaching in preparation for "competitive entrance examinations" for prestigious elementary schools and kindergartens are not included.

School Education Act and "home tutors"

In the School Education Act, a range of schools is provided in Article 1 as kindergarten, elementary school, lower secondary school, upper secondary school, secondary educational school (chuto kyoiku gakko), school for special needs, university,
and technical college, in Article 124 as advanced vocational school (senshugakko), and in Article 134, paragraph (1) as miscellaneous school (kakushugakko).
The provision of services conducted for entrance examinations of the aforementioned schools (excluding elementary schools and kindergartens) or to supplement education in schools provided in Article 1 of the School Education Act(excluding universities and kindergartens) falls under "home tutor" or "cram school" as the "improvement of academic ability."

Difference between cram schools and home tutors

Cram schools and home tutors are distinguished from one another by the place of service provision. In the case the provision of service is conducted at a place the service provider prepared, it falls under a cram school,and in the case the provision of service is conducted at a place other than one the service provider prepared, it falls under a tutor.
The style of tutorial prep school is similar to that of a tutor, but if the students visit and learn in a classroom, which is the same style as cram schools, it falls under a cram school in the Act.
* "Improvement of academic ability" is considered to mean improving academic ability by teaching theories and knowledge.
* Individual guidance by facsimile and TV phone (correspondence education system)
Regardless of the style of service provision, if so-called correspondence education via facsimile or TV phone is conducted to improve academic ability for entrance examinations or to supplement school education, it will be considered to be "home tutor."

Q21Specific continuous services are defined as services provided "for a fee," so if the service comes for free with the purchase of educational materials, is such service considered not subject to the Act?
A21"Free of charge" and "free of cost"
In Article 41, paragraph (2) of the Act, Specified Continuous Services are defined as the services that are "continuously provided" "in exchange for payment," therefore services provided free of cost will not be subject to the Act.
However, free of cost, and free of charge are different, and a judgement will be made depending on whether the service is provided essentially "free of cost."
For example in correspondence education, even if correction and guidance are explained as free of charge, if the service is a service bearing economic value,(i.e., he/she recognizes that the service is provided for value), such service is considered to be a service provided in exchange for payment, and will be subject to the Act.
The specific requirements of "continuously provided" and "in exchange for payment" are provided in paragraph (1) of the same Article.

Services incidental to educational material

Q22Do correspondence correction and on-telephone educational consultation conducted as incidental services to an educational material fall under "home tutor?"
A22Basic policy
The basic policy on judging whether services incidental to the sale of educational materials fall under "home tutor" is that, if basically all of the following conditions are met, such services will be considered to be subject to the Act.
1. The services to be provided fall under the "improvement of academic ability."
Here, the improvement of academic ability is considered to be the improvement of students' academic ability by teaching knowledge and theories. Therefore, when such "improvement of academic ability" is conducted in correspondence correction or on-telephone educational consultation,these services will fall under continuous services. However, a simple explanation of how to use the educational materials, or the provision of information concerning advancement to next school, etc., are not considered to fall under the "improvement of academic ability."
2. The amount of compensation for related goods and services and other charges a consumer must pay exceeds fifty thousand yen.
Even if the service itself is explained as free of charge, if the service has a value, it will be subject to the Act. While correspondence correction and on-telephone educational consultation that are provided withthe sale of educational materials are considered to be after-sale services under normal social conventions, if the provision of the service is not a prerequisite for the sale, and the consumer recognizes the same, then such service is not considered to fall under "home tutor."
3. The period of provision of said services is longer than two months. (If there is no set period or if the period is indefinite, such service will always fall under "home tutor.")

About the case where correspondence guidance or on-telephone guidance is provided with the sale of educational materials

Q23When selling educational materials, if we conclude a contract (the title of the contract is sales contract of educational materials) saying that we will teach the consumer by correspondence guidance or on-telephone guidance until he/she understands,does it fall under "home tutor?"
A23It will be judged depending on the substance of the contract that teaches until he/she understands.
In this case, to "teach until he/she understands" is considered to correspond to the "improvement of academic ability." Furthermore, it is a prerequisite for the sale of educational materials, and the consumer recognizes the same,and the period is not provided, therefore if the amount exceeds fifty thousand yen, it is considered to fall under "home tutor."

(4) Cram schools

Q24How does Cabinet Order define "cram schools?"
A24"Cram schools" that are subject to the Act
Cabinet Order defines so-called "cram schools" which will be subject to the Act as follows. Specifically, it is the improvement of academic ability provided continuously"at an office(s) of a service provider or other places prepared by the service provider for the purpose of the provision of said services," and the content of the service is improvement of academic ability to prepare students for entrance examinations or to supplement school education, targeted only at elementary school students, junior high school (lower secondary school) students, and high school (upper secondary school) students, etc.
About "places prepared by the service provider"
"Places prepared by the service provider" are typically classrooms in cram schools; however, they also include places such as assembly halls or rooms of an apartment the service provider rented for the provision of the service.
Specified Continuous Services Period Amount of consideration
So-called cram schools
Cram schools teach students of schools (excluding universities and kindergartens) to improve their academic ability to prepare them for school entrance examinations or to supplement school education (limited to those provided at an office(s) of a service provider or other places prepared by the service provider for the purpose of the provision of said services).
The services that continue for more than two months More than fifty thousand yen for each service

Note:
・Teaching in preparation for "competitive entrance examinations" for prestigious elementary schools and kindergartens are not included.
・Services (courses) targeting only Ronin students (meaning students who had failed the entrance examinations and are preparing for one next year) do not fall under "cram schools" (courses that target both high school students and Ronin students fall under cram schools as a whole)

Q25Does a course to prepare for the examination for the Certificate for Students Achieving the Proficiency Level of Upper Secondary School Graduates fall under a cram school?
A25Cram schools limit the targets
The examination for the Certificate for Students Achieving the Proficiency Level of Upper Secondary School Graduates is an examination to identify whether a person has the same or higher academic ability compared with those who have graduated high school (upper secondary school).
Those who passed the exam will be granted a qualification for candidacy for entrance examinations for universities, colleges, or technical colleges, and will be certified as a person who has the same or higher academic ability compared with those who have graduated high schools,and such certification can be utilized in job-hunting or qualification tests, etc. If the service conducts the improvement of academic ability to pass the examination for the Certificate for Students Achieving the Proficiency Level of Upper Secondary School Graduates,it is considered to fall under the improvement of academic ability to supplement school education. However, the definition of "cram school" limits its target to students of elementary schools, junior high schools (lower secondary schools), and high schools (upper secondary schools);therefore, if the user of the school is not a student of an elementary school, junior high school, or high school, it does not fall under a "cram school."
In cases other than cram schools
If the improvement of academic ability to pass the examination for the Certificate for Students Achieving the Proficiency Level of Upper Secondary School Graduate is conducted at a place other than a cram school by correspondence education via facsimile, telephone, videophone,etc., or by dispatching a home tutor, it falls under "home tutor." The definition of "home tutor" does not limit the recipient of the service; therefore, even if the recipient is a housewife or unemployed, it will fall under "home tutor."
Q26Does the Act apply to "the Provision of Specified Continuous Services" conducted by a public service corporation?
A26Public service corporations
Even if a public service corporation or an incorporated association conducts a business similar to "said Provision of Specific Continuous Service" as part of their businesses,such service is not considered to be subject to the Act as far as it is not conducted mainly for the purpose of making a profit, because such business is conducted incidental to public services.
Q27Will the regulations in this chapter be applied to cram schools with a monthly tuition system?
A27If the services of cram schools are provided by monthly tuition system under a contract that is renewed every month, it does not fulfill the "period specified by Cabinet Order," therefore the regulations of this chapter will not apply.
However, if the service provider sells educational materials to consumers saying that they are necessary when receiving the service, and if it is judged from the actual situation thatthe recipient of the service will be bound by the contract for more than the period specified by Cabinet Order, the regulations of this chapter may apply to such service.