Printer Friendly

Disbanded firm failed to pay back 1.5 bil. yen.

NAGOYA, June 24 Kyodo

A disbanded health-food company that was based in Tokyo's Minato Ward kept about 1.57 billion yen from customers by failing to honor a stipulated ''cooling-off period'' in contracts, during which customers could cancel and get their money back without penalty, sources close to the case said Sunday.

I.A.S. Produce, which disbanded in April, allegedly collected money from about 20,000 people nationwide, many of them housewives, who were told their money would double in one year.

In late January, when the company informed customers it was scaling back operations for three months, about 1,700 people allegedly demanded the cancellation of their contracts, which were worth a total of 1.72 billion yen.

A former senior official said, ''We paid back members who looked as if they would take legal action. For the most part, we postponed paying customers back, saying 'the paperwork has been delayed'.''

Members of the now-defunct I.A.S. have filed a complaint with the Hiroshima prefectural police against Isamu Kuroiwa, the firm's president, on suspicion of fraud.

About 200 inquiries about the company have been reported at consumer consultation offices nationwide and with the police.

The cooling-off period allows customers to cancel contracts within a certain period of time with no penalties or conditions. It is illegal for a company to refuse to return a customer's money.

The company stipulated in writing a 20-day cooling-off period once customers had received its products.

According to internal company documents and statements by former senior officials, the company's financing ran out this year, and it notified members it would place a voluntary restraint on its business for three months.

Following the notification, members rushed to cancel their contracts, with a total of 1,700 people eventually demanding that their agreement with the company be nullified and their money returned, according to the documents and former senior officials.

The company postponed repaying its customers and called on them to wait until it resumed full business operations, they said.

As a result, about 150 million yen was repaid to a total of 170 people, but the remaining roughly 1.57 billion yen was not returned to the other members.

Meanwhile, the company also had about 360 million yen worth of cancellations be withdrawn by about 200 members.

Kuroiwa disappeared in late April and the company's branches were successively closed.
COPYRIGHT 2002 Kyodo News International, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Japan Weekly Monitor
Date:Jul 1, 2002
Previous Article:Taekwondo world body sends senior official to Japan.
Next Article:Banks freeze disposal of bad loans given to small firms: paper.

Related Articles
Fuji Bank pledges to continue helping Tobishima rehabilitate.
DBJ, 4 banks to jointly help firm rehabilitate.
Takamatsu to buy warrant bond to be issued by failed Aoki.
Failed Hachiyo collected investments until last minute.
SMBC merges with Wakashio Bank.
Kyodo economic news summary -6-.
Securities firms lose 13 bil. yen on OHT stock price plunge.
Kyodo economic news summary -5-.

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters