2.Business Model Legality/ Regulatory Approval Investigation

|Q6 (Required Disclosures in Specified Commercial Transactions)

We have seen a website with the “Disclosures under the Act on Specified Commercial Transactions”. What kind of law is the “Act on Specified Commercial Transactions”? Also, are these disclosures always required?

The Act on Specified Commercial Transactions regulates prescribed transactions, such as door-to-door sales and mail order (including online) sales, for the protection of consumers. At present, 6 kinds of transactions are subject to the regulations ? (i) door-to-door sales, (ii) mail order (including online) sales, (iii) telemarketing sales, (iv) multilevel marketing transactions, (v) specified continuous services, and (vi) business opportunity sales transactions.

The regulations cover a broad spectrum, but, for example, if a product is advertised for mail order (including online) sales, certain information specified by the regulations (such as the sales price and delivery cost) must be included in the advertisement (Article 11). Whether you are obligated to include such a disclosure depends on whether your business conducts a business covered by the Act on Specified Commercial Transactions.

(Posted: January 27, 2012)