Public Information

Appendix 1

 JBA

Member banks cannot refuse a mediation proposal without just reason.

In case of refusal, the bank must explain its reasons for non-compliance to the Mediation Committee in writing.

 JSDA

When a member enterprise refuses to comply with a mediation proposal, it must immediately deposit with JSDA the sum of money that it has been called on to pay in the mediation proposal and must file a lawsuit for confirmation of non-liability. The above does not apply if the user who is the counterparty in the dispute has filed a lawsuit concerning the dispute covered by the mediation proposal.

 FFAJ

When a member enterprise refuses to comply with a mediation proposal, it must immediately deposit with FFAJ the sum of money that it has been called on to pay in the mediation proposal and must file a lawsuit for confirmation of non-liability.

 CFAJ

(Regarding mediation procedures) If an enterprise rejects without justifiable reasons a mediation proposal that has already been accepted by a user, necessary instructions are issued to the enterprise concerning the acceptance of the mediation proposal according to the provisions of the articles of incorporation of CFAJ. If the enterprise rejects these instructions, it is disciplined according to the provisions of the articles of incorporation.

Appendix 1 Consumer Affairs Centers (LIAJ, CFAJ), printed materials and e-mail to customers, posters.

Some specified major industry associations are carrying out public information activities through Consumer Affairs Centers. If public information strategies are designed from the perspective of “What is the first organization that users will go to with their complaints and disputes?” an effective approach would be to work through widely recognized Consumer Affairs Centers⁶³ and agencies of the central government (ministries and agencies with jurisdiction) and local governments. It would also be desirable to increase the level of public information activities undertaken through other consulting organizations (bar associations, judicial scriveners associations, etc.) that are not able to render final resolutions in disputes.

 Explaining Procedures at Intake of Complaints

As mentioned above, some of the industry associations operating ADR organizations do not, as a rule, explain their dispute resolution support procedures to complainants when a complaint is first brought in. Explanations are given only at a later stage depending on the course taken by the case. The reason given for this is the emphasis placed by these organizations on resolution and conciliation reached through negotiations between the two parties.

By screening for cases that are difficult to resolve through mutual negotiation, this method does have the advantage of increasing the efficiency of complaint and dispute resolution.

On the other hand, it is important to provide users with the option to immediately proceed to dispute resolution support procedures.

Another problem with this method is that users can come to doubt the efficacy of complaint resolution support procedures in general or may feel alienated from the entire process. This frustration can lead complainants to forego the use of the ADR organizations of industry associations. Taking these disadvantages into consideration, it would seem to be more beneficial to present complainants with the full range of choices available to them at an early stage of the procedures.⁶⁴

The GIAJ website summarizes the procedures of its own complaint and dispute resolution support organization and the procedures of other organizations (Japan Center for Settlement of Traffic Accident Disputes, Nichibenren Traffic Accident Consultation Center) and provides a table comparing the available functions (“consultation,”

“mediation,” “arbitration,” etc.). This approach should be commended for facilitating the choice of procedures by users.

63 According to the September 2007 final report of the Research Group on Consumer Affairs Centers, the National Consumer Affairs Center of Japan and the Consumer Affairs Centers located throughout the country processed approximately 1.1 million complaints and consultations during fiscal 2006.

64 This relates to the question of whether or not to maintain the “conciliation first principle”

in offering the use of dispute resolution support procedures. Regarding this issue, see Section 2-3 (2) above.

Appendix 1 B. Initiatives Taken by Member Enterprises

When purchasing financial products and services, users interact with enterprises selling these products and services, and are almost never in direct contact with the related industry association. Consequently, efforts made by enterprises to raise public recognition of ADR organizations has an important impact on raising public recognition of the industry association’s ADR organization. However, according to the FY2007 Report of the Financial Service Dispute Resolution Liaison Group, very few enterprises belonging to financial services industry associations provide information on complaint and dispute resolution support procedures at the time of sale.⁶⁵ According to the FY2006 Report of the Financial Service Dispute Resolution Liaison Group, many industry associations are not aware of the public information activities of their member enterprises. This indicates that positive actions are not necessarily being taken on the part of member enterprises to raise public recognition of ADR organizations or by industry associations to encourage such actions. The probable reason for this is that individual enterprises see the provision of the above type of information, which may suggest the existence of complaints and disputes, to be incongruous with their sales activities.

The most common forms of public information activities of member enterprises consist of dissemination of information through websites (including links to industry association websites) and the display and placement of posters and leaflets at sales offices. Additionally, there are cases in which newspaper ads are used (CFAJ).

From the perspective of maintaining long-term and uninterrupted programs, the task of raising public recognition of the ADR organization of an industry association should be undertaken by the industry association and not by individual enterprises. As for what individual enterprises should do, an effective measure would be to include information on industry association ADR organizations in “various types of media that users with complaints and disputes can manage themselves, or media that can be readily accessed by users.” From this perspective, it is desirable for individual enterprises to present information in company websites (in links appearing on the top page or in other easy-to-find areas of the website), contract forms, product description literature and other documents presented to customers. It is worth considering using the same wording for each individual industry association or for all industry associations.

C. Source of Information for Complainants

For complainants, the most common sources of information concerning complaint and dispute resolution support organizations are websites, consumer organizations, government agencies, telephone books, introductions from other organizations, and inquiries with industry associations.

(2) Publication of Results

With the exception of JFSA, all of the specified major industry associations

65 LIAJ, GIAJ and CFAJ explain their complaint and dispute resolution support procedures at the time of sale. CFAJ is mandated to provide such information in its statutory

preliminary documents.

Appendix 1 publish the results of their complaint and dispute resolution support programs in their websites and public relations magazines. The frequency of publication ranges from once per year to five times per year (GIAJ). In addition, some industry associations provide summarizations of both resolved and unresolved cases.

However, a review of the websites of industry associations indicates that the publication of results most frequently takes the form of corporate reports. These reports are not necessarily compiled for the reference of users, and therefore are not written in a manner that users can easily read.

From the perspective of providing information to users, it would be beneficial to improve the quality of information that is convenient for users (e.g., FAQ).

LIAJ is engaged in the following interesting undertaking. The LIAJ website contains information concerning the processing of complaints by member enterprises (number of complaints received, quarterly trends, breakdown by type of complaint, details of complaints, and efforts being made toward improvement). Regarding efforts being made toward improvement, the LIAJ website contains links to the websites of individual enterprises where this information can be checked. From the perspective of users, this type of arrangement can be said to serve many uses.

(3) Evaluation by External Evaluators

Among the specified major industry associations, LIAJ and JBA undergo evaluation by third-party evaluators.⁶⁶ JSDA has not formed a third-party evaluation organization, but solicits the views and advice of third-party lawyers appointed as special advisers. In the case of CFAJ, because third-party experts make up a majority of its directors, the board of directors performs the function of external evaluation.

There are various views on the role of third-party evaluation and efforts to improve existing systems based on such evaluations. However, regular evaluation by independent evaluators, solicitation of the views of third parties and comparison with other industry-based ADR organizations in the evaluation and hearings process (made possible through uniform evaluations conducted across industries) should prove both important and beneficial in enhancing confidence in ADR organizations and thereby raising the public profile of these organizations.