Court slams Nova’s shady business practices

Jul 14, 2004

Osaka-based Nova copped a lambasting from the court about its shady business practices. Lawyers for the 44-year-old Tokyo woman who sued the conversation school chain hailed the ruling. “This is the first time Nova’s methods for dealing with the return of money paid for lessons not taken has been clearly ruled as illegal,” one of the unnamed woman’s defense lawyers said. Presiding Judge Toshio Hara slammed the conversation school. “When the student agreed to purchase points for additional classes, Nova barely explained the consequences of canceling the contract before it had expired, which failed to abide by the law,” Hara ruled. “It is not permissible to claim repayments cannot be made simply because a certain time limit has passed.” Consumer advocates, who have received numerous complaints about Nova’s handling of financial matters with its customers, were also happy with the verdict. “Many people don’t realize the consequences of canceling a contract until they actually do it,” a spokesman for the Tokyo Metropolitan Comprehensive Consumer Center said. “We want companies to give a sufficient explanation of a contract’s terms at the time when it is signed.” Nova works on a system where students pay a certain amount and receive points, which are used up each time they take a lesson at the school. In 1999, the woman started attending classes at Nova, then in December 2001 spent about 710,000 yen to pay for another 600 points. Nova’s regulations say points can be used for three years. But what it didn’t tell the woman was that, under the company’s illegal regulations, any points she hadn’t used in a year were automatically reduced by one third. When the woman cancelled her contract with Nova in July last year, she received only 250,000 yen for the points she had remaining. The court ruled Nova should have paid her about 500,000 yen and ordered it to hand over that amount. (Mainichi and wire reports, July 14, 2004)