FOR THE RECORD
DDI & NTT Gouging Consumers

    There was a recent Article in the Asahi Evening News about Internet porn services that were sleazy in more ways than one. Apparently it has been a common practice of many of these Web sites to entice people to join with superlow entry fees and then bilking them by continuing to charge their credit cards even after the customer had repeatedly requested to have the service cancelled. The Asahi story did a very good job of warning readers about this dishonest business practice that unsuspecting Web surfers are coming across.

    But what about the large well-established sleazy companies like DDI and NTT? After all, these mobile phone providers use tactics identical to the unscrupulous online porn providers. In a nutshell DDI, et. al. hand out mobile phones like candy almost for free on street corners. DDI also employs armies of MLM sales people cold calling and annoying anyone and everyone whose phone number they can obtain from just about anywhere. Once the mobile phone company gets your signature on the application form, which comes complete with much carefully worded "fine print," they proceed to bill and bill and bill while doing everything they can to prevent or ignore customers requests to cancel the service.

    About a year and a half ago Tony opened up a DDI handy phone account at a neighborhood electronics store. It was easy. The phone sold for Y500, and all he needed was a picture ID card showing that he was a long-term resident (i.e., not a tourist). A driver's license sufficed. About six months later he opened up another account in his name for a friend who was visiting Japan for the summer.

    The bills began to come in a little higher than the Y3,700 standard usage fee, usually in the neighborhood of Y8,000 to Y12,000 even though Tony did not use the phone that much. Apparently there were unexpected charges for each message left on the service in addition to charges for calls to retrieve the messages. All of this was no doubt in the fine print but unexpected by Tony.

    In any case, Tony decided to cancel one phone after his friend returned to the U.S. This is when the trouble began. During the initial call to DDI, Tony was repeatedly told that he could not cancel his phone over the telephone. He was told that he had to go to the DDI office and fill out the proper paperwork.

    A few weeks went by and Tony called again, this time being much more persistent and demanding to talk to the manager saying that he could give the secret ID number along with answering every question about his personal information that was on the application forms. He was told the same thing. DDI stubbornly refused to cancel the phone.

    More weeks went by and the bill for a monthly charge on the phone that was not being used came. Tony decided he had better get the thing canceled and called DDI again. After some arguing it became clear that he would have to visit their office. So, he asked for the location of the nearest DDI office in Nihonbashi where he worked. But he was told that there was only one office where the cancellation paperwork could be done and that was in Sendagaya. Or was it Sangenjaya? Tony did not know his way around Tokyo that well, which made the cancellation all the more difficult. Tony was not allowed to make the cancellation from the location where he had originated the account.

    Suddenly the scam DDI was running became abundantly clear to Tony. They were trying to prevent people from canceling their phones or at the least drag out the minimum payments on unused phones a few months by making cancellations inconvenient and inaccessible. When multiplied by millions of users, those small Y3,700 monthly fees add up. An extra month or two means big bucks and DDI knew it.

    Tony called again and asked what their hours were on Saturdays. The response was that the office was only open from 9:00 a.m. to 6:00 p.m. Monday through Friday and closed on holidays. (They are, however, quite willing to do the paperwork to initiate service on holidays and evenings from just about any street corner in Japan.) Tony then told DDI that he was working during those hours and that a visit to their office would be completely impossible. Therefore, he demanded that they cancel the phone through other means by sending him the paperwork. DDI refused. Tony told them that he would not pay the bill, and the DDI representative responded by saying that his phone would be cut. To this, Tony responded, "Thank you that is what I've wanted all along! So I'm not going to pay the bill!"

    Another bill came, and Tony tried one more ploy. This time he called DDI and reported his mobile phone as having been "stolen." He demanded that the line be cut immediately. DDI responded that he would have to visit that Sen-something-or-other office before anything could be done. The line remained open and working even though DDI had been told that a thief was now in possession of the phone. This says a lot about DDI's policy and the true intentions behind it, i.e., bilk the consumer for all they can no matter what happens.

    After three months DDI did cut line for "nonpayment of account" And Tony had an Y11,000+ bill (three months of minimum user fees plus charges for messages that people had been able to leave on the phone due to the line working) that was owed in addition to a previous month he had paid before the bickering with DDI began. Just to avoid the nuisance, Tony paid the money. At the same time, he had grown tired of Y10,000+ monthly bills on his other DDI phone and decided to cancel that one as well.

    Needless to say, the entire incident repeated itself all over again, with as many as ten calls to DDI, most of them shouting and yelling. This time around, Tony also included two letters with his request for cancellation in writing, but these were also ignored by DDI.

    Four months later Tony was saddled with the same three months of basic user fee back bills for phone service he did not want and had not used. He had sworn to several DDI managers that he would never pay these bills regardless of whatever they might do. It had become a matter of principle, and Tony would see it through.

    This time, bills with delinquent warnings from DDI began to come in and subsequently warnings from a collection agency. The bill collectors said that if the money were not paid, Tony's name would be sent to credit reporting services as delinquent and this would affect his ability to get credit in the future. In other words, DDI was attempting to extort money out of Tony by threatening to publicly damage his name if Tony did not pay the money, which he was strongly disputing. From DDI's side, there was no negotiation. Tony either had to pay or they would injure his reputation in public.

    DDI would be quick to point out that there was "fine print" in the agreement which gave them the right to treat Tony this way, but Tony had no idea what the document said because he could not read Japanese. Moreover, the fine print could have said that Tony had to sell a kidney or give up all of his home furnishings if he did not pay. Just because an agreement says something does not make it legal and or ethical.

    In this case, the fine print may have technically been legal (as the government currently interprets consumer laws) as the consumer protection agency (tel. 03-3235-1155) did not really have much to say about it and little interest in rapping DDI over this apparently unethical business practice. They were more interested in offering to "negotiate" the amount owed with DDI rather than taking a stand on the issue of DDI's refusal to cancel the phones when asked to. The agency lived up to its reputation as the guard dog that has been trained not to bite.

    In the end Tony did not pay the money owed on the second phone and DDI said that his name had been sent to the credit reporting agency as a delinquent. Tony, who had never been able to get any kind of loan in Japan before, has not had a chance to check his credit report but fears that it has been damaged. DDI repeatedly said they would do it.

    Chris had a nearly identical experience with NTT DoCoMo. In this case the trouble started when the answering machine which he had requested and was being billed for had not worked for the first two months. He called NTT to find out why this was on the bill but not working. At this time he was told that he had to activate it himself by entering in a series of numbers after dialing a computer. Chris told the NTT representative that he did not understand how and asked them to do it for him, all the while being a little upset at it not working since the start. The operator refused. At this point Chris told her to either set the answering machine or cancel the phone. The operator said she could do neither.

    A sequence of events similar to Tony's occurred. With NTT, however, there were three notable differences. To NTT's credit, they were allowing cancellation paperwork to be filled out at any branch office, and NTT canceled the phone automatically after the second unpaid bill occurred (rather than DDI's three bills). But NTT added a unique little money-grubbing detail in their fine print. All the while they stubbornly refused Chris' telephone and written requests for cancellation and also ignoring a report of the phone being lost, NTT's user agreement included a clause which granted them the right to charge an additional one-month user fee if the phone was cancelled for nonpayment.

    As Tony had done with the first phone, Chris paid the user fees for the two months it took NTT to cancel the phone automatically, but he drew the line at paying for a month when the phone was not even working. NTT did not use bill collectors on Chris. They simply sent repeated court-like letters in pink color saying that they would sue him and that he would have a court appointment on such and such date if he did not pay the bill. The letters also included similar threats, which DDI had used, saying that NTT would publicly damage Chris' name by sending his name to credit reporting agencies as delinquent and thereby publicly damaging his name and reputation.

    Chris took the stance that he would welcome an opportunity to defend himself in small claims court on the issue of a Y4,500 user fee for a month of phone service NTT never provided. Even if he did lose due to some technicality in the fine print, Chris was ready to at least have his day in court. To date, no real court papers have shown up (must be sent by registered mail and signed for), and NTT's mail seems to have been more threat than substance, particularly given the nature of the low amount of money in question. As with Tony, Chris is unsure of whether NTT went through with its threats to damage his name and reputation with the credit reporting agencies.

    In another case, a local real estate agent spoke about Paula who had gone back to her home country with J-Phone bills continuing to come in. Just before leaving Paula was attempting to tie up all of the loose ends, getting things like her insurance, gas, electricity and phone services cut. All of this was done by telephone but J-Phone refused to cut her line until she visited their office. Paula told them that she was leaving in a few days and under a lot of time pressure and would not be able to make the office visit. J-Phone ignored her pleas and the phone was not cut.

    Paula left Japan and her landlord collected her mail, which soon turned to letters from bill collectors who later publicly trashed Paula's name and reputation while she was out of the country and unable to defend herself. J-Phone and or its bill collectors had reported her as delinquent to credit agencies because of the unpaid user fees for an account that Paula had pleaded with them to cancel. Paula will likely never return to Japan but if she did, she would have trouble with any type of business matter that did a credit report on her.

    Mobile phones appear to be one of the great new technological wonders to our modern lifestyle, but unfortunately due unscrupulous business practices of some of Japan's leading and so-called reputable companies like DDI and NTT, and the government's lax supervision, these phones come with a steep price tag. When multiplied by millions and even tens of millions of users, this is a price that would make even the sleaziest of sleazy online porn providers green with envy.

    Aside from the issue of brain cancer, which some early studies are saying the mobile phones themselves may cause, the toll on consumers is much greater than expected. The total price is made up of the numerous hidden and unexpected costs which appear on bills, the months of user fees for unused service before canceling accounts, and personal attacks on individual reputations as the mobile phone companies gouge consumers and force them to pay up for services they did not want nor use.

    As most companies in the mobile phone industry seem to use the same unethical business practices with no competing alternatives, consumers can protect themselves by just not using the mobile phones. Indeed foreigners who cannot read the small print would be well advised to avoid these services all together until companies are willing to offer user contracts in English.

    For people who find themselves in need of mobile phone service and cannot do without it, here are some tips for avoiding trouble. First, do not use an automatic bank book transfer, which the phone companies strongly push for at the point of sale. This allows them to easily drain your money even after you have told them to cut the service. In fact their user agreement is set up to do just that to any consumer who does not make a visit to the designated office to cancel a phone. If you leave Japan with a healthy bank balance, the phone companies will drain your account for years no matter how many letters you sent them until you appear at their office in Japan in person. Of course a letter to the bank could get that automatic bank transfer turned off.

    When you decide to cancel your phone, send in the request in writing by registered mail. Every time you contact the mobile phone company get the full name of the person you talk to and keep a written record of each time that you requested cancellation. Reply to any unfair bills by registered mail as well as making a complaint with the consumer protection agency.

    When enough people voice their anger the so-called watchdog may begin to do something about the problem. Of course for some people it may be easier to just make the visit to the office and fill out the paperwork in person, but not everyone may be able to do that. In the case of DDI they intentionally make it difficult.

    If DDI, NTT and others were more interested in "serving" customers rather than shaking them down and forcing payments for unwanted and unused services, they would very likely end up with more sales in the long run. It makes you wonder what school of management the old arrogant bigwigs at these dinosaur companies came out of.

by James C. Gibbs

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