Regulatory Compliance

Alleged violations of the Premiums and Representations Act, voluntary correction, and regulatory responses

Concerns or allegations under the Act against Unjustifiable Premiums and Misleading Representations (the "Premiums and Representations Act") may arise through internal checks or customer inquiries. They may also arrive as requests for reports or materials from the Consumer Affairs Agency (CAA) or prefectural authorities, or as requests from qualified consumer organizations. In any of these situations, the starting point is to identify the representations in question and the actual circumstances of the transactions, whether the representations are still being made, and who is requesting what.

A company addresses deadlines for responses and submissions while considering whether to discontinue or revise the representations and how to respond to customers. Commitment procedures, reductions in surcharges through voluntary reporting or refund measures, and responses to qualified consumer organizations are separate mechanisms with different requirements and effects.

We assist with organizing the representations and materials in question, considering an approach to correction, preparing responses to authorities and consumer organizations, and considering the response after an order is issued, including an action for revocation.

Reviewed by Keishi Yoshikawa, Attorney at Law and Patent Attorney (Dai-Ichi Tokyo Bar Association)

Last updated: September 27, 2026

What to check first

The following are examples of matters the company checks when concerns or allegations arise.

Who raised the concern and what is requested — The company checks who raised the concern, such as the CAA, a prefectural authority, a qualified consumer organization, a business partner, or a customer; the documents received and their receipt dates; and the requested responses or submissions and their deadlines.
Representations in question — The company identifies the wording, images, videos, and notes being questioned, together with the goods or services concerned.
Period and scope of publication — The company identifies when the representations began, changed, and ended, and where they remain available.
Preservation of records — Before revising or deleting the representations, the company preserves the original representations, their publication history, the materials relied on, and records of preparation and approval.
Differences between the representations and the actual circumstances — The company identifies where the representations differ from the actual goods or transactions, distinguishing what is known from what remains unconfirmed.
Sales records — The company checks whether it can identify the sales period, sales revenue, and range of purchasers for the goods concerned.
Action already taken — The company checks what it has already done or promised regarding discontinuation or revision of the representations, public announcements, explanations to customers, and refunds.
Previous orders and communications with the authorities — The company checks whether it has previously received orders to take measures or orders to pay a surcharge, and the status of reports and materials submitted in the current matter.

The company does not need to wait until all checks are complete before deciding whether to discontinue or revise the representations. It considers those steps while securing records.

How we can helpOrganizing representations and materials / Considering discontinuation or revision of representations / Public announcements and responses to customers / Responding to requests for reports and materials / Reviewing commitment procedures and surcharges / Explanations and actions for revocation / Responses to qualified consumer organizations

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Contents

1 From discovering concerns to voluntary correction
2 Investigations by the CAA and prefectural authorities, and criminal liability
3 Commitment procedures, surcharges, and responses after an order
4 Requests, disclosure requests, and demands for injunctive relief from qualified consumer organizations
Key legislation and official sources
Frequently asked questions

1 From discovering concerns to voluntary correction

Identifying the representations and the concerns raised

The company identifies the representations by medium, publication period, and goods concerned. Where views differ on what the representations in question convey to general consumers, assessing that point affects the approach to the response. The assessment of what representations mean is explained in "Assessing advertising content: prominent claims and disclaimers."

Preserving representations, supporting materials, and transaction records

The representations before and after revision, the materials relied on when the representations were made, sales records, and the history of preparation and approval are needed both to determine the scope of correction and to explain the matter to authorities or consumer organizations. The management measures guidelines also identify retention of materials as a measure for enabling subsequent verification of the information supporting representations and related matters.

Discontinuing or revising representations and reviewing sales methods

The company separately considers matters that can be addressed by revising the representations and matters that require changes to sales conditions or what is provided. It also checks whether the same representations remain on websites, social media, in stores, in brochures, or elsewhere. The management measures guidelines identify promptly and accurately establishing the facts, eliminating general consumers' misperceptions, and taking measures to prevent recurrence as responses when misleading representations or other prohibited practices come to light.

Considering public announcements, explanations to customers, and refunds

Public announcements to eliminate misperceptions, individual explanations to customers, and refunds may be considered as voluntary responses by the company. The CAA Q&A on the management measures guidelines states that the method of informing consumers is assessed individually according to the characteristics of the goods or services and other relevant circumstances. It gives examples of notices in a national newspaper where the representations were made nationwide and purchasers are also located nationwide, and in a local newspaper where the representations were made only in a particular area (CAA Q&A, Q37). The Q&A also states that, even where sales of the goods have ended, action to eliminate misperceptions is required if it is found that misleading representations were made (CAA Q&A, Q34). The annex to the guidelines identifies prompt notification of general consumers, for example through newspapers, the company's website, or in-store notices, and product recalls, where necessary to eliminate general consumers' misperceptions, as examples of responses when misleading representations or other prohibited practices come to light. The company determines the methods and scope of public announcements or individual notices after identifying how widely the representations reached consumers, whether purchasers can be identified, and whether the effects continue. Refunding customers does not, by itself, qualify the company for a reduction under the surcharge regime. Refund measures under the Premiums and Representations Act are subject to procedures, including approval of a plan.

2 Investigations by the CAA and prefectural authorities, and criminal liability

Checking the request for reports and its legal basis

The Premiums and Representations Act provides that the CAA may, where it considers this necessary to enforce the Act, require business operators to report, order the submission of books, documents, and other items, and have officials conduct on-site inspections and ask questions. The Act provides criminal penalties for conduct such as failing to make these reports or submit the requested items, making false reports, or refusing inspections. Because the legal effects differ between a voluntary inquiry and a statutory request for reports under the Act, the company checks the legal provisions cited in the document and the deadline.

Under the Order for Enforcement of the Act against Unjustifiable Premiums and Misleading Representations (the "Enforcement Order"), prefectural governors may also issue orders to take measures and, for that purpose, request reports and supporting materials. The functions performed by prefectural governors do not include issuing orders to pay a surcharge.

When supporting materials are requested

The Premiums and Representations Act provides that the competent authority may, where it considers this necessary to determine whether representations constitute misleading representations as to quality, set a period and request the submission of materials showing reasonable grounds for the representations. The Regulations for Enforcement of the Act against Unjustifiable Premiums and Misleading Representations (the "Enforcement Regulations") set that period as ending on the day on which 15 days have elapsed from the date the written request for submission is delivered, unless there are recognized justifiable grounds for not submitting the materials within that period. Under the Premiums and Representations Act, if materials showing reasonable grounds for the representations are not submitted within the period, the representations are deemed to be misleading representations as to quality for the purposes of an order to take measures, and are presumed to be misleading representations as to quality for the purposes of an order to pay a surcharge. Merely submitting some materials as a formality is insufficient. The guidelines on unsubstantiated advertising state that the need for new or additional testing or research is not recognized as justifiable grounds for extending the deadline. The assessment of materials is explained in "Supporting materials for claims about effects and performance, and rules on unsubstantiated advertising."

An opportunity to provide an explanation and present the facts

As a general rule, when an authority intends to issue an order to take measures, the procedure for granting an opportunity to provide an explanation under the Administrative Procedure Act is followed, and matters including the proposed disposition and the facts giving rise to it are notified in writing. For orders to pay a surcharge, the Premiums and Representations Act provides for an opportunity to provide an explanation, and matters including the proposed surcharge amount and the basis for its calculation are notified in writing. In preparing an explanation, one option is for the company to organize its arguments by distinguishing facts from legal assessments concerning the representations, the actual circumstances of the transactions, the materials submitted, and the checks conducted when the representations were made.

Criminal penalties without a prior order and penalties on both individuals and corporations

The Premiums and Representations Act provides for a fine of up to 1,000,000 yen for making misleading representations as to quality or as to transaction terms, without requiring a prior order to take measures. Because there is no provision punishing negligence for this offense, it is punishable where there is intent (Penal Code). Where a corporation's representative, employee, or other person covered by the Act commits a violation in connection with the corporation's business, the corporation is also subject to a fine in addition to the individual offender. Separately, violating an order to take measures is punishable by imprisonment for up to 2 years or a fine of up to 3,000,000 yen, or both depending on the circumstances. Where the violation concerns a corporation's business, the corporation is also subject to a fine of up to 300,000,000 yen.

3 Commitment procedures, surcharges, and responses after an order

Commitment procedures

Where a violation is suspected, the CAA may give the business operator engaging in the conduct written notice that the conduct is subject to commitment procedures. The Premiums and Representations Act also provides for such notice where the conduct has already ceased. The Act provides that the CAA may not give this notice after it has given notice of an opportunity to provide an explanation concerning an order to take measures or an order to pay a surcharge. A business operator receiving the notice may prepare a corrective measures plan, or a plan to correct the effects of conduct that has already ceased, and apply for approval within 60 days of the date of receipt. Once the plan is approved, the provisions on orders to take measures and orders to pay a surcharge do not apply to the conduct that gave rise to the notice unless the approval is revoked.

The CAA decides whether to use commitment procedures. The implementing guidelines on commitment procedures state that cases are excluded where the business operator was subject to legal measures within the 10 years preceding the date the investigation began or another relevant date, or where the suspected violation is considered egregious and serious. The guidelines also state that a business operator under investigation may consult the CAA about commitment procedures at any time. The Premiums and Representations Act requires, for approval of a plan, that the measures be sufficient to correct the conduct that gave rise to the suspicion and its effects, and that they be expected to be implemented reliably. The guidelines list typical measures including discontinuing the suspected violation, informing general consumers, preventing recurrence, reporting on implementation, and providing redress to general consumers. The guidelines state that, when the CAA approves a plan, it publishes matters including the business operator's name and an outline of the plan, with a note that the approval does not constitute a finding of a violation.

We assist with organizing the measures to be included in the plan and the materials supporting their implementation, and consider how they correspond to the approval requirements.

Conduct subject to surcharges and calculation of the amount

The Premiums and Representations Act provides that the surcharge for a business operator that has made misleading representations as to quality or as to transaction terms, excluding representations separately designated under the Act, is 3% of the sales revenue, calculated in accordance with the method prescribed by Cabinet Order, from transactions in the relevant goods or services during the surcharge calculation period. The surcharge calculation period comprises the period of the violation and the period of transactions within 6 months after the violation ceased, ending earlier if measures to eliminate misperceptions were taken before then, subject to a maximum of 3 years. The CAA may not order payment where it finds that, throughout the period of the conduct subject to the surcharge, the business operator did not know that the representations were misleading and its lack of knowledge was not attributable to a failure to exercise reasonable care, or where the amount is less than 1,500,000 yen. The rate is 4.5% where a business operator received an order to pay a surcharge that became final within the 10 years preceding the reference date and also engaged in conduct subject to a surcharge on or after the date of that order. The Act provides that, where a business operator fails to report after receiving a statutory request for a report on the facts underlying the surcharge calculation, the CAA may estimate those facts using a reasonable method and order payment. As a general rule, the CAA may not order payment of a surcharge once 5 years have elapsed from the date the violation ceased. Special rules apply where approval of a commitment plan has been revoked.

Reductions through voluntary reporting and refund measures

Where a business operator reports facts constituting conduct subject to a surcharge, the surcharge amount is reduced by 50%. However, the Premiums and Representations Act excludes reports made in anticipation of an order to pay a surcharge because of an investigation. The CAA explained that, in a case involving orders to pay a surcharge concerning fuel economy representations for ordinary motor vehicles, it did not apply the reduction despite receiving a report because it assessed the report as having been made in anticipation of an order to pay a surcharge. This explanation was given at the 250th meeting of the Consumer Commission on June 27, 2017; the reduction was applied in the same business operator's case involving light motor vehicles (kei cars). If the authorities contact the company, the company records the content of the communication, the date and time of receipt, and the circumstances leading to the report, and considers whether the statutory exclusion applies. For refund measures, a business operator that has received notice of an opportunity to provide an explanation concerning an order to pay a surcharge may prepare a plan to pay identified purchasers amounts of money equal to at least 3% of their purchase amounts and apply for approval by the deadline for submitting the written explanation. The plan may include refunds made before the application. A business operator that has obtained approval reports the results within 1 week after the implementation period specified in the approved plan ends. If the CAA finds that the measures were implemented in accordance with the plan, the amount calculated under the applicable Cabinet Office Order as the amount of money paid is deducted from the surcharge, and if the remaining amount is less than 10,000 yen, payment is not ordered. This 10,000 yen threshold applies at a different stage from the threshold under which payment is not ordered where the surcharge is less than 1,500,000 yen.

Responding after an order and considering an action for revocation

Where the company disagrees with an order to take measures or an order to pay a surcharge, it considers a request for administrative review or an action for revocation. The Administrative Case Litigation Act permits an action for revocation to be filed directly without first requesting administrative review. Under that Act, an action for revocation may not be filed after 6 months have elapsed from the date the company learned of the disposition, or after 1 year has elapsed from the date of the disposition. Under the Administrative Complaint Review Act, a request for administrative review may not be made after 3 months have elapsed, calculated from the day after the company learned of the disposition, or after 1 year has elapsed, calculated from the day after the disposition. Both Acts provide exceptions where there are justifiable grounds, and where administrative review has been requested, the periods for an action for revocation are calculated by reference to the determination on that request. Neither filing an action for revocation nor requesting administrative review, by itself, suspends the effect or enforcement of the disposition; a separate application is needed to seek a stay of execution. In one case, an order to take measures concerning representations for a rice cooker advertised as reducing carbohydrate content was revoked when the appellate judgment of June 10, 2026 became final. The meaning of the representations as determined by the authority was itself at issue.

4 Requests, disclosure requests, and demands for injunctive relief from qualified consumer organizations

Checking the legal basis of the request and the response sought

Communications from qualified consumer organizations may include voluntary requests, requests for disclosure of materials under the Premiums and Representations Act, or demands for injunctive relief under the Act. These have different legal bases and effects. The company checks the organization's name, the representations being questioned, the response sought, and the response deadline.

Requests for disclosure of materials showing reasonable grounds

Under the Premiums and Representations Act, a qualified consumer organization may, where there are reasonable grounds sufficient to suspect that representations currently being made by a business operator constitute misleading representations as to quality, state its reasons and request disclosure of materials showing reasonable grounds for those representations. The Act provides that the business operator must endeavor to comply with the request unless the materials contain trade secrets or there are other justifiable grounds. This is a separate mechanism from an authority's request for submission of materials, and no 15-day period and no effect of deeming or presuming the representations to be misleading are prescribed for it.

Considering which materials to disclose and how to handle confidential information

The company identifies the information that constitutes trade secrets and its scope, and then considers which materials to provide and how. It may also consider preparing explanatory materials, providing partial disclosure, or discussing conditions for maintaining confidentiality.

Demands for injunctive relief and responses in discussions or litigation

Under the Premiums and Representations Act, where a business operator is making, or is likely to make, misleading representations as to quality or as to transaction terms to an unspecified and large number of general consumers, a qualified consumer organization may demand that the conduct be discontinued or prevented, that consumers be informed that such representations were made, or that other relevant measures be taken. The statutory categories expressly subject to demands for injunctive relief are misleading representations as to quality and misleading representations as to transaction terms. Separately designated representations under the Act, such as so-called stealth marketing, are not listed. A demand for injunctive relief seeks discontinuation, prevention, or other such measures concerning the representations. It is distinct from a procedure seeking payment of money to consumers.

Key legislation and official sources

English translations of legislation are provided for reference. The Japanese texts are authoritative.

Article topic	Legislation or official source	Source type and English version reviewed
Requests for reports and materials, orders to take measures, criminal penalties, commitment procedures, surcharges, and qualified consumer organizations	Act against Unjustifiable Premiums and Misleading Representations— Japanese text on e-Gov	Legislation. English translation (earlier version). The translation identifies its last version as Act No. 29 of 2023.
Powers of prefectural governors and calculation of sales revenue	Order for Enforcement of the Act against Unjustifiable Premiums and Misleading Representations— Japanese text on e-Gov	Cabinet Order. English translation (earlier version). The translation identifies its last version as Cabinet Order No. 192 of 2024.
Submission period for supporting materials, refund procedures, and calculation of refund deductions	Regulations for Enforcement of the Act against Unjustifiable Premiums and Misleading Representations— Japanese text on e-Gov	Cabinet Office Order. English translation (earlier version). The translation identifies its last version as Cabinet Office Order No. 54 of 2024.
Preservation of records, correction, public announcements, and recalls	Management measures guidelines	Official guidance (Japanese). English title translated by the firm.
Responses after sales have ended and methods of informing consumers	CAA Q&A on the management measures guidelines, Q34 and Q37	Official guidance (Japanese). English title translated by the firm.
Supporting materials and the need for new or additional testing	Guidelines on unsubstantiated advertising	Official guidance (Japanese). English translation on Japanese Law Translation; the page does not state the version translated.
Eligibility for commitment procedures, consultation, plan measures, and publication	Implementing guidelines on commitment procedures	Official guidance (Japanese). English title translated by the firm.
Opportunity to provide an explanation before an order to take measures	Administrative Procedure Act— Japanese text on e-Gov	Legislation. English translation (earlier version). The translation identifies its last version as Act No. 63 of 2023.
Intent as a requirement for criminal punishment	Penal Code— Japanese text on e-Gov	Legislation. English translation (earlier version). The translation identifies its last version as Act No. 72 of 2017.
Denial of the voluntary reporting reduction in the fuel economy representations case	Minutes of the 250th meeting of the Consumer Commission, June 27, 2017	Official meeting minutes (Japanese) containing the CAA's explanation. English title translated by the firm.
Actions for revocation, filing periods, and stays of execution	Administrative Case Litigation Act— Japanese text on e-Gov	Legislation. English translation (earlier version). The translation identifies its last version as Act No. 109 of 2007.
Administrative review, filing periods, and stays of execution	Administrative Complaint Review Act— Japanese text on e-Gov	Legislation. English translation (earlier version). The translation identifies its last version as Act No. 63 of 2023.
Revocation of the order concerning rice cooker representations	Tokyo High Court judgment of June 10, 2026, in an action for revocation of an order to take measures issued by the CAA on October 26, 2023; Summary of the CAA Commissioner's press conference, June 25, 2026, stating that the CAA would not appeal	Official statement (Japanese). English title translated by the firm. The judgment itself was not reviewed in English.

Legal information reviewed: September 27, 2026

Frequently asked questions

Does the response end once the advertisement in question is revised?

Even after revision, administrative measures concerning the previous representations may become an issue. The Premiums and Representations Act provides that an order to take measures may be issued even where the violation has already ceased. One option is to distinguish completion of the revisions from the remaining responses, including responses to customers who have already entered into transactions.

Can testing started after a request for supporting materials be completed in time?

The Enforcement Regulations set the submission period as ending on the day on which 15 days have elapsed from delivery of the written request, unless there are recognized justifiable grounds. The guidelines on unsubstantiated advertising state that the need for new or additional testing or research is not recognized as justifiable grounds for extending the deadline.

Can a company avoid an order to take measures or a surcharge by asking to use commitment procedures?

The CAA decides whether to use commitment procedures, and the implementing guidelines on commitment procedures identify cases that are excluded. Approval of a plan requires that the measures be sufficient and that their implementation be certain. Under the Premiums and Representations Act, the approval is revoked if the measures are not implemented in accordance with the approved plan.

Does voluntary reporting or refunding customers eliminate a surcharge?

The reduction for voluntary reporting is 50% of the surcharge, and the Premiums and Representations Act excludes reports made in anticipation of an order to pay a surcharge because of an investigation. A reduction through refund measures also requires procedures including approval of a plan and reporting of the implementation results. Refunding customers does not, by itself, automatically result in a reduction.

Must a company comply with a request for disclosure of materials from a qualified consumer organization?

The Premiums and Representations Act provides that a business operator must endeavor to comply with the request unless the materials contain trade secrets or there are other justifiable grounds. Unlike an authority's request for submission of materials, this mechanism does not prescribe a submission period or an effect deeming the representations to be misleading. One option is to consider the response after checking the reasons for the request and the representations concerned.

A company disputes an order to take measures. Does filing an action for revocation mean that it does not have to comply?

The Administrative Case Litigation Act provides that filing an action for revocation does not suspend the effect or enforcement of the disposition. Because the Premiums and Representations Act also provides criminal penalties for violating an order to take measures, the response to the order and whether to apply for a stay of execution need to be considered separately.

Contact

Making an inquiry

Please let us know, as far as you are able, the contents and dates of any documents you have received, the representations being questioned, and any deadlines of which you are aware.