How to Deal with Unscrupulous Resellers? 5 Measures Explained by Experts

During the first wave of the novel coronavirus outbreak last year, there were individuals who took advantage of the shortage of masks and resold them at high prices. Among these, there were cases where a box of 50 masks, which was sold for around 500 yen at the time, was sold for nearly ten times the price.

From around this time, people who hoard scarce or short-supply products in advance and resell them at high prices to make a large profit began to be referred to as “resellers”.

The act of reselling something you have purchased is not illegal in itself, and many people are reselling items on Yahoo Auctions and Mercari as a matter of course. However, it can be said that the act of obstructing the regular price purchase by general consumers, obtaining products illegally, and reselling them is malicious.

Therefore, in this article, we will explain in detail the illegality of malicious resellers and how to deal with them.

Examples of Unscrupulous Resellers

Many unscrupulous resellers engage in highly illegal activities during the acquisition stage of the goods they resell. Specifically, the following examples are common:

• Exploiting subscription sales that offer discounted prices for the first purchase, buying the initial product at a low price for resale, and then not making payments for subsequent purchases.
• Hiring part-time workers or creating multiple accounts online to purchase and resell items that are limited to “one per person”.
• Purchasing items that are prohibited from resale under terms and conditions, hiding the intention to resell, and then reselling them.

As such, various methods have emerged in the practices of unscrupulous resellers. In this article, we would like to consider the illegality and countermeasures of the increasingly common practice of “reselling by abusing the first purchase discount in regular purchases”.

Abuse of First-Time Purchase Discounts for Reselling

Customers who sign up for a subscription are offered a discount (sometimes even free) on their first purchase. They take advantage of this offer to buy the first item at a reduced price and pay with a credit card.

However, a malicious tactic is to prevent the registered credit card from being charged for subsequent purchases, thus only purchasing the first item at a discounted price without continuing the subscription.

This is done repeatedly across multiple accounts to buy and resell a large number of items at a low cost. Even if the seller tries to charge for subsequent purchases according to the subscription contract, it is often impossible to contact the buyer because false names and phone numbers have been registered.

Furthermore, the delivery address for the products is manipulated to appear as different addresses, as shown below:

• ○○ block, ○○ number, ○○
• ○○ block, ○○ number – ○○
• ○○ block – ○○ – ○○
• ○○ block – ○○ – ○○

In such cases, the act of purchasing the product for resale by deceiving the seller and using the first-time purchase discount may constitute “fraud” and “obstruction of business by deception”, as it burdens employees with the task of making contact.

Japanese Penal Code Article 246 (Fraud)
1. A person who deceives another and causes them to deliver property shall be punished by imprisonment for up to ten years.
2. A person who, by the method of the preceding paragraph, obtains or causes another to obtain an unlawful gain in property shall be treated in the same manner as the preceding paragraph.

Japanese Penal Code Article 233 (Defamation of Credit and Obstruction of Business/Obstruction of Business by Deception)
A person who disseminates false rumors or uses deception to defame another’s credit or obstruct their business shall be punished by imprisonment for up to three years or a fine of up to 500,000 yen.

We will explain in detail how to deal with such malicious resellers in the following sections.

How to Deal with Malicious Resellers

Filing a Damage Report for Fraud, Business Obstruction, etc.

A damage report is a notification submitted to the jurisdictional police station or the nearest police box when you have suffered damage due to a crime. This can also be done verbally.

Japanese Criminal Investigation Standards Article 61 (Acceptance of Damage Reports)
1. When a police officer receives a report of damage due to a crime, they must accept it regardless of whether the incident related to the report falls within their jurisdiction.
2. If the report in the preceding paragraph is made verbally, the person making the report is asked to fill in a damage report (Form No. 6 in the appendix) or the police officer will write it on their behalf. In this case, if a witness statement record is created, the creation of a damage report can be omitted.

In cases like this, the seller, who has no acquaintance with the malicious reseller and cannot contact them, must find and arrest the malicious reseller if they want to demand payment of the remaining money or damages.

However, in the case of a damage report, whether to investigate or not is up to the police. Therefore, if the damage is minor, or if it is difficult to obtain evidence to substantiate the crime, there is a possibility that the damage report may not be accepted, or even if it is accepted, the response may be poor.

Filing a Criminal Complaint for Fraud, Obstruction of Business by Deception, etc.

Unlike a damage report, when a “criminal complaint” is accepted, the police are obligated to investigate. Investigation refers to activities necessary for building a criminal case, such as identifying the perpetrator, collecting evidence through house searches, etc. Depending on the extent of the damage and the severity of the malice, it may be one of your options.

Article 241 of the Japanese Criminal Procedure Law
Complaints or accusations must be made in writing or orally to a prosecutor or judicial police officer.
When a prosecutor or judicial police officer receives an oral complaint or accusation, they must create a written record.

Article 63 of the Japanese Crime Investigation Standards (Acceptance of Complaints, Accusations, and Surrenders)
A police officer who is a judicial police officer must accept a complaint, accusation, or surrender, regardless of whether the incident is within their jurisdiction, in accordance with this section.
A police officer who is a judicial inspector must immediately transfer the complaint, accusation, or surrender to a police officer who is a judicial police officer.

A criminal complaint can be made in writing or orally, just like a damage report, and it is possible to file it with a police station outside the jurisdiction.

However, in practice, we recommend submitting it to the police station that has jurisdiction over one of the following places in order to conduct an appropriate investigation.

• The actual location where the damage occurred
• The victim’s residence
• The perpetrator’s residence

Article 242 of the Japanese Penal Code
When a judicial police officer receives a complaint or accusation, they must promptly send the relevant documents and evidence to the prosecutor.

The police have a duty to accept the complaint, but there is a possibility that they may not accept it for various reasons, such as if the damage is minor or if there is little information about the perpetrator. However, if you ask a lawyer, who is a legal expert, to prepare the complaint, there is a higher chance that it will be accepted.

Difference between a Damage Report and a Complaint

A “Damage Report” is a notification to the police (investigative authorities) that you have been victimized by a crime, while a “Complaint” is a procedure to notify the police (investigative authorities) that you have been victimized by a crime and to seek punishment for the perpetrator.

Article 242 of the Japanese Criminal Procedure Law
Judicial police officers must promptly send documents and evidence related to the complaint or accusation to the prosecutor.

Article 260 of the Japanese Criminal Procedure Law
The prosecutor must promptly notify the complainant, accuser, or petitioner when a public prosecution is initiated or a decision not to prosecute is made for an incident that has been complained, accused, or requested. The same applies when the public prosecution is withdrawn or the case is sent to a prosecutor of another prosecution office.

Upon accepting a complaint, the police must promptly conduct an investigation and send documents and evidence related to the complaint to the prosecutor. Furthermore, the prosecutor is obligated to promptly notify the victim who filed the complaint about the decision to prosecute or not to prosecute.

If you want to formally investigate and punish malicious resellers, a criminal complaint is an effective means. However, for claims for damages, you must resort to means such as settlement negotiations or civil lawsuits.

Sending a Warning Letter in the Name of a Lawyer to the Relevant Address

There is a possibility that a warning letter sent by a seller who has been victimized by fraudulent or obstructive business practices of malicious resellers may not be taken seriously if it is sent under their own name.

Therefore, if a warning letter in the name of a lawyer is sent by certified mail, the contents of the warning letter received by the other party are certified by Japan Post Co., Ltd. The impact of conveying to the other party in the lawyer’s words that their actions are illegal and the legitimate demands in accordance with the law is different.

However, malicious resellers who knowingly engage in fraudulent activities may change the location where they receive goods, fearing that a police investigation may occur if a warning letter is sent.

Inquiring the Resident’s Name to the Management Company in the Case of a Rental Apartment

Generally, apartment management companies do not disclose tenant information to third parties. However, by utilizing a system called “Bar Association Inquiry” stipulated in the Japanese Attorney Act, there is a possibility to obtain information such as the real names of malicious resellers.

Japanese Attorney Act Article 23-2 (Request for Report)
An attorney can propose to the bar association to which he/she belongs to inquire to public offices or public and private organizations about the case he/she is in charge of and request a report on necessary matters. If there is a proposal, the bar association can reject it if it deems the proposal inappropriate.
The bar association can inquire to public offices or public and private organizations based on the proposal in the preceding paragraph and request a report on necessary matters.

In this case, the attorney does not directly request the apartment management company to disclose information. Instead, the attorney proposes to the bar association to which he/she belongs, undergoes a review, and when deemed necessary, the bar association requests the apartment management company to disclose information.

This system is also used when requesting the site administrator for the information of the poster against defamation on the Internet, and it is considered one of the effective methods in this case as well.

If you want to know more about the “Bar Association Inquiry”, please refer to the following article.

https://monolith.law/reputation/references-of-the-barassociations[ja]

Hiring a Private Investigator

One of the major advantages of hiring a private investigator is that, unlike filing a damage report or a criminal complaint, there is no uncertainty about whether your request will be accepted. As long as the fee is paid, the investigation can start immediately without any concerns about slow progress.

In particular, hiring a private investigator can be an option when you need to conduct a focused investigation on the ‘name’ and ‘address’ in the resident’s card, which is necessary for a damage compensation claim. However, it is also a risky choice as there is no guarantee that the investigation will yield results and it involves a financial burden.

Especially in recent times, there has been an increase in fraudulent operators posing as private investigators targeting victims of fraud. Therefore, it is necessary to exercise caution when using such services.

Summary

We have discussed the cases of malicious resellers and the abuse of “first-time purchase discounts for resale,” as well as the following “5 countermeasures” against them.

• File a damage report for fraud and obstruction of business
• File a criminal complaint for fraud and obstruction of business
• Send a warning letter in the name of a lawyer to the relevant address
• In the case of rental apartments, inquire the resident’s name from the management company
• Hire a detective for investigation

With the spread of the internet, anyone, anywhere, can easily obtain and resell products, leading to an increase in malicious resellers.

If a business that adopts regular sales implements the countermeasures introduced this time, it is recommended to consult with a law firm with specialized legal knowledge and extensive experience without making a judgment on your own, and receive advice on what kind of countermeasures are appropriate.

If you want to know more about the illegal resale of tickets, which has been a hot topic recently, please refer to the article below.