About 450 small-business operators across Japan filed a raft of lawsuits Tuesday against the failed Tokyo-based retailer Idic Co. and eight consumer credit companies, claiming they were cheated into buying an expensive electricity-saving device that made no dent in their power bills.
The device — known under the brand name Sho-den-o, or King of Electricity Saving — was sold at prices ranging from several thousand yen to just under 2 million yen apiece.
The plaintiffs, most of them owners of restaurants and general merchandise stores, are seeking a combined 160 million yen in damages for money they paid to consumer credit companies plus a debt waiver on 280 million yen in pending installment payments.
The lawsuits — filed with 11 district courts across the nation — claim Idic sold the electricity-saving equipment fraudulently and the payments made to the consumer credit firms are void on grounds that they failed to discern the fraudulent nature of the transactions.
According to the plaintiffs’ lawyers, Idic promoted the electricity-saving device through door-to-door sales starting in the mid-1990s, claiming the device would cut users’ electricity bills by 20 percent to 40 percent.
Tomonori Abukawa, owner of a record store in Omagari, Akita Prefecture, said he bought a Sho-den-o for 960,000 yen from Idic in August 2001 after an Idic sales representative told him the device would reduce electricity consumption at his store by 34 percent and cut his electricity bill by about 25,000 yen per month.
Abukawa bought the device under a 17,000 yen per month installment plan.
Abukawa, who represents a Sapporo-based group of Sho-den-o “victims,” said he found the device did not work as billed and called Idic to complain after he saw no change in his electricity bill.
Last year, Abukawa filed an individual lawsuit against Idic and won the case in March. He said Idic, which effectively went bankrupt in January, has not paid any damages and he is being sued by a consumer credit company since he stopped paying the monthly installments.
Abukawa also criticized the consumer credit company, saying it neglected its duties by failing to investigate Idic’s sales tactics.
The lawyers representing the plaintiffs in Tuesday’s lawsuits said Idic’s business practices constitute fraud, and said the consumer credit companies share the responsibility as they could have detected the illegal nature of Idic’s business practices.
The plaintiffs said they may consider pursuing criminal charges.
The plaintiffs’ lawyers argue that tests conducted by the Hokkaido Consumers Association in 1999 with a transformer using a similar principle as the Sho-den-o showed the device was ineffective.
The concept behind the Sho-den-o was that it reduces voltage, which at regular homes and stores is about 100 volts, to 95 volts.
According to test results, while electricity consumed by light bulbs and fluorescent lights was cut by 12 percent to 18 percent, luminous intensity also fell by 15 percent to 25 percent.
As for inverter-run fluorescent lights and personal computer displays, the change in voltage was adjusted internally, effectively bringing little change in energy consumption. In the case of electric stoves, calorific power fell due to the reduced voltage, resulting in longer cooking times.
The association concluded that there was no way the device could slash electricity bills by at least 20 percent.
An agent for Idic said the company bought the energy-saving device from a manufacturer and believes the product was effective.
The agent said Idic did not exaggerate the performance of the device and plans to contest the lawsuits.
So far, more than 3,000 people across the country have sought advice from Abukawa’s victims’ group about the Sho-den-o. In addition to the 11 prefectures in which the suits were filed Tuesday, lawyer groups for purchasers have been formed in 13 other prefectures, and some of these also plan to seek damages.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.